The 2011 Consumer Rights Directive was recognised in Irish law in December 2013 by the European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013. The regulations introduce important changes to consumer law affecting e-commerce businesses and they will come into operation on 13th June 2014.
The objective of the 2011 Directive is to increase consumer protection across the EU. It consolidates the currently distinct laws for distance and off premises contracts and other types of consumer contract. The regulations will apply to all contracts concluded after 13th June 2014. A distance contract means any contract concluded between a trader and a consumer entirely by means such as the internet, telephone or by post. An off premises contract is concluded between a consumer and trader at a location that is not the trader’s business premises. The intention is that the directive will align and simplify rules across all member states so that there will be a level playing field across Europe. Another expectation is that consumer rights will be strengthened which should increase consumer confidence and facilitate cross-border shopping.
The European Commission has identified the 10 most significant changes for consumers in the new Directive as follows:
1. The elimination of hidden charges and costs on the internet.
2. Increased price transparency – the total cost of the product or service must be disclosed, including any extra fees.
3. Pre-ticked boxes will be banned across the European Union when shopping online.
4. The cooling off period for consumers has been extended from 7 working days to 14 calendar days. (Consumers can withdraw from a sales contract during that period).
5. Consumers will have improved refund rights which may include a refund of the cost of delivery. Any refund must be made within 14 calendar days (previously 30 days).
6. An EU-wide model withdrawal form will be introduced which consumers can use to withdraw from a contract.
7. Surcharges for the use of credit cards and hotlines are prohibited.
8. Clearer information must be furnished to consumers before they purchase goods about who bears the costs of returning goods.
9. Digital content has been specifically recognised and clear information must be furnished about digital products. Consumers also can withdraw from purchases of digital content up until the moment the actual downloading process begins.
10. Common rules for businesses will be introduced making it easier for them to trade all over Europe. A single set of core rules for distance contracts and off premises contracts aim to reduce transaction costs for cross border traders. This will have a knock-on effect on costs for consumers.
Any businesses that sell online need to review their practices to ensure compliance with the regulations when they are introduced on 13th June 2014. The terms and conditions of the business will need to be updated to ensure that the consumer has the right information at the right time so that businesses are not exposed to claims. The regulations will have a material impact on all businesses engaged in e-commerce and they need to begin preparing for this now.