The traps of online shopping: the most recent sweep investigation reveals irregularities in how information is presented to consumers

Last week the EU Commission published a press release on the results of a recently conducted EU-wide sweep of e-commerce websites that revealed shocking results: more than half of the websites breached aspects of EU consumer law.

The sweep extended to 560 websites in 26 countries (including 24 Member States, Norway and Iceland), and included a range of websites, from selling clothing, to audio and video equipment and digital content.

More than 60% of websites showed irregularities. It is in particular striking that:

• Information was misleading in particular in regard to the final price of products. On more than 31% of the websites that offered discounts, consumer authorities suspected that the special offers were not authentic or they thought the way in which the discounted price was calculated unclear. On around 37% of websites the final price at payment was higher than the initial price offered, mainly due to the lack of information on extra unavoidable fees on delivery, payment methods, booking fees etc.
• 59% of the traders failed the obligation to provide an easily accessible link to the  Online Dispute Resolution Platform, and
• Almost 30% of websites information on the right of withdrawal was no transparent.

The press release does not contain any information on interesting question on what actions are to be followed to address the above irregularities.

Sweep of telecommunication and other digital services websites

On May 18 the European Commission and national consumer protection authorities published their new sweep report revealing misleading commercial practices adopted by websites offering telecommunication (e.g. fixed/mobile phone, internet) and other digital services (e.g. streaming) (see more Buying telecom services online...). Out of 207 screened websites - 163 could be currently infringing EU consumer law. The most common suspicious practices concerned: 

• incorrectly advertising certain packages as free or discounted, as in fact these belonged to a bundled offer; 
• not offering a dispute resolution system (or link to ODR); 
• maintaining a possibility of unilateral change of T&Cs without adhering to rules on notification or providing a justification;
• providing incorrect or misleading information on refunds in case of either withdrawal from the contract or non-conformity;
• automatic contract renewals without properly informing consumers about this.

From the EU Commission website

Sweep on travel websites

Yesterday, the results of the latest sweep investigation have been published. A sweep investigation is a "coordinated enforcement action" whereby national authorities simultaneously check a certain sector's operator's compliance with EU law. This time, it concerned travelling websites. 

An earlier investigation in 2013 had found that 382 of the 552 websites checked did not fully comply with EU consumer law. The investigation was repeated in order to see whether the situation had improved after the first report. 

What the national authorities scrutinised was essentially whether the websites offered sufficient (and sufficiently early) transparency as to prices, and also how easy they made it for the consumer to know whom they were contracting with and how, if need be, they could file a complaint. 

Indeed, many websites did not clearly show the trader's identity/the procedure to be followed in case of complaints, and additional costs (such as luggage surcharges) also seem to represent a source of concern. All in all, 38% of the websites checked still seem to be "somewhat" in breach of EU law. 

The Commission's Q&A on the sweep contain a few useful tips for consumers who buy travelling services (not necessarily) online:

• Can you contact the trader? (and, if not the same as the trader, the airline/hotel)
• Do you have all the information you need about the air travel or hotel? 
• How much is it really going to cost? Look out for the final price; 
• Do you have a right to reimbursement? Check the cancellation policy;
• Can you find easily the contract terms? You should be able to print or save them *before* the purchase;
•  Do you have a problem? Report it immediately to the contacts indicated to you, and if need be to a consumer association/competent authority;
• Is your flight delayed? Remember that as a passenger you have specific rights! (http://ec.europa.eu/consumers/ecc/consumer_topics/air_travel_en.htm)

Good to keep in mind as the summer approaches...

Downloaded any goods recently? - consumer protection standards

The European Commission conducts regular sweeps - checking the enforcement's level of EU consumer protection measures by European websites. Last December a sweep was conducted to see whether websites selling digital consumer products (games, books, videos and music) are in compliance with EU legislation. The sweep that took place in the summer of 2012 showed that over half of the investigated websites (172 out of 330 checked websites) was not compliant with EU rules. (Q&A - Sweep on on-line games, books, videos and music) After that sweep, the authorities issued advice and warnings to websites that were potentially in breach of EU rules. As a result, the repeated sweep revealed that out of 172 previously non-compliant websites, 116 have been corrected. Altogether, 80% of the examined 330 websites is now compliant with EU consumer law. (Better protection for EU Consumers downloading games, e-books, videos and music) This means that consumers should be getting better information nowadays on products' attributes, should be informed fully and comprehensively on their rights (e.g., the fact that when the download starts consumers lose their right of withdrawal), on how to contact the sellers with their complaints, have been provided with fair contract terms. The conducted studies revealed also that consumers are still insufficiently informed about the following facts:

• that they are giving up their right of withdrawal with the start of a download (42% websites don't provide this information);
• that they have a right to take a legal action or claim compensation when the product doesn't work;
• how to contact the trader;
• that the product may have geographical restrictions that would make it impossible to use it abroad if consumers travel;
• that digital games that are advertised as 'free' could upon downloading and use still requirement certain payments being made.

The enforcement actions will continue to be conducted. It is especially relevant to increase children protection when purchasing digital goods, since they are often users of digital goods and are more vulnerable consumers, more prone to succumb to misleading commercial practices.

 

The European Commission advises consumers to think whether they have an answer to the following questions prior to making a purchase decision:

 

• Can you contact the trader in case there is a problem? Make sure that the trader provides his name, geographical and e-mail address.
• Do you have all the information you need about how to run the download? Check that you are given sufficient information and minimum operating system requirements of the product such as size, quality and whether a device or particular software is needed in order to operate the digital content product.
• How much is it really going to cost? Look out for the final price; including taxes and all charges that may be hidden in the last stages of the payment process.
• Do you have a right of return? Be aware that once you have started downloading the product, you have usually no right to return it.
• Are your rights being restricted? Beware of terms that exclude the trader from various liabilities and redress mechanisms including legal action; they are probably unfair.
• Where can you use the digital content? Look for information whether you can use the digital content in another country than the one you live in. You may get a nasty surprise if you are travelling or on holiday. Contact the sales office for advice, if you do not find the information.
• What is the real cost of the "free" kids game? There might be add-ons requiring payment without you being warned about it beforehand.

Digital Content Sweep

The European Commission just published the results of a 'sweep investigation' conducted on digital content. This EU-wide screening of websites led the Commission to conclude that about 75% of websites offering digital content (such as music, videos, e-books and games) are not fully complying with European consumer law. In particular, problems are found regarding unfair contract terms, the consumer's right to withdrawal and information on the trader's identity and address.

Please check the press release and Digital Content Sweep website for more information. On the legal framework for digital content contracts for consumers, see also our earlier post 'Reporting on digital content contracts'.

A year after EU action: from 30 to 75% of compliant websites offering consumer credits online

Last week the follow-up results of a Consumer Credit sweep from 2011 were made public. A 'sweep' is an exercise to enforce EU law. Under a supervision of EU institutions, national enforcement authorities conduct simultaneous, coordinated investigations - looking for breaches in consumer law in a particular sector. In case any irregularities are discovered, website operators are contacted and asked to correct them. In September 2011 it was time for examination of websites offering consumer credits to consumers. In total, 565 websites across 27 Member States, Norway and Iceland were checked. Unfortunately, at that time only 30% passed the test for compliance with the applicable EU consumer rules (e.g. regarding information duties, right of withdrawal). Out of the remaining websites: "A year later, 57 additional sites were finally considered to be compliant, 18 websites no longer exist, 194 websites were corrected following action by the national authorities and 124 websites are still the subject of administrative or legal proceedings in the countries concerned." (Buying consumer credit on-line: following EU action, over 75% of websites checked now give satisfactory information to clients) As a result of European intervention of the percentage of websites that comply with consumer protection rules has significantly increased, since only ca 23% of websites remain questioned as to their compliance. The main problems that were reported was missing information in consumer credit advertising (e.g. on the APR - annual percentage rate of change, or on standard information) or in the offer itself, as well as misleading presentation of the costs (e.g. type of interest rate, duration of the credit). See further here.

Sweep(ing) results

Any idea what are the costs of borrowing some money online? This is not supposed to be a trick question, but it turns out that some credit suppliers are making it more difficult for consumers to understand their conditions than others... This becomes clear when looking at the results of the EU investigation of consumer credit websites that the European Commission published today. The so-called 'Consumer Credit Sweep' took place in September 2011 and was carried out by national enforcement authorities who conducted simultaneous, coordinated checks for breaches in consumer credit law. The sweep operation focused on the way in which businesses apply the Consumer Credit Directive, as implemented in the laws of the Member States. In particular, it was investigated whether consumers received the information to which they are entitled under EU consumer law before signing a consumer credit contract.

A quick look at the results: No less than 70% of the 393 investigated websites were flagged for further investigation. The main topics of concern were:

- the advertising did not include the required standard information;

- the offers omitted key information that is essential for making a decision;

- the costs were presented in a misleading way.

As a follow-up to this Sweep, the European Commission indicates that '[n]ational enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. ... Failure to do so, depending on the national legislation which is applicable, can result in legal action leading to fines or even closure of the websites.'

A press release and Q&A page can be found on the Commission's website.

More news on the Digital Market, in the form of a Green Paper and Action Plan, is expected tomorrow (as announced last week).

Fancy going to a concert or a game? It's safer now to buy tickets online.

One week of holiday where I allowed myself not to check the internet and I now have quite a few news to catch up with and to report here about. 

What caught my attention first was a report on the EU "Sweep" investigation ("sweep" is an enforcement action led by the EU and carried out by national enforcement authorities) conducted as of September 2010 by national authorities of the Member States which checked for breach of EU consumer rules by websites selling tickets for cultural and sporting events (Buying on the internet: it's now safer for consumers to shop for tickets online following EU action). They were looking for websites that would give incomplete or misleading information to consumers (about the price of tickets, e.g. hidden charges or taxes; the trader, e.g. false claim of being an authorised representative; etc.) as well as for unfair terms and conditions (e.g. refund policy not explained or ticket delivery not guaranteed on time). The goal was to prevent sale of tickets to non-existent events, and make clear e.g. rules on the refund in case the event was cancelled. Owners of such websites were asked to correct the information provided (voluntarily or under penalties). The result of the Sweep is that nowadays 88% of websites (out of 414 websites checked) selling tickets comply with EU consumer laws (in comparison to 40% in 2010).

More information about this Sweep and its results may be found on this website: FAQ: Now safer to shop for tickets online following EU Sweep investigation.

Sweep investigation electronic goods

The ECJ today reported success as a result of the sweep investigation on the online sales of electronic goods (cameras, MP3 players, etc). The sweep, an enforcement action led by the EU and carried out by the national enforcement authorities, investigated the compliance of consumer rights by the major websites offering electronic goods online. While only 44% of the websites investigated complied with consumer rights in 2009, this figure has now climbed to 84%. Whether this has made buying electronic goods online "much safer" (as the Commission claims), remains to be seen.

The commission has also published the first results of another sweep, on online sales of tickets for cultural and sporting events.

Click here for more information.