Netherlands Consumer Authority Annual Report 2008: resilient consumers form the most effective way to ensure fair trading
The Consumer Authority is to take action against companies in the electronics sector that provide consumers with incorrect information about warranties that can be bought in addition to the item purchased or extended warranties that consumers can take out when making their purchase. The Consumer Authority made a statement to this effect at the meeting during which it presented its 2008 annual report. An investigation by the Consumer Authority into (extended) warranty or warranty that can be bought in addition to the item purchased have revealed that this product does not often provide more or does not provide a great deal more than the statutory rights that the consumer already has. Warranties that are bought in addition to the item purchased may however give rise to less discussion for the consumer if he/she is demanding a solution from the salesperson that is free of charge should a fault occur to the product after the manufacturer's warranty has expired. Marije Hulshof, Director of the Consumer Authority, explains: "It has emerged that consumers who pay for an additional warranty are paying a great deal of money for rights that they already enjoy in the form of statutory rights. The role of the Consumer Authority is to uphold fair trading between companies and consumers. We take action against companies that fail to comply with the rules and regulations. In addition, we will continue to do everything within our power to make consumers more resilient by means of our ConsuWijzer information desk. Consumers who know their rights are the most effective way to ensure fair trading."
Investigation into the additional purchase of warranties
The Consumer Authority has carried out an investigation into buying additional warranty in the electronics sector, involving six companies that together have over 180 branches. This investigation revealed that in practice, the additional purchase of warranty does not offer many additional extras, over and above a consumer's statutory rights. The companies actively offer the opportunity to purchase additional warranty in the sales discussion. In this discussion, the consumer is not always informed in full and correctly about what the additional warranty offers compared to the warranty rights that the consumer already has. The consequence of this may be that consumers decide to purchase an additional warranty such as this on false grounds. The sales that the companies studied achieved with the additional warranty were over EUR 36,000,000 in 2007 and 2008. On average, an additional warranty costs EUR 62.00. The Consumer Authority suspects that when this product is being sold, incorrect and/or incomplete or misleading information is being provided. This may constitute a violation of the Unfair Commercial Practices Act [Wet OHP]. The Consumer Authority will take enforcement action when establishing a violation.
The Consumer Authority in 2008
In 2008, the Consumer Authority imposed five penalties for a total amount of EUR 658,000. In addition, commitments were agreed with two companies to bring their behaviour in line with the law. In 2008, the enforcement authority completed 160 national and 51 international investigations. Marije Hulshof explains: "We are still observing many violations of the rules and regulations. Often the company will put its house in order following a warning by the enforcement authority, but sometimes further action is required in order to achieve this. If this happens, we will not hesitate to use our powers."
In 2008, over 90,000 individual recommendations were issued to consumers via ConsuWijzer, the information desk for consumers, about their rights. The website has been visited over 1 million times. Marije Hulshof explains: "It is just as necessary as ever to work towards making consumers resilient. On the one hand, this serves to ensure that businesses fulfil their obligations. On the other hand, it is important that consumers know their rights and also actively exercise their rights. The Consumer Authority will continue to use ConsuWijzer as a means of keeping abreast of developments in order to be able to take action against the most flagrant transgressors."