On 13 June 2014, Directive 2001/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, published on 22 November 2011 (the“Consumer Rights Directive” or “Directive”), became applicable. The Directive imposes new and amended requirements on traders with respect to consumer protection and aims at unifying the pre-existing sets of rules applicable with respect to distance contracts and off-premises contracts involving consumers across the European Union.
The Directive replaces both Directive 97/7/EC on the protection of consumers in respect of distance contracts as well as Directive 85/577/EEC on the protection of consumers in respect of contracts negotiated away from business premises. Additionally, the Directive amends both Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees, and Directive 93/13/EEC on unfair terms in consumer contracts.
Overview of the provisions of the Directive
As a general rule, the Directive applies to any contract between a trader and a consumer, subject to certain conditions provided in the Directive. These contracts include contracts for the supply of water, gas, electricity or district heating, including where these contracts are executed by public providers, but only where commodities are provided on a contractual basis. Certain types of contracts are excluded from the scope of application of the Directive, such as contracts for social services (e.g. social housing and childcare), contracts regarding gambling and financial services contracts.
The main changes brought by the Directive are as follows:
- specific information needs to be provided to consumers before any sale; this information is to include the identity of the trader, the total price of the goods or services and the conditions for terminating the contract
- traders must seek express consent from the consumer regarding any extra payment (pre-ticked boxes must be avoided)
- consumers may withdraw from a distance or off-premises contract without giving any reason within a term of 14 days (in contrast to the previous 7-day term). The starting date of this term varies depending on the type of contract executed. By way of example, for service contracts the term commences on the date of execution of the contract, whereas in contracts for the sale of goods the relevant date is the date on which the consumer (or a third party other than the carrier as indicated by the consumer) acquires physical possession of the goods
- failure to inform the consumer of the abovementioned right to withdraw gives rise to an extension of the 14-day withdrawal term by an additional 12 months
- in case of a consumer’s withdrawal from a contract, the trader is bound to reimburse all payments received from that consumer within 14 days (reduced from the previous 30-day timeframe) starting from the day on which he is informed of the consumer’s decision to withdraw
- in case of withdrawal, the consumer shall bear the direct costs of returning the goods received under a contract only if the consumer has been informed by the trader of this obligation prior to the parties entering into the contract. Otherwise, those costs shall be borne by the trader. The trader shall also bear those costs if that was agreed in the contract.
Member States across the whole of the European Union were required to implement the Directive in a timely manner so as to allow the application of the measures provided therein, from June 13, 2014.
Implementing the Directive in Romania
On June 11, 2014, the Romanian Government issued Emergency Ordinance no. 34/2014 implementing the Directive (the “GEO”). The GEO became effective on June 13, 2014.
By implementing the Directive, the GEO rescinded two domestic pieces of legislation, namely Government Ordinance no. 106/1999 on off-premises contracts and Government Ordinance no. 130/2000 on consumer protection regarding the conclusion and execution of distance contracts. Further, the GEO amends certain legislation, such as Government Ordinance no. 21/1992 on consumer protection and Government Ordinance no. 111/2011 on electronic communications.
The GEO expressly provides that its scope of application includes contracts for the supply of electronic communications dedicated to the public or for the supply of services of access and connection to public networks of electronic communications.
In case of termination of a contract due to failure by the trader to deliver the goods in a timely manner, the GEO provides that the trader must reimburse all payments made by the consumer pursuant to that contract within 7 days calculated from the date the consumer informs the trader of his/her decision to terminate the contract. The Directive does not provide for such a specific term for reimbursement in these cases.
Under the GEO, the competent Romanian authorities for enforcing the GEO’s provisions are the National Authority for Consumer Protection (in Romanian, Autoritatea Nationala pentru Protectia Consumatorilor) and the National Authority for Management and Regulation in Communications (in Romanian, Autoritatea Nationala pentru Administrare si Reglementare in Comunicatii).
In line with the requirements of the Directive, the GEO also provides penalties applicable in case of infringements of the new legislation. Those penalties consist in fines ranging from RON 1,000 to RON 5,000 (approx. EUR 200 to EUR 1,100).
The GEO applies to contracts executed starting 13 June 2014, whilst ongoing contracts executed before that date continue to be governed by the legislation in force at the time of their execution.
The changes brought by the GEO may have a significant impact on traders, including an impact on costs, whether directly (e.g. costs for returning the goods) or indirectly (e.g. reconfiguration of traders’ IT platforms in order to accommodate the new legal requirements, and updates of the terms and conditions for online businesses to address the requirements imposed by the GEO). Also, given the favourable regime created by the GEO for the return of goods, an increase in the rate of returns may be envisaged, triggering the need for traders to adapt their return policies and procedures accordingly.