On 11 October 2011 the new EU Consumer Rights Directive was formally adopted by Member States. It substantially strengthens consumer rights in all 27 EU countries, particularly when shopping online.

Here are a few of the key benefits to consumers:

1. Hidden charges and costs on the Internet will be eliminated

From now on, consumers must explicitly confirm that they understand that they have to pay a price and will be protected against hidden “cost traps” on the Internet, for example, paying for ‘free’ services, such as recipes.

2. Increased price transparency

Traders have to disclose the total cost of the product or service, as well as any extra fees. Consumers will not have to pay charges or other costs if they were not properly informed before they place an order.  This is an issue that has attracted particular focus in the budget airline market.

3. Banning pre-ticked boxes on websites

Currently, consumers often unwittingly end up with additional services on a default basis having failed to un-tick associated boxes. These pre-ticked boxes will be banned across the EU meaning that positive “buy-in” will be necessary.

4. 14 Days to change your mind on a purchase

Previously, the time period where a consumer could withdraw from a sales contract was 7 calendar days. This has been extended to 14 calendar days. The time period will also start from the moment the consumer receives the goods, as opposed to the old legislation, which was from the conclusion of the contract. In addition:

  • Where a seller hasn’t clearly informed the customer about the withdrawal right, the return period will be extended to a year;
  • Where a trader calls a consumer beforehand and presses the consumer to agree to a visit (solicited visit), the consumer will also enjoy the right to withdraw;
  • Online auctions, such as eBay are also included (though goods bought in auctions can only be returned when bought from a professional seller); and
  • The EU has introduced a model withdrawal form which can be used for any contract in the EU, making it more accessible and faster for consumers.

5. Better refund rights

Consumers must now receive their refund within 14 days of the withdrawal. This includes the costs of delivery. Also, if traders want the consumer to bear the cost of returning goods after they change their mind, they have to clearly inform consumers about that beforehand, typically in their terms and conditions, otherwise they have to pay for the return themselves. Traders must also give an estimate of the maximum costs of returning bulky goods before the purchase, so consumers can make an informed choice before deciding from whom to buy.

6. Eliminating surcharges for the use of credit cards and hotlines

Traders will not be able to charge consumers more for paying by credit card (or other means of payment) than what it actually costs the trader. Traders who operate telephone hotlines will also be unable to charge more than the basic telephone rate for the telephone calls.

7. Information on digital products

More detail will be provided, including product compatibility with hardware and software and the application of any technical protection measures, for example limiting the right for the consumers to make copies of the content.

8. Unified approach for businesses over Europe

The new legislation provides common rules for all businesses to ensure a similar approach in trading. These include:

  • A single set of core rules for distance contracts and off-premises contracts in the European Union, creating a level playing field and reducing transaction costs for cross-border traders, especially for sales by internet; and
  • Standard forms, for example one to comply with the necessary information requirements on the right of withdrawal.

The full text of the directive will be published in the Official Journal shortly. Member states will have two years from the publication in the Official Journal to implement the Directive into national legislation.