The new law, which was originally proposed by the Commission in July 2003, seeks to remove barriers to information exchange and co-operation. It also empowers enforcement authorities to seek and obtain action from their counterparts in other Member States.
According to the Commission, catching rogue traders is hard enough in a single Member State but it can become almost impossible when they relocate to another country, as increasing numbers appear to be doing.
The growth of new technologies and opportunities is simply exacerbating the problem, with trade group the European Advertising Standards Alliance (EASA) estimating that around 63% of the cross-border complaints received between 1992 and 2002 concerned rogue or peripheral traders.
The Commission therefore concluded that co-operation between national consumer protection authorities is the only way to tackle the rogue traders, who have recently been responsible for such scams as misleading and threatening clairvoyance services, modem hi-jacking, deceptive prize draws, unsolicited first aid kits accompanied by demands for payment, direct marketing of slimming products to children and misleading marketing by 'holiday clubs'.
The new law is designed to enable national authorities to exchange information and co-operate with counterparts in other Member States as easily and seamlessly as with other authorities in their own country.
It obliges each Member State to enforce EU law in its territory on behalf of all EU consumers, and requires them to designate a public enforcement authority to be part of the EU-wide mutual assistance network. Each of these authorities will be able to call on other members of the network for assistance in investigating possible breaches of consumer laws, and taking action against rogue traders. The hope is that this will boost the confidence of consumers and business in the Internal Market.
"Cross-border scams don't just cheat consumers. They also undermine confidence in the EU's Internal Market. Member States need to work together to root out the rip-off merchants. Our EU-wide enforcement network gives them the means to do that", said David Byrne, the European Commissioner for Health and Consumer Protection.
"Rogue traders have been put on notice: they will soon have no hiding places in the EU," he added.
The regulation on consumer protection cooperation was approved by the Council of Ministers on Thursday evening and should come into force in 2006, according to the Commission.