New EU rules on consumer rights

By: Mark Williams

Date: 26 October 2011

The new EU Consumer Rights Directive has been adopted. The new legislation seeks to strengthen consumer rights in all 27 EU countries, particularly for those who shop online.

Currently, UK customers are protected by a wide range of laws - such as Consumer Protection from Unfair Trading Regulations and the Distance Selling Regulations - but the new EU law should simplify matters for shoppers and businesses alike. The UK has two years to implement the rules at national level - the new law should be in force by autumn 2013. So what changes should businesses and consumers be aware of?

Online consumers will receive protection against “cost traps”. An example is when fraudsters try to trick consumers into paying for items that are available free elsewhere (eg horoscopes or recipes). Consumers will have to confirm in advance they understand they must pay for such items.

Increased price transparency means traders will have to disclose the total cost of the product or service, as well as any extra fees. If online shoppers aren’t properly informed before ordering, they won’t have to pay any such additional charges.

Pre-ticked boxes on websites will be banned. For example, currently, when buying a plane ticket, you may be offered travel insurance via a “pre-ticked” box, which you have to untick if you do not want it.

Consumers will also get 14 days to change their mind after purchasing (currently, under EU law, it’s seven days). If a seller hasn’t clearly informed customers about their withdrawal right, the return period will be extended to one year.

Consumers will also enjoy a right of withdrawal for solicited visits, for example, when a trader calls in advance and presses the consumer to agree to a visit. The right of withdrawal is extended to online auctions, although goods can only be returned when bought from a professional seller.

The withdrawal period will start when the consumer receives the goods, not when the contract is concluded (as is currently the case). The rules will apply to internet, phone and mail order sales, as well as sales outside shops (eg doorstep sales).

Consumers must be refunded within 14 days of their withdrawal (including delivery costs). Generally, traders will bear the risk for any damage to goods during transportation, until the consumer receives the goods. Consumers will receive a model withdrawal form they can use if they wish to withdraw from a contract concluded at a distance or at the doorstep.

Traders will no longer be allowed to charge more than the costs they incur when accepting card payments, neither will those who operate customer telephone hotlines be able charge more than the basic telephone rates.

If traders want consumers to pay for returning goods they must clearly inform consumers of that fact in advance. They must also clearly give at least an estimate of maximum costs of returning bulky goods bought online or by mail order.

Information about digital content will become clearer, including its compatibility with hardware and software and any technical protection measures (eg limited rights to copy content).

Mark Williams is editor of the Start Up Donut

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