The UK’s decision to withdraw from the EU has an effect on consumer protection and on the rights afforded to consumers. On 1 January 2021, the transition period, which required the UK to comply with EU consumer protection rules, ended. Despite the completion of the EU-UK Trade and Cooperation Agreement (TCA), UK consumer protection rules will, to an extent, diverge from EU consumer protection rules.
A considerable proportion of UK legislation on consumer protection is derived from the EU, and the UK is expected to retain the majority of EU consumer protection rules. These include rules on product safety, unfair practices, misleading marketing practices and food safety. Despite this, there will be a difference in consumer rights and protection.
Consumer protection is the practice of protecting the public and individual consumers from unfair commercial practices including false advertising, unfair contract clauses and other unjust practices. The EU’s Unfair Commercial Practises Directive outlines these unjust practises and provides Member States with a way to restrict them. At the core of consumer protection is the principle of consumer rights.
Commercial enterprises in the European Union are subject to the Consumer Rights Directive (CRD) – a set of rules regulating contracts between consumers and traders or enterprises. The CRD provides EU consumers with increased protection when engaging in contractual transactions. Distance (online) contracts, off-premises contracts and on-premises contracts are covered by the CRD.
Shopping & the Consumer Rights Directive (CRD):
An important area for consumer protection is shopping, particularly online shopping. Currently, EU consumers are protected when shopping by several directives, including the Consumer Rights Directive (CRD). Introduced in 2014, the CRD harmonises consumer rules in the EU, affording consumers increased protection and promoting consumer confidence.
One example of this is the ability to returnorders within 14 days of delivery. This is termed the ‘right to a refund’. Other rights include the ‘right to change your mind’, the ‘right to clear information’ and the ‘right to redress for faulty goods’. Collectively, these rights protect EU consumers by preventing unfair commercial practices and providing customers with recourse to redress, that is, remedy or compensation.
If the company is based in an EU Member State, then the CRD’s consumer protection rights will apply. If the company is based in the UK, then the CRD’s consumer protection rights may not apply.
In Ireland and the rest of the EU, protections outlined in the CRD will continue to apply for consumers shopping in-store from UK-owned companies, for example, a UK electrical retailer with stores in Ireland.
Disputes & the European Consumer Centre (ECC):
The European Consumer Centre (ECC) Ireland offers Irish consumers advice and assistance in solving consumer disputes with companies based in other EU Member States and in the UK.
In terms of dispute resolution, redress options for purchases from UK companies with a registered presence in Ireland remain unchanged. In other words, provided that a company has a presence in Ireland, Irish consumers will be able to avail of existing EU dispute resolution mechanisms.
One recourse option available to consumers is Alternative Dispute Resolution (ADR). ADR refers to a wide-range of dispute resolution processes that involve out-of-court resolution. In ADR, authorised ADR bodies mediate between the consumer and the company in question. While ADR is a process practiced globally, the purpose of EU legislation on ADR is to facilitate the out-of-court resolution of consumer disputes involving a European company or consumer.
In Ireland, ADR bodies are authorised by the Competition and Consumer Protection Commission (CCPC). The European Commission has a list of EU ADR bodies.
Online Dispute Resolution (ODR) is an ADR process for online purchases. The ODR platform is a free online tool that enables consumers to forward complaints to traders and to discuss solutions to resolution. A further option is the European Small Claims Procedure, which provides consumers throughout the EU with a uniform debt recovery process for low-value claims.
The UK’s withdrawal from the EU means that these measures have ceased to apply to purchases from UK-based companies. While the ECC will assist Irish customers with UK-related consumer disputes, recourse options will be limited.
Ireland’s Competition and Consumer Protection Commission (CCPC) has stated that courts in EU Member States will continue to apply EU consumer protection rules even in instances in which the trader is based in the UK. Under EU law, if a consumer concludes a contract with a trader based in a different country and is able to prove that the trader directs their commercial activity in the consumer’s EU Member State, then the law of the Member State where the consumer resides is applicable.
Taxation & Charges:
From 1 January 2021 items purchased online from UK retailers may be liable to VAT, customs charges and excise charges, depending on the type and price of the item purchased. It is important for consumers to be aware that only items that satisfy rules of origin standards will be tariff-free, that is not subject to customs and excise charges.
Items including tobacco products, alcohol products and perfumes will incur VAT regardless of the price of purchase.
In general terms, purchases over €22 may incur VAT charges, while purchases over €150 that do not qualify for tariff-free status will incur customs duty charges. It is important to note that these arrangements will change with the introduction of the EU VAT e-Commerce Package in July. From 1 July 2021, all items entering the EU may incur import VAT, regardless of price of purchase. The primary purpose of the Directive is to simplify VAT obligations on e-Commerce.
Under Article 8 of the Northern Ireland Protocol, Northern Ireland will follow EU VAT rules for goods but will follow different VAT rules for services.
Travel & Package Holidays:
With regards to travel, EU legislation ensures that consumer rights apply to package holidays, this is outlined in the Package Travel Directive. If a consumer purchases a package holiday from an operator in the EU, then rights – including insolvency protection, compensation for damages and cancellation – apply. If a consumer purchases a package holiday from an operator outside of the EU, then these rights may not apply.
Current consumer protection rights for package holidays are expected to remain enshrined in UK law. In other words, UK-based operators are expected to hold to similar consumer rights protections for package holidays as EU-based operators. Despite this, it is important for EU consumers to verify arrangements with UK-based operators regarding issues including insolvency, cancellations and alterations.
One example of consistency in terms of consumer protection relates to passenger rights. The 2018 Withdrawal Act enshrined certain elements of EU law in UK law including Regulation (EC) No 261/2004 on air passenger rights. This effectively ensures that passengers on UK-based airlines will have access to similar passenger rights with respect to airline delays and cancellations as passengers on EU-based airlines.
In addition, the European Commission has confirmed that current consumer rights protections will apply for package holidays purchased from UK-based operators that market in EU member states – if a UK based operator markets a package holiday in Ireland, EU consumer rights protections apply.
Connected to travel is consumer protection in terms of telecommunications. Roaming fees in the EU were abolished in 2017, allowing consumers to pay identical call and text prices in different EU Member States. This initiative was termed the ‘Roam Like at Home’ (RLAH) initiative.
According to Comreg, from 1 January 2021, RLAH roaming arrangements will cease to apply for individuals visiting the UK. Mobile operators in Ireland including Three, Eir and Vodafone have, however, indicated that there will be no return to roaming charges for customers travelling to the UK after Brexit.
Medication & the European Medicines Agency (EMA):
One important area of consumer protection, particularly in the current climate, concerns medication. The UK’s withdrawal from the EU has no impact on the quality of medication available to Irish consumers. In the EU, the evaluation of medicines is centralised through the European Medicines Agency (EMA). In that regard, relevant EU legislation includes Directive 2001/83/EC and Regulation (EC) No 726/2004. The former outlines rules and regulations for medicinal products intended for human use, while the latter outlines procedures for the authorisation and supervision of medicinal products for human use.
Where We Stand
Understanding EU consumer protection rules is important for commercial enterprises and individual consumers. Consumer rights ensure that consumers are protected when purchasing items online and in person. In the EU, consumer rights cover everything from the right to a refund to the right to information. In addition to protecting consumers, consumer rights install consumer confidence, this is important for enterprise, particularly in periods of economic uncertainty.
While the UK’s post-Brexit consumer rights legislation is generally expected to remain in-line with EU consumer rights legislation, consumers will have reduced dispute resolution options. It is therefore important for consumers purchasing from UK-based companies to be familiar with company policy on returns.