Irish consumers will be the biggest spenders in Europe this Christmas season according to a recent eBay survey, with an average spend of €512.43 each. A large portion of this figure looks set to be spent online with 55 per cent of Irish consumers expected to turn to the internet in search of that perfect Christmas gift.
Despite its growing popularity, consumers still have some apprehension when it comes to online shopping. Common concerns reported to the European Consumer Centre include issues related to late or damaged delivery, queries on how to cancel an online contract, and problems with returning wrongly described or faulty products.
Under EU legislation, online shoppers enjoy a range of consumer rights and these rights are set to get even stronger next year when the new EU Consumer Rights Directive comes into effect.
The existing legislation only specifies minimum standards, so the precise level of consumer protection currently varies significantly cross the EU. For example, the 'cooling-off' period, during which consumers can cancel an online contract, ranges from seven working days in Ireland to 15 working days in Malta. The European Commission was concerned that these differences made businesses reluctant to sell to consumers in other EU countries and left consumers unsure of their rights when shopping across borders.
The new directive seeks to address these concerns by simplifying and fully harmonising the laws of member states relating to distance sales. The new rules will apply to contracts concluded after June 13, 2014 and they aim to enhance consumers' rights when shopping online or purchasing goods away from a retailer's store or premises.
How will consumers benefit from this new legislation?
Better cancellation rights
Under current Irish law, consumers have seven working days to change their minds and cancel an online contract. This is commonly referred to as the 'cooling off period'. Under the new legislation, this timeframe will be extended to 14 calendar days in all member states, running from the date the consumer receives the goods. The right of withdrawal will also be extended to online auctions, such as eBay, once the goods are purchased from a professional seller rather than an individual. The cooling off period will be extended to a year if the seller hasn't clearly informed the customer about their right to withdraw.
Businesses will be obliged to provide consumers with a model withdrawal form to use when cancelling contracts. This aims to make it easier for consumers to withdraw though they are not obliged to use this form.
Right to quicker refunds following withdrawal
Online retailers currently have up to 30 days to provide a refund to a consumer who cancels their online order. This will be reduced to 14 days from the date of notice of withdrawal and the refund must include the cost of delivery.
Clearer information on the cost of returning unwanted goods
Under current rules, consumers must bear the cost of returning unwanted goods. The new directive provides that if retailers expect the consumer to pay for returning the goods, they must clearly inform them beforehand, otherwise they must cover the cost of return themselves.
The retailer must also provide an estimate of return costs for bulky items in advance so that consumers can make an informed decision before purchasing the goods.
Ban on hidden fees
The new directive obliges retailers to disclose the total cost of the product or service, including any extra fees. Online shoppers will not have to pay charges or other costs if they were not properly informed of the full cost in advance. This provision aims to help protect consumers from 'cost traps' online which try to trick them into paying for a service they thought was free. Such traps are unfortunately very prevalent online and frequently catch out Irish consumers. (see panel ).
Ban on surcharges
Retailers will no longer be permitted to impose debit or credit card charges which exceed what it actually costs them to offer this means of payment. Equally, premium rate hotlines should become a thing of the past as traders will be prohibited from charging more than the standard telephone rate for their consumer helplines.
Ban on pre-ticked boxes
The new rules provide that if a retailer offers additional extras during the booking process, consumers must actively opt-in to these add-ons by ticking a box, and will no longer be bound by any pre-selected items. Consumers regularly complain to ECC Ireland that they had unwittingly purchased additional unwanted goods and services, such as insurance, through the use of these pre-ticked boxes by online retailers so this is a very welcome development.
New rights for digital content
Millions of consumers purchase music, films and books in digital format. The new legislation will give consumers a right to withdraw from purchases of digital content for the first time, but only up until the moment the actual downloading process begins.
Sellers will be obliged to give clear pre-contractual information to consumers concerning compatibility of digital content and any technical restrictions e.g. limits on the consumers right to copy the content.
The new directive is good news for consumers. It will significantly enhance cancellation rights and protect consumers from hidden and unfair online charges. The existing consumer protection legislation pre-dates the phenomenal growth in internet shopping and the updated provisions should boost consumer confidence and contribute to the future growth of cross-border ecommerce.