Breakthrough in consumer rights negotiations
An EU-wide right for consumers to change their minds about purchase decisions within two weeks and clearer pricing rules for internet sales were provisionally agreed by MEPs and Council representatives late on Monday night. These changes are to be incorporated in a new EU directive to improve consumer protection, especially in internet sales, and clarify rules for businesses.
"More safety for consumers shopping on line and common rules for businesses - these are the headlines of the political agreement between the Parliament and the Council on the Consumer Rights Directive", commented Parliament's rapporteur Andreas Schwab (EPP, DE), after concluding negotiations with the Council on Monday night. "Consumers and businesses will equally win. We are a big step closer to a truly common internal market in Europe", he added.
After hours of difficult negotiations, Parliament's negotiating team and Council and Commission representatives managed late Monday night to outline agreements on the remaining issues in the way of an overall political agreement on the new EU Consumer Rights' Directive.
The Council still needs to give its green light, but Parliament's negotiators hope to receive its final confirmation by Thursday 9 June. The deal will then need to be formally approved by Parliament in a plenary vote and by the Council. Parliament is expected to vote on the agreement at its June II or July plenary session.
What the new rules will mean
14 days to change your mind
The new rules will stipulate a 14-day EU-wide withdrawal period for distance and off-premises sales (i.e. those in which the consumer cannot see the good before buying it), during which consumers may change their minds. If they regret the purchase, for whatever reason, they may return it. The price paid by the consumer for the good must be refunded within 14 days of the withdrawal. This is a major step forward for consumer rights.
MEPs sought to insert a rule that would have required traders to pay the return costs of any goods priced above €40, but this proved unacceptable to the Council. Instead, MEPs proposed to Council, as a final offer, that the cost of returning any bulky item which cannot be returned by normal postage be clearly stated in the sales contract, so the consumer knows how much it will cost should he choose to return his purchase. If the trader does not comply with the information requirement, the consumer will not have to bear the costs.
Moreover, if a seller fails to inform a consumer about the withdrawal right, the period for withdrawal will automatically be extended to one year, as originally proposed by Parliament.
The new rules also aim to close a gap in existing EU legislation, by extending the consumer's right of withdrawal to home party sales and on-line auctions. However, auction purchases may be returned only if they were bought from a professional seller, not from a private person.
Digital goods, such as music, films or software programmes, will be exempted from the right of withdrawal. The sale will be regarded as concluded from the moment downloading begins.
Customized goods, such as a tailored dress or a made-to-measure coffee table, will also be exempted from the right of withdrawal.
When cancelling a service, for example when a painter has done only half the job, the consumer should pay a share of the bill equivalent to the proportion of the work already done by the service provider.
Delivery and responsibility for the parcel
Delivery is where many consumers experience disappointment. Under the new rules, any good ordered at a distance must be delivered to the buyer within 30 days, otherwise the consumer will have the right to cancel the purchase. The trader is responsible for any damage or loss of the good during delivery.
The right to make informed choices
It should be clear to consumers from whom they are buying, exactly what they are buying and how much it will cost when shopping online or ordering from a catalogue. The identity and address of the seller must always be clear.
The new information rights will also put an end to hidden charges, such as those associated with the "pre-ticked boxes" sometimes used in internet sales. In addition, the buyer will have to knowingly accept the total price before a sale is concluded.
No extra red tape for small firms and tradesmen
To avoid creating administrative burdens for the local grocer or the workman doing home repairs, "day-to-day transactions" where the good is delivered "immediately" will be exempted from the information rules. If a consumer calls a tradesman to deliver a service at his home, such as replacing a broken window with a new pane, at a cost of less than €200, the information need not be in writing, but may be delivered orally.
For urgent repairs, such as a burst water pipe, a right of withdrawal is considered inappropriate and will thus not apply.
Current consumer protection rules are set out in four EU directives stipulating minimum requirements. Over the years, EU Member States have added further, uncoordinated requirements, making consumer rights law into a patchwork of 27 differing national regimes. Also, as the original directives predated the digital revolution, consumers today are poorly protected when shopping on line.
In October 2008 the European Commission tabled a proposal to update and merge current EU consumer rights laws with the dual aim of ensuring a high level of consumer protection and facilitating the smooth operation of the single market. The new rules will cover almost all purchases, whether made in a shop, by phone, postal order or on the doorstep. However, these rules will improve the rights of on-line shoppers in particular, and hence should boost consumer confidence and cross-border on-line trade.
In 2010, nearly 60% of consumers bought goods or services via the internet, up from almost 40% in 2009. Between 2004 and 2010, this percentage rose from 20% to 40%.