Saturday, June 25, 2011

New EU Consumer Law for Online Shopping

The European Parliament has approved a new consumer rights directive aimed at giving more rights to consumers, especially in online shopping situations. Via ZDNet:
In a vote on Thursday, the new Consumer Rights Directive was passed by 615 votes to 16, with 21 abstentions. The adopted text will have to be enforced in EU member states within two years, if it gets approved by the Council of Ministers in July.

From the EU release:
The new rules will stipulate a 14-day EU-wide withdrawal period for distance and off-premises sales (i.e. those in which the consumer cannot see the good before buying it), during which consumers may change their minds. If they regret the purchase, for whatever reason, they may return it. The price paid by the consumer for the good must be refunded within 14 days of the withdrawal. This is a major step forward for consumer rights.

The unintended consequence of such supposedly pro-consumer rules is that sellers will seek to protect against the risk of unreasonable returns by increasing the price. It might have been preferable to set a shorter mandatory period and allow for private ordering. Sellers would have charged lower prices for goods with shorter return periods and consumers would have had more choice. As long as the return period was clearly disclosed, consumers would not have been harmed.

More from ThisisMoney:
The rules state that traders are banned from charging consumers fees that exceed the cost of transacting a payment. Budget airlines such as Ryanair - who charge a £6 administration fee for booking with a credit card that is not a pre-paid Mastercard - argues that the new EU rules will not affect them. Ryanair's Stephen McNamara said: 'The change in rules will not affect us directly, our credit card charge is just an administration fee not a surcharge.'

Just more proof that Ryanair continues to believe it is above the law!