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Increasing numbers of cross-border violations of consumers interests

The number of cross-border violations of regulations that harm consumers' interests is on the rise.  An increasing number of companies offer their services across borders, particularly via the internet, but this does not always take place in accordance with regulations. More and more cases - concerning SMS services, online ticket sales, telemarketing and sales pitches, involve international activities. For that reason, it is a positive thing that consumer authorities across Europe and around the world are working together in tackling companies who harm consumers' interests. The Netherlands Consumer Authority has therefore designated the international consumer as a priority area in its Agenda for 2010-2011.

The Netherlands Consumer Authority has taken on the role of the Presidency of the global network of consumer authorities ICPEN (International Consumer Protection and Enforcement Network) since 1 July 2010. More than forty countries have joined this network, such as the United States of America, Canada, Australia, China, Japan, South-Korea and Chile, as well as a large number of European countries. "In a world where the problems increasingly exist on an international scale, the way we tackle them needs to be that way too", states Bernadette Van Buchem, Director of the Netherlands Consumer Authority. "The organisations involved stand to learn a great deal from one another through cooperation and we will devote ourselves to this cause."

Unfair commercial practices online

The Netherlands Consumer Authority has used its half-yearly report to announce the progress of the Agenda for 2010-2011. The report showed that a great deal of energy was devoted during the first 6 months of 2010 to tackling misleading practices in relation to the resale of entry tickets for football matches, concerts and events. During the coming period, the Netherlands Consumer Authority will take enforcing action against companies that do not comply with the regulations. Within the Benelux region and Europe, the enforcement authority will take part in an investigation into the resale of entry tickets over the internet. The initial results of this investigation will be published later this year.

At the beginning of this year, the Netherlands Consumer Authority imposed a penalty on a company that offered photoshoots in a misleading and aggressive manner to young consumers in particular. Celldorado, a provider of SMS services, was also recently imposed with a penalty for misleading consumers.

The Netherlands Consumer Authority has observed that unfair and misleading practices on the internet are very dynamic in nature. After all, advertising material can be adjusted every day. "In addition to taking action against those who violate the regulations, it is still necessary to inform consumers about their rights", explains Van Buchem, "on the one hand because the practices and providers are always changing, while on the other hand new groups of consumers are always becoming active".

Aggressive and misleading canvassing

In March, the Netherlands Consumer Authority began a campaign to inform consumers about their rights when it comes to doorstep selling. The 'Deurwijzer' guide was developed as a resource, which can be downloaded at www.consuwijzer.nl or consumers can pick up a copy from one of the thirty branches of the Juridisch Loket [Legal Desk]. In addition, the Netherlands Consumer Authority has instigated investigations in cooperation with the Netherlands Competition Authority into potentially misleading and/or aggressive doorstep selling activities by energy companies.

Investigations are also underway into a number of providers of bus trips featuring sales pitches. The enforcement authority will publish the outcomes of these investigations later this year.

Most of the reports received by ConsuWijzer concern aggressive and/or misleading canvassing activities, particularly in the telecoms, energy, lotteries, SMS services and publishing sectors. From the point of view of the enforcement authority, these reports constitute important indications of such malpractice.

Guarantees and conformity

The Netherlands Consumer Authority has recently completed a number of investigations into the additional purchasing of guarantees. The results of these investigations will be published this autumn. The Netherlands Consumer Authority has taken part in an investigation within the Benelux into guarantees, from which it emerged that 10 Dutch companies had wrongfully restricted consumers'' rights under guarantees in a total of 1500 stores. These companies have since adapted their practices.

The computer companies Dynabyte, Paradigit and Computerland, who previously made promises to the enforcement authority that they would adhere to the regulations in relation to guarantees from now on, have been inspected in recent months in this regard. No violations were observed in the inspection.

The number of reports received by ConsuWijzer with regard to faulty products and guarantees is still quite high (more than 5000 in the first six months of this year), particularly concerning products in the domains of electronic equipment and computer stores, homeware, cars and mail order companies.

Rulings of the court

Earlier this year, the court ruled in favour of the Netherlands Consumer Authority in nine cases against providers of package holidays that did not offer proper guarantee provisions. These companies have the choice of either re-adjusting their guarantee provisions or ceasing to offer package holidays.

In order to enforce this ruling, the court has also imposed incremental penalties. Since then, almost all companies have put guarantee provisions in place.

In January of this year, Keukenkampioen and Keukenconcurrent appealed to the court to prevent details of the fines and incremental penalties being published, but the court ruled that publishing of these details was justified.

In February, the Court of Rotterdam issued a ruling in the appeal case brought by mail order company PostGarant that was previously fined for non-compliance with the regulations relating to sales over the internet and by telephone. The ruling of the court stated that the violations were largely upheld, but they were deemed to be less severe. Both PostGarant and the Netherlands Consumer Authority have lodged appeals to a higher court against this ruling.

The earlier decision of the Netherlands Consumer Authority to impose a fine upon UPC for violation of the regulations was upheld in the form of a ruling issued by the court in April.

ConsuWijzer

ConsuWijzer forms a very important source of indications of malpractice for the Netherlands Consumer Authority. The Netherlands Consumer Authority also uses ConsuWijzer to inform consumers with regard to their rights, such as where doorstep selling is concerned. With regard to the first six months of this year, the number of reports (2400) of issues with cancelling subscriptions was most striking. There is a considerable lack of clarity amongst consumers about this area, and this is also due to the introduction of new regulations. ConsuWijzer helps consumers by providing practical information and sample letters. 

Other matters

A legislative bill is being prepared that will permit the Netherlands Consumer Authority to take action against all violations of regulations using the system of fines and penalties of the Unfair Commercial Practices Act. The Netherlands Consumer Authority will be able to impose fines for violations of those regulations up to a maximum of 450,000 euros per violation. With regard to other violations, the Netherlands Consumer Authority is still imposing fines of 76,000 euros per violation. It has also been announced that the Netherlands Consumer Authority is to be assigned binding powers, enabling it to instruct a company to adopt a specific line of conduct. These powers may be used prior to instituting an official sanction. The purpose of this is to accelerate the process of adapting practices in order to avoid a situation in which consumers are being duped for longer than necessary. The Netherlands Consumer Authority is currently investigating whether the proposed new regulations are feasible to enforce.