EC proposes overhaul of statutory consumer law

The European Commission wants to give more rights to consumers and boost cross-border trading by overhauling existing consumer protection legislation.

The proposed Consumer Rights Directive would include rights such as giving consumers a longer cooling-off period if they buy online or by mail order, new rules prohibiting retailers’ hidden charges and a blacklist of unfair terms and conditions.

The new rules would replace four laws in total, including the Unfair Contract Terms Directive, the Distance Selling Directive and the Sales and Guarantees Directive. In the UK, these directives are enforced under the Unfair Terms and Conditions of Contract, the Distance Selling Regulations and the Sale and Supply of Goods to Consumers Regulations 2002 and its relevant and related legislation (eg the Sale of Goods Act) respectively.

Meglena Kuneva, the European Consumer Commissioner, said: “The new rules will significantly strengthen consumer protection across the EU and guarantee equal protection for consumers wherever and however they shop – online or in the high street. It is the most far-reaching overhaul of consumer rights in 30 years."

For distance sales, such as online sales, consumers will be entitled to an EU-wide cooling-off period of 14 calendar days during which they can change their minds about a contract they have signed. Retailers will have 30 calendar days in which to deliver products, according to the new rules, and the seller will bear all the risks inherent in sending a product.

If delivery does not happen or is late the consumer is entitled to a refund within seven days. Hidden charges will be illegal and retailers will have to provide clear information on prices and all charges before any purchase is made.

Unfair terms that appear in consumer contracts will be invalid. This includes pre-ticked options – for example, for travel insurance, priority boarding and baggage.

However, many of the rules proposed in the new directive do not actually appear to enhance UK statutory consumer law. For example, currently in the UK the cooling-off period given under the Distance Selling Regulations is seven working days, starting from the day after delivery.

This can easily add up to more than 14 days and the consumer does not have to return the goods within a specified time.

However, not all EU member states have such consumer-friendly legislation. Ms Kuneva said new rules would establish the kind of consistent system which is necessary if cross-border trade is expected to flourish.

The European Commission also claimed that some retailers could cut compliance costs by 97 per cent by having a standard set of consumer contract terms across the EU's 27 countries.

The Department for Business, Enterprise and Regulatory Reform (Berr) will be consulting on the new rules. It said it would consult consumers and businesses to ensure new proposals didn't dilute the strong protection already enjoyed by UK consumers. It also expressed disappointment that the Commission had not chosen to create simpler rules covering services as well as goods.

"This proposal is a good start and we will consult carefully on its implications for consumers and business. Our domestic Consumer Law Review is looking at how to improve the consumer framework across the full range of goods, services and new products such as digital downloads,” a representative said.

Before becoming a ratified directive, the proposals must be agreed by the European Parliament and by governments through the Council of Ministers.