Did you know that when performing cross-border purchases online your rights are as protected as when you are shopping in your favourite supermarket? However, prior to purchasing your selected commodity in the global web it is advisable to make sure that the deal is secure as well as it is always advisable to know your rights how to act in case the trader does not respect the consumer’s rights.
A contract that is concluded online differs from a purchase contract that has been made in a ‘traditional’ manner by the fact that it is made in the electronic environment. Taking into consideration the specifics of this type of deal, in order to protect the ‘weaker’ of the contract parties, the European Union legislation provides special protection particularly to the consumer.
Laws and regulations
To the distance contracts that have been made after June 13, 2014 the provisions of Directive 2011/83/EU of the European Parliament and of the Council (25 October 2011) on consumer rights (Consumer Rights Directive) are applicable. The said directive replaces the previous Directive of the European Parliament and of the Council 97/7/EC from May 20, 1997 on the consumer protection regarding the distant contracts. The Consumer Rights Directive provides a joined totality of key regulation in respect of distant contracts and the contracts that are negotiated away from the business premises. The directive also determines requirements regarding providing the information prior to entering a contract that are applied to all kinds of the contracts (that are not distant contracts or contracts the contracts that are negotiated away from the business premises).
In contradiction to the previous Directive 97/7/EC that provided the minimum legal regulation level, the Consumer Rights Directive provides full harmonisation level – the directive provides a joined totality of key provisions regarding the distance contracts and the Member States do not keep in force and do not introduce any regulation in their normative acts that differ from the directive unless the directive does not provide otherwise.
In Latvia, the regulations of the Consumer Rights Directive regarding distance trade are transposed into the Consumer Rights Protection Law as well as into The Regulations No 255 issued by the Cabinet of Ministers “Regulations on a distance contract”.
When conducting a purchase online a distance contract is concluded which is understood as any sales contract concluded between the trader and the consumer under an organised distance sales or service-provision scheme, with the exclusive use of one or more means of distance communication (such as mail order, Internet, telephone or fax).
It should be taken into consideration that one of the characteristics of a distance contract is that the contract is made between a trader and a consumer. In the opinion of the Consumer Rights Directive ‘consumer’ means any natural person who has made an online purchase for purposes which are outside his trade, business, craft or profession. Whereas ‘trader’ means any natural person or any legal person who trades online for purposes relating to his/her trade, business, craft or profession.
Taking the aforesaid into consideration the regulation of the Consumer Rights Directive shall not be applied to trade contracts that are concluded between two consumers or two natural persons.
Always be careful when purchasing on such popular websites as online auction eBay where the seller of the commodity may be a natural person who does not conduct the trade within the framework of commercial activity.
The Consumer Rights Directive regulates certain aspects of distant contracts that are concluded between traders and consumers yet, considering that regarding certain sectors the European Union legislation already contain provisions regarding consumer protection, the directive does not apply particular types of contracts. The main exceptions:
- Package travel services;
- Contracts on timeshare usage rights;
- Services of passenger transportations. However prohibition to use prior checked in boxes in the website as well as provisions against applying extra pay for use of a credit card (or any other means of payment) or hidden costs concern also the passenger transportation contracts.
- For the supply of foodstuffs, beverages or other goods intended for current consumption in the household, and which are physically supplied by a trader on frequent and regular rounds to the consumer’s home, residence or workplace.
- For financial services.
The directive does not apply to the following contracts either:
- For the creation, acquisition or transfer of immovable property or of rights in immovable property.
- For the construction of new buildings, the substantial conversion of existing buildings and for rental of accommodation for residential purposes. Although the Directive is not applicable to the rent of residential premises it is applicable to the rent of non-residential premises.
- To contracts that concluded by means of automatic vending machines or automated commercial premises. For instance, automatized fuel stations where the contract is made without physical presence of the trader.
- To contracts concluded with telecommunications operators through public payphones for their use or concluded for the use of one single connection by telephone, Internet or fax established by a consumer. For instance, contracts that are made with the electronic communication operators by employing payphones to enter the contracts.
- To contracts concluded with notaries or other persons regarded as public officials.
- For social services.
- For health care services.
- For gambling.
Prior executing a purchase
Prior to the decision to conduct a purchase in a certain online shop carefully familiarise yourself with the placed on the website information. It is essential that the information were freely available and you are clear about the trader’s identity which to address in case of any irregularities.
The main information that the trader must provide on the website:
- The identity of the trader for instance the trading name thereof.
- The geographical address at which he is established and his telephone number, fax number and e-mail address if such exists so that the consumer may quickly contact the trader and efficiently communicate to him.
- The main characteristics of the goods or services.
- The total price of the goods or services inclusive of taxes.
- Arrangements for payment, delivery, performance, the time by which the trader undertakes to deliver the goods or to perform the service, and the trader’s complaint handling policy.
Information on the withdrawal rights:
- In case the withdrawal right are applied – condition, term and procedure of using thereof.
- Form of withdrawal.
- Information regarding the fact that in case of withdrawal the costs related to returning the goods are covered by the consumer. As well as the information regarding the costs of returning such goods that cannot be returned by mail. For instance concerning voluminous goods – furniture, fridges, washing machines etc.
- In case no withdrawal rights are applied – the information regarding non-existence of such.
Other information that must be provided on the website:
- A reminder of the existence of a legal guarantee of conformity for goods – according to the EU legislation the trader is responsible for nonconformity of goods that becomes apparent within two years from the date of delivery of the goods.
- The existence and the conditions of after-sales services and commercial guarantees, where applicable.
- The duration of the contract, where applicable, or, if the contract is of indeterminate duration or is to be extended automatically, the conditions for terminating the contract.
- Information on the minimum duration of the consumer’s obligations – the minimum period for which the consumer must perform a payment in according the offered by the trader provisions and conditions,
- Information on existence of a code f conduct.
- Information on options of out-of-court examination of disputes.
Requirement to inform regarding the products of digital content (data that has been created and delivered in digital form for instance computer software, games, music, video or texts):
- Functionality of the digital content;
- Compatibility with hardware and software.
The trader shall provide the consumer with the confirmation of the contract concluded, on a durable medium within a reasonable time after the conclusion of the distance contract, and at the latest at the time of the delivery of the goods or before the performance of the service begins. Such confirmations have to be made on a durable medium for example in an e-mail.
Such confirmation shall include: all the prior-to-contract information unless the trader has already provided that information to the consumer on a durable medium (or in form that allows the consumer to save the information) prior to the conclusion of the distance contract.
In case products with digital content are purchased – the order confirmation shall include the information that the consumer agrees to immediate execution of the contract and confirms that he or she will lose the withdrawal rights as soon as the downloading or streaming of the digital content has been started.
Delivery of goods
Unless the trader has on the website indicated different term of delivery the trader shall deliver the goods by transferring the physical possession or control of the goods to the consumer without undue delay, but not later than 30 days from the conclusion of the contract.
In case the goods are not delivered within the period of 30 days or any other indicated to the consumer term, the consumer shall agree with the trader upon prolongation of the delivery term. Where the trader has not executed the delivery by the end of the prolonged term either, the consumer has rights to terminate the contract.
However, where the provided delivery term or the term of 30 days is essential (and the consumer has notified the trader thereof) and the trader fails to deliver the good in due time, the consumer should be entitled to terminate the contract right after expiry of the initially confirmed term. For instance, a wedding dress should be delivered prior to the wedding date.
Upon termination of the contract, the trader shall reimburse to the consumer all sums paid under the contract.
The consumer may face situation where the delivered commodity is damaged during the delivery process. It is important to know that the trader is responsible for the commodity by the moment it is transferred in physical possession of the consumer (except the cases when the consumer was the party choosing the deliverer).
Always remember to check the commodity right at the moment of receipt!
Unlike purchasing in presence when the consumer can familiarise him/herself with the commodity at the trade site, to try it on (when clothing or footwear is purchased), when purchasing online the consumer does not have such an opportunity thereby the European Union legislation provides that after receiving the goods the consumer is entitled to use the rights of withdrawal.
Rights to withdrawal are the consumer’s rights within a certain term unilaterally withdraw from the contract without providing any grounds for doing that.
Along with introduction of the Consumer Rights Directive into the national legislation of the Member States, the contracts that have been concluded after June 13, 2014 are applied a 14 day withdrawal period that is united in all the Member States of the European Union.
However, in case the trader has failed providing information regarding the withdrawal rights the period of the withdrawal rights is extended up to by a year.
The withdrawal period is counted from the date when the consumer has acquired the commodity in his/her physical possession whereas regarding the service contracts – from the date of concluding the contract.
What should be respected during the period of the withdrawal rights
When receiving a commodity the consumer is entitled only to try it in order to verify the type, qualities and operation of the commodity not to fully use it. The commodity is allowed to be tried just like it were being purchased in presence in a trade site. For instance, when buying clothing the consumer should be trying it on but he or she would not be permitted to be wearing it.
How to exercise the withdrawal rights:
- In case after trial of the commodity the consumer decides to withdraw from the contract, the consumer shall inform the trader of his/her decision to withdraw from the contract. For this purpose, the consumer may either use the available on the trader’s website model of withdrawal or present any other unmistakable statement where the decision to withdraw has been explicated. In order to observe the period of the withdrawal rights the refusal must be sent prior to expiry of the 14 day period. As in case of exercising of the withdrawal rights the burden of proof is put on the consumer, it is always advisable to inform the trader in writing by saving a copy of the sent e-mail or a receipt of dispatching a regular letter.
- After the consumer has notified the trader on refusal of the commodity, the consumer is obliged to send the commodity back to the trader within 14 days from the date of sending the refusal. When returning the commodity to the trader it is the consumer’s obligation to cover the costs caused by returning the commodity unless the trader has agreed to cover these costs or if the trader has failed informing the consumer that it is consumer who shall cover these costs.
Obligations of the trader in the event of withdrawal:
- The trader shall reimburse all payments received from the consumer, including, if applicable, the costs of delivery without undue delay and in any event not later than 14 days from the day on which he is informed of the consumer’s decision to withdraw from the contract.
- The trader may withhold the reimbursement until he has received the goods back, or until the consumer has supplied evidence of having sent back the goods, whichever is the earliest. Where the good or the evidence of sending back is received after expiry of the 14 day period, the trader shall reimburse the consumer’s payment without any undue delay.
It should be taken in consideration that not in all cases the consumer will not be entitled to refuse a bought online commodity or service. The withdrawal rights are not applicable to certain commodity groups and services or these rights may be lost in certain circumstances.
The main exceptions from the right of withdrawal:
- Services with a specific date and term of execution. For instance:
- Car rental services;
- Hotel or holiday home reservation, booking for culture or sport events;
- Theatre performance particular date or catering services for a birthday or wedding celebration that takes place on particular date;
- Rent of non-residential premises;
- Transport of goods;
- Public catering.
- Supply of goods which are liable to deteriorate or expire rapidly. For instance food and beverages that have short expire term including the products that should be stored in a cool place.
- Supply of sealed goods which are not suitable for return due to health protection or hygiene reasons and were unsealed after delivery. For instance if the consumer has opened a delivered package of cosmetic goods such as lipstick.
- Withdrawal rights are not applicable to the supply of sealed audio or sealed video recordings or sealed computer software (CD, DVD etc.) which were unsealed after delivery;
– Supply of a newspaper, periodical or magazine with the exception of subscription contracts for the supply of such publications.
Other exceptions to the withdrawal rights:
- Supply of such goods that have been manufactured according the consumer’s specifications or are unmistakably personalised. By which a commodity is meant that has not been manufactured before and which has been manufactured on the basis of an individual choice or decision of the consumer. For instance, curtains made according to the order.
- Supply of such goods that after the delivery due to their nature have been inseparably mixed to other items, for instance, fuel.
- Supply of such commodities or services the price of which depends on the fluctuations in the financial market and that the trader cannot control and that may occur within the withdrawal term.
- Contracts that have been entered on a public auction. Whereas online auctions that may not be attended in person are not considered public auctions therefore the withdrawal rights are applicable to the online auctions (provided the consumer has purchased the goods from a trader that trades online for purposes relating to his trade, business, craft or profession).
- Contracts where the consumer has specifically requested a visit from the trader for the purpose of carrying out urgent repairs or maintenance.
- In respect to service contracts the consumer loses the withdrawal rights after the service has been fully performed if the performance has begun with the consumer’s prior expressed consent, and with the acknowledgement that he will lose his right of withdrawal once the contract has been fully performed by the trader.
Products of digital content:
- The consumer losses the withdrawal rights in respect to the products of digital content (which is not supplied on a tangible medium) once the performance has begun with the consumer’s prior expressed consent (for instance downloading or streaming of an audio or video file has been started) and his acknowledgment that he thereby loses his right of withdrawal.
Unsolicited supply of goods
In cases a consumer receives from a trader goods he or she has never ordered to the trader, no kind of contractual commitments exist between the parties, therefore the consumer has no obligation to pay for such goods. The consumer is exempt of any liability to reimburse for delivery of such unsolicited goods. Also in cases where the consumer does not react to delivery of such unsolicited goods it does not mean approval.
In accordance with the normative acts of the European Union the trader is not permitted to require immediate or delayed payment for delivered by the trader products the consumer has not ordered.
What to do in case the consumer has received unsolicited commodity:
- Although the consumer is not liable for the received commodity, the consumer shall treat the received commodity with care as well as the consumer may not start using it as in certain Member States use of a commodity may mean approval of a contract.
- The consumer shall notify the trader on the received commodity.
- In case the trader wishes that the received commodity was sent back to the trader, the trader shall ensure return of the commodity without causing any extra expenses to the consumer.
- In case the consumer volunteers to return the commodity the trader it is always advisable to keep the postal receipt.
What to do in case a non-conforming to the contract commodity has been purchased online
In case after receiving a commodity a defect to the purchased commodity becomes apparent that has not been caused because of the consumer’s fault (a non-conforming to the contract commodity has been purchased), the consumer’s rights are determined in accordance with the Directive 1999/44/EC of the European Parliament and of the Council from May 25, 1999. The consumer’s rights are the same regardless the fact the commodity was purchased online or on the spot in a trade site.
According to the directive the trader is responsible for non-conformity of a commodity that becomes apparent within at least two years from the date of delivery of the commodity.
More information regarding the consumer’s rights when purchasing a non-conforming to the contract commodity is available in this section:
Advice so to avoid fraudulent online traders
- Always verify the identity of the deal partner and check the previous references regarding the trader. In case the trader has been continuously operating in fraudulent purposes, usually poor references will be available online.
- Check what kind of information the trader has provided in the certain website. According to the legislation of the European Union the trader must provide quite a range of information prior to concluding a contract. Never purchase from a trader the identity of which cannot be detected.
- Make sure that the online store has been awarded any trust mark. One of the characteristics of the trust marks (known also as quality marks) – they are placed on the website as electronic labels. Most often the purpose thereof is to inform that a certain code of conduct is respected so that a visitor of the website may be sure that the particular store may be trusted. More information regarding the trust marks is available in the ECC-NET report on the online trust marks: http://ecclatvia.lv/en/publications/ecc-net-projects/552-trust-mark
- Try to avoid any advance payments.
- Do not transfer any money to private accounts. Avoid also transactions to unknown natural persons by using such money transfer systems as WesternUnion or MoneyGram as in case of problems the possibilities to retrieve the money will be very restricted, which is the main reason why such payment systems are used by fraudulent traders. Such money transfer services are appropriate when transferring money to a familiar person not for online deals.
More information regarding cases of fraud when purchasing online is available in the ECC-NET report on online fraud: http://ecclatvia.lv/en/publications/ecc-net-projects/553-fraud-internet
Take into consideration that the competency of ECC-NET is limited in cases of fraud as ECC-NET may provide assistance only in respect of existing traders where the normative acts in the sector of the consumer rights have not been observed.
What to do in case of problems
- When facing issues always notify the particular trader thereon. If the trader cares for its reputation, the problem will most likely be solved without involvement of other institutions in resolution of the dispute.
- In case after sending a written complaint the trader fail solving the problem or does not reply to the sent complaint, seek for help at ECC Latvia. ECC Latvia may provide assistance in solving a complaint only in case the trader that trades on the particular website is registered in any of the Member States of the European Union, Norway or Island.
A complaint to ECC Latvia can be submitted by filling in a cross-border complaint form:
- Where the particular trader is not registered any of the Member States of the European Union, Norway or Island as one of the solutions is submission of a complaint into the portal of cross-border consumer dispute resolution econsumer.gov (http://www.econsumer.gov) (only in case where the respective country is a participant of the portal).
econsumer.gov is a network of resolution of online disputes that have been developed on an international level. The portal was developed in 2001 in order to reduce the international fraudulence and enhance the consumers’ trust in the online purchasing. Initially the portal was made by 13 countries but currently 24 countries have participated in it including Latvia. Two components are at the foundation of the project – an international website and access of the particular institution to the website. The publicly accessible website allows a consumer to enter his/her cross-border complaint that through the data base of the consumers’ complaints of the US Federal Trade Commission is sent to the authority of that country that participates in the project.
- Whereas if the negotiations with the trader via out-of-court dispute resolution process does not lead to agreement of voluntary execution of the consumer’s claim, the consumer may bring an action before court in accordance with the European procedure of claim for small amounts. More detailed information regarding the European procedure of claims for small amount is available in this section: http://ecclatvia.lv/en/facts-advices/european-small-claims-procedure
Purchasing outside the European Union
Remember that when ordering goods from an online store that is registered in third countries (outside the European Union) additional costs may occur when the goods cross the borderline of Latvia.
For commercial consignments the value of which exceeds 22 EUR, value added tax is to be paid (21%) and furthermore, if the value of a commercial consignment exceeds 150 EUR also the custom tax is to be paid. More information available on the website of the State Revenue Service: