The consumer rights landscape in Europe will change later this year. The European Union has issued a Consumer Rights Directive (CRD) to simplify and harmonise consumer protection legislation throughout the European Union. The EU’s aim is to increase certainty, consumer protection and confidence and cross-border trade. The CRD must be implemented into national laws by each EU member state by December 13, 2013.
The CRD increases a consumer’s rights where consumer goods are bought other than on retail premises – for example, where purchases are made online, from a catalogue or via online auction. It will apply to all such contracts concluded with EU-based consumers after June 13, 2014.
All businesses selling consumer products into the EU will need to review their current processes, website design and architecture, and terms and conditions to ensure compliance with the new laws.
What are the key changes?
The CRD details the information that sellers must provide to EU consumers prior to conclusion of a contract. These requirements differ depending on whether the contract is concluded at a distance or otherwise. In the case of distance contracts, the CRD acknowledges that information requirements will need to be adapted to take into account technical restraints (e.g., space restrictions on a mobile phone screen).
Extension of cooling-off period
Consumers will have 14 days (increased from 7 days) to change their minds and withdraw from a distance or doorstep contract for any reason. For purchased services, this cooling-off period begins from the conclusion of the contract and, for goods, from the time that the consumer receives the goods. This period may be extended for up to 12 months (increased from 3 months) if the retailer fails to inform consumers of their withdrawal right during the sales process.
The withdrawal right does not apply to certain goods or services (e.g., personalised/bespoke goods). In addition, there is no right of withdrawal for service contracts after the services have been fully performed if the consumer expressly consented to such performance and acknowledged that the withdrawal right would be lost following such performance.
The CRD introduces a template withdrawal form and includes some model withdrawal rights wording for inclusion in terms and conditions.
Refund period reduced
Sellers will have 14 days from the date of a notice of cancellation to provide a refund (reduced from 30 days). The refund must include delivery costs.
All goods must be delivered within 30 days from conclusion of the contract, unless otherwise agreed.
- If a product seller wants consumers to bear the direct costs of returning goods, consumers must be clearly informed in advance.
- A seller may not charge more than its actual costs for use of credit cards or any other method of payment and may not charge consumers more than the basic rate for helpline calls.
- Sellers must ensure that the total cost of a product or service is disclosed prior to conclusion of the contract, including any additional charges.
Sellers must ensure that consumers placing an online order explicitly acknowledge their obligation to pay. Indeed, the CRD suggests that the website button which is clicked to activate an order is labelled with the words ‘order with obligation to pay’ or similar clear wording. In addition, pre-ticked boxes for added extras are banned; consumers must expressly opt in.
Any business selling consumer goods into the EU should review its current sales channel procedures to check what changes will be needed to comply with the new laws implementing the CRD. Website terms may need to be changed and certainly online ordering processes (and corresponding refund and returns processes) will need to be updated.