Buying online: Parliament beefs up protection against fraudsters
- 37% of online shops and booking websites for travel, entertainment, clothing, electronic goods and consumer credit services were found to be in breach of EU consumer laws in 2014
- national authorities will get more powers to halt online scams and fraud
- coordinated actions to tackle cross-border infringements in the EU
EU-wide rules to better protect consumers against scams and detect and stop rogue traders more swiftly were approved by MEPs on Tuesday.
National enforcement authorities will have more powers to detect and halt online breaches of consumer protection laws and be able to coordinate their actions better across the EU, under the revised Consumer Protection Cooperation (CPC) regulation.
The new rules aim to close legal loopholes, which are exacerbated because consumer protection systems differ from one EU country to the next. Investigation and enforcement powers must include, among others:
- requesting information from domain registrars and banks to identify rogue traders,
- purchasing goods or services as test purchases, including under a cover identity (“mystery shopping”),
- ordering the explicit display of a warning to consumers, or ordering a hosting service provider to remove, disable or restrict access to an online interface (e.g. website or app) if there are no other effective means to stop an illegal practice,
- imposing penalties, such as fines or periodic penalty payments,
- seeking to obtain commitments from the trader to offer adequate remedies to the affected consumers, and informing them of how to seek compensation.
Tackling widespread breaches
The EU Commission will coordinate actions in cases where an infringement does or is likely to do harm to the collective interests of consumers in at least two-thirds of the member states, accounting, together, for at least two-thirds of the EU population.
One of the Parliament’s crucial demands during the negotiations with the Council was to involve consumer organisations more. They will play a proactive role by flagging suspected infringements, since they might know about them earlier than the authorities (“external alerts”).
Olga Sehnalová (S&D, CZ), rapporteur, said: “The new rules will strengthen and improve cooperation between all consumer protection actors, so that they can more easily monitor compliance and address cross-border infringements. National authorities, the Commission and consumer organisations, all acting together, will create an effective mechanism to combat rogue traders both online and offline and enforce consumers’ rights in the Single Market”.
The legislative text, approved by Parliament by 591 votes to 80, with 15 abstentions, still needs to be formally adopted by the Council of the EU. The regulation will apply 24 months after the date of its entry into force.
Example of past practices that should be tackled better under the new EU rules:
- A cross-border promotion of short duration by an airline which later on cancelled the discounted tickets
- A long-term subscription hidden behind an offer to try to win a phone for 1 €
- An online trader not delivering the design furniture it claims to sell - and who relocated 4 times over 3 years
- Complaints on car rental prices made to European Consumer Centres showing that consumers are discriminated against based on their country of origin