Consumer Rights Directive: A Guide for Traders on Irish and EU Laws, Exams of Law

Download Consumer Rights Directive: A Guide for Traders on Irish and EU Laws and more Exams Law in PDF only on Docsity! The Consumer Rights Directive A guide for traders dealing with consumers Introduction Consumers’ rights and interests are protected by law. If you do business in Ireland, you must comply with Irish and EU consumer protection laws that are designed to protect the interests and welfare of consumers. Irish consumer protection law has evolved as a distinct area of law that concentrates on the general protection and promotion of those rights and interests. One of the more current developments in this area concerns the rights a consumer has under the Consumer Rights Directive. The Consumer Rights Directive The Consumer Rights Directive (CRD) has been implemented in Ireland by the European Union (Consumer Information, Cancellation and Other Rights) Regulations, S.I. 484 of 2013, (the Regulations). The CRD has introduced a number of important changes to consumer protection law in Ireland that traders need to be aware of. The Regulations apply to contracts concluded after 14 June 2014. The Regulations provide consumers with increased protection when they enter into distance contracts (such as online sales), off-premises (for example doorstep sales) and on-premises contracts with traders based in Ireland and other EU countries. A distance contract includes buying something online, over the phone, from a mail order catalogue or from a TV shopping channel. The most significant point being that the consumer and trader are not physically in each other’s company at the time the contract is concluded. An off-premises contract is one that is offered or concluded away from the trader’s premises, such as in the consumer’s home, workplace or on an excursion organised by the trader. An on-premises contract is a contract between a trader and a consumer which is neither a distance contract nor an off-premises contract. The Regulations have introduced a number of new provisions and changes to existing obligations which traders must comply with. These provisions include bans on hidden charges, as well as a new extended withdrawal period of 14 days for off-premises and distance sales, where consumers have the right to cancel without giving a reason or incurring a penalty. Traders are also obliged to refund consumers sooner than required under previous legislation. Failure to comply with these provisions may constitute a criminal offence. It can also mean that consumers will not be liable for certain costs. Summary of requirements These requirements apply to all contracts: o You cannot take any additional payments without the consumer’s express prior consent (e.g., pre-ticked boxes are prohibited); o You must deliver any goods purchased within 30 calendar days, unless agreed otherwise with the consumer; o You cannot oblige the consumer to use a premium rate telephone line to contact you about an existing contract; o You cannot impose excessive payment surcharges when consumers pay by certain means, such as credit or debit cards ; Provision of Information These information requirements apply to on-premises contracts and the information must be provided prior to the contract being concluded: o A description of the goods or service the consumer is buying o The name of the trader, including any trading names o The trader’s address and telephone number o The total price, including any taxes o For contracts for the sale of goods; the trader is legally obliged to inform the consumer of the trader’s obligation to provide goods in conformity with the contract These additional information requirements will apply to on-premises contracts, where applicable: o Any unavoidable costs associated with the contract, such as delivery or postal charges o Arrangements for payment and time of delivery committed to by the trader o The trader’s complaint handling policy o Details of after-sales service and guarantees o The functionality of digital content, including any technical protection measures o Details of any operational issues that digital content may have with certain hardware or software These information requirements apply to off-premises and distance contracts and the information must be provided prior to the contract being concluded: right to withdraw. The consumer does not have to give a reason for cancelling the contract, but is responsible for the cost of returning the goods (as long as this cost was made clear to them beforehand). Under the Regulations, the trader must provide consumers with access to the model cancellation form which can be found in Schedule 3 to the Regulations. You do not have to send a hard copy with each delivery, but you must make the form available to consumers online. If the trader wishes a sample withdrawal form can be provided on the trader’s website, making it easier for consumers to avail of this right. There are consequences for not providing information on the right of withdrawal. If the trader does not inform the consumer of the right of withdrawal, the cancellation period will be extended to twelve months from the date it would have expired if the information had been provided. If the trader provides the information within this 12-month period, the withdrawal period expires after 14 days from the date the consumer receives it. The trader does not have to accept the cancellation of a contract in certain circumstances, for example if:  The goods are personalised for the consumer who purchased them  The goods are perishable or will deteriorate quickly  The price of the goods depends on fluctuations in financial markets  The service contracted for has already been fully performed, with the consumer’s agreement  The seal on the goods have been broken by the consumer and cannot be resold, for example for hygiene or health reasons  The seal on audio or video recordings or computer software seals have been broken by the consumer  The goods are newspapers or magazines  The goods were purchased at a public auction Remember, however, that consumers need to be informed in advance if they do not have a cancellation right. A full list of exclusions from the right to cancel off-premises or distance contracts is laid out in Regulation 13 of the Regulations. Main provisions that traders need to be aware of  Ban on pre-ticked boxes Under the Regulations, traders are prohibited from having boxes pre-ticked during the booking process, as this may cause some consumers to inadvertently pay for extras that they do not require. Consumers must explicitly indicate that they opt-in to any extra costs (such as insurance or car hire).  Ban on hidden fees and charges Traders must disclose the total cost of the product or service, including any unavoidable additional fees (e.g. taxes or delivery charges), before the order is confirmed. Consumers will not have to pay extra charges if the trader does not inform them of these costs in advance.  Obligation to make it clear when a consumer incurs a charge Under the Regulations, a trader that sells online or over the phone must get the consumer’s express consent to pay the trader – whether at the point of ordering or a later date. If placing an order online or over the phone involves pushing a button, or some similar automated function, a trader must make it abundantly clear to a consumer if placing that order puts the consumer under an obligation to pay. If a trader fails to comply with these obligations, the consumer is not bound by the contract or order.  Right to quicker refunds Previously, online traders were obliged to refund consumers who withdrew from a contract within 30 days. Under the Regulations, this period has been shortened to 14 days from the day on which the trader is informed of the consumer’s decision to withdraw. The only circumstances in which a trader can postpone refunding a consumer is to wait to receive returned goods or proof of their return. Once the trader receives either of those, the consumer must be refunded.  Ban on surcharges The Regulations prohibit traders from imposing credit or debit card charges which exceed the actual cost borne by the provider of offering this method of payment. If the trader operates a hotline, it is prohibited to charge more than the basic telephone rate for calls.  Clearer information on the cost of returning unwanted goods Consumers who avail of the fourteen 14 day withdrawal period have to pay for the cost of returning unwanted goods, as long as the trader has informed them of this before concluding the contract. If the trader does not inform the consumer of this, he will have to cover the cost of the consumer returning the item. (The trader will also have to cover the costs of return if goods are being returned because they are faulty.) In the case of distance contracts, traders are also obliged to provide an estimate of return costs in advance if the item is bulky or difficult to transport, so the consumer may make an informed choice before buying the goods.  Protection for digital purchases Consumers must be clearly told about the compatibility of digital content with hardware and software. They must also be told if there are any technical protection measures on an item, such as a limit on making copies. The right of withdrawal applies to digital content not supplied on a durable medium, as for other purchases, unless consumers have given their express consent to the download, and acknowledged that they will lose their cancellation rights once they access its content. Where digital content, such as computer software, is supplied on a sealed CD there is no right of cancellation where the product is unsealed after delivery. Check if you are in compliance with the Regulations In order to comply with the Regulations, traders should review their marketing and ordering processes to ensure that they are in line with the requirements listed above. It is important in particular to note:  The requirement to provide consumers with all of the information specified in the Regulations in a plain, intelligible, accurate and timely manner  The extended 14-day withdrawal period and when they should apply  The requirement to provide a cancellation form  The ban on additional payments being displayed as a default option (automatic opt- ins)  The addition of payment surcharges that cannot be directly attributed to the cost of providing that payment method  The requirements of the Regulations in relation to digital products What sanctions and penalties may be imposed if you are found to be in breach of the Regulations? The Competition and Consumer Protection Commission has a range of powers to ensure traders comply with consumer protection law. These are:  Prosecution  Compliance notices  Undertakings  Prohibition orders  Fixed payment notices (€300 fine) If found guilty of an offence, a trader will be liable on summary conviction to a fine up to a maximum of €5,000, or up to 12 months’ imprisonment, or both. A trader will be liable on conviction on indictment to a fine up to a maximum of €60,000, or up to 18 months’ imprisonment, or both. Additional information is included in the enforcement section. Disclaimer The information contained on this webpage is for the purposes of guidance only. The information is provided with the understanding that it does not constitute legal advice. As such, it should not be used as a substitute for consultation with professional advisers.