New Amendments to the Consumer Protection Act in January 2023: National Implementation of the Omnibus Directive Leading to Major Changes for Businesses
At the turn of the year, we discussed how the Consumer Protection Act (38/1978, as amended) is entering the digital age following the implementation of the EU’s Sales of Goods Directive (2019/771) and the Digital Content and Digital Services Directive (2019/770) into national legislation (see here and here). Now, further amendments lie ahead when the so-called Omnibus Directive (2019/2161) is implemented into national legislation. The new provisions of the Consumer Protection Act will enter into force on 1 January 2023 in order to allow companies to prepare for the new requirements.
The Omnibus Directive aims to improve remedies for consumers, remove any shortcomings and inconsistencies of the provisions and lay down penalties in the event of infringements of certain directives. In this article, we will highlight the key amendments based on the Omnibus Directive of which businesses trading with consumers should be aware.
Reforms on price reduction announcements
Amendments to chapter 2 section 11 of the Consumer Protection Act will revise the regulation on price reduction announcements.
- Going forward, any announcements of a price reduction must include the lowest price applied to the goods in the 30 days prior to the price reduction.
- If the price reduction is progressively increased in a continuous marketing campaign of no more than 60 days, the lowest price to be disclosed is the lowest price of the 30 days preceding the first price reduction.
- However, this reporting obligation does not apply to services or rapidly expiring foodstuff.
New extensions to the right of withdrawal in door-to-door selling
The new provision in chapter 6 of the Consumer Protection Act includes extensions to the consumers’ right of withdrawal in door-to-door selling. In this respect the regulation is purely national and not based on the Omnibus Directive.
- In future, the consumers’ right of withdrawal in door-to-door selling will also apply to custom-made products when the consumer has not explicitly requested a house call on their own initiative.
- Under current legislation, the seller already has an obligation to inform the consumer before concluding a contract if there is no right of withdrawal. With the amendment, if the seller neglects this obligation, the contract is not binding on the consumer.
- There are no national restrictions on when door-to-door selling can be performed. Nevertheless, performing sales early in the morning, late at night or on a national holiday may constitute an aggressive practice that is contrary to the Consumer Protection Act.
Regulation on consumer reviews
The Omnibus Directive also affects the consumer reviews published by the businesses themselves.
- Businesses must ensure that published reviews have been written by consumers who have actually used or purchased the product.
- Businesses must also provide consumers with information about whether and how they have ensured that the published reviews originate from such consumers.
- In turn, it is prohibited to:
1. provide fake consumer reviews or endorsements;
2. purchase reviews or endorsements;
3. misrepresent consumer reviews or social endorsements.
Information requirements for marketplace providers
The Consumer Protection Act will also include new information requirements for providers of online marketplaces. An ‘online marketplace’ means a virtual marketplace that allows consumers to conclude distance contracts with other consumers or businesses.
- The provider of a marketplace must, among others, inform the consumer before concluding a contract if the seller is a trader or not.
- If the seller is not a trader but, for example, a private individual, the provider of the marketplace must also state that consumer protection legislation is not applied to the contract to be concluded.
Compensation for damages caused by unfair marketing and practices
Following the Omnibus Directive, consumers may have the right to compensation for any damage caused by the business to the consumer by unfair marketing or unfair commercial practices. This kind of damage can, for example, include travel expenses incurred by the consumer. In addition, the consumer may be entitled to a reasonable price reduction if the trader has acted unfairly, for example by marketing aggressively or misleadingly.
Written confirmation procedure for telemarketing
Parliament has also accepted new legislation on telemarketing, which also enters into force on 1 January 2023. This national regulation is not based on the Omnibus Directive.
This regulation will include an obligation to implement a written confirmation procedure. In other words, after making an offer to a consumer during a call, telemarketers would, in principle, have to provide the consumer with the offer in a permanent form, for example as an email attachment. Unless the consumer accepts the offer in a permanent manner after the call, the contract is not binding on the consumer. Neglecting to use the confirmation procedure could result in penalty payments for the trader.