Consumer Authority: Grando Retail adjusts commercial practice

It appeared that Grando Retail, a member of the Central Association for the Interiors Sector [Centrale Branchevereniging Wonen, CBW] and a franchise chain of independent kitchen businesses with around 47 showrooms in the Netherlands, had been acting in a manner that contravened the sector rules of the CBW in relation to requesting deposits from customers. Companies that subscribe to a sector code or code of conduct must act in accordance with the rules prescribed by the code and failure to do so may lead to action by the Consumer Authority on the basis of the Unfair Commercial Practices Act [Wet Oneerlijke Handelspraktijken, OHP]. This case is the first occasion that the Consumer Authority has exercised its powers under the act. Initially, Grando Retail vowed to the Consumer Authority that it would ensure that the sector rules were rigorously observed, including on matters relating to deposits.

Marije Hulshof, Director of the Consumer Authority explains: "Subscribing to a sector code or carrying a hallmark is not free of obligations. A consumer must be able to feel confident that a company that carries a logo or hallmark is providing an additional benefit. If that is not the case, then we have the powers to take action." Investigations into a number of kitchen companies are still ongoing.

CBW Sector rules

The stipulations of the CBW require that the retailer may not request a deposit percentage from the customer that exceeds 15% of the purchase price of the kitchen. The remainder of the invoice amount must be settled by the customer on delivery. Investigations by the Consumer Authority indicate that customers of many of the companies involved had to pay a higher percentage when concluding the agreement, and in addition, all companies required the total purchase amount to be settled prior to the kitchen actually being delivered. This is contrary to the CBW stipulations and with the law, and can have serious consequences for the consumer. For example, in the event of a CBW member company going into liquidation, only the deposit percentage of 15% is guaranteed.

Grando Retail has acknowledged that in the past, its kitchen businesses did not act in accordance with the CBW rules with regard to the payment of deposits. As Grando Retail wishes to put the interests of the consumer at the very forefront, it has made a promise to the Consumer Authority that the deposit percentage requested will always be limited to a maximum of 15% of the purchase amount, and that the full purchase amount must be settled on delivery at the very latest and not in advance. The Consumer Authority will be monitoring compliance with these rules, which will include keeping track of the number of complaints received by ConsuWijzer.