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UK Government consults on consumer protection law overhaul

The Government has asked businesses whether they back a set of consumer protection laws proposed by the European Commission. If the proposals become law then retailers across Europe will have to offer the same consumer rights.12 Nov 2008

European Union Directives currently require EU nations to pass consumer protection laws, but there are a number of options available to countries regarding what rights they enforce.

The European Commission has argued that a total review of consumer rights law in Europe is needed, as is more consistency between countries if cross-border commerce is to take off.

The UK Government has said that it recognises that the EU Directives, which have developed over time, are not good enough for their current purpose.

"It is acknowledged that the existing legislative framework does not adequately reflect new market developments such as the rapid growth in e-commerce and mobile commerce (m-commerce) in recent years," said the Government's consultation, which is being run by the Department of Business, Enterprise and Regulatory Reform (BERR). "There are also inconsistencies between the Directives, for example in their definitions of key terms."

The proposed Consumer Directive would replace four existing EU laws: the Doorstep Selling Directive, the Unfair Terms in Consumer Contracts Directive, the Distance Selling Directive and the Consumer Sales and Guarantees Directive.

Minister for consumer affairs Gareth Thomas said that he backed the move to update legislation.

"Full harmonisation means that no Member State will be able to prescribe stronger rules of protection in the areas covered by the Directive. Business will be free to offer more to consumers in terms of commercial guarantees just as they do now, but for traders selling armchairs in Athens, lampshades in Lisbon, or sofas in Stockholm, a uniform set of consumer rights should increase their willingness to sell cross-border," he said.

"I welcome this proposal from the European Commission as a positive step in opening up the internal market. Expanding the choice and boosting the confidence of consumers, as well as reducing burdens on business, is crucial to the success of our European economy," he said.

If the Directive were passed in its current form, consumers across all 27 EU member states would be entitled to "a 14 day cooling-off period for purchases made online or on the door-step; consistent protections when goods are not delivered; clearer rules on the responsibilities of both traders and consumers in returning goods; [and] stronger protections [when] buying at home from doorstep-sellers," said a BERR statement.

One area where the UK may disagree with EU plans is in relation to entitlement to a refund for faulty goods. The UK has an automatic refund entitlement, but that is not demanded by any EU Directive. Under current plans that automatic right would disappear and consumers would only be allowed to demand their money back if repair or replacement options were not available.

The Law Commission and the Scottish Law Commission are consulting seperately on that issue.

Thomas said that while it is a good idea to foster cross border commerce, the UK's consumer laws also need to be protected.

"While in the UK our rules can sometimes be complex we have a strong and effective consumer protection regime," he said. "I am determined to ensure that we retain a strong level of consumer protection that is fair on business; unnecessary costs on business are inevitably passed on to the consumer."

BERR has asked for responses to the consultation by 2nd February next year.