Lords fear UK consumers may suffer under new EU proposals

15 July 2009

The House of Lords EU Committee have today warned the Government against agreeing to the European Commission’s Consumer Rights Directive, calling for further progress to await a more complete assessment of the likely impact

The Committee are particularly concerned that consumers could lose key rights, such as the right to reject faulty goods and choose whether they want a refund or repair. They are also highly critical of the two year limit on a trader’s responsibility for repairing or replacing faulty goods. The Committee thought this could be problematic because some goods, such as boilers, cars, and double glazing should be expected to last longer. Consumer groups questioned whether businesses would continue to produce hardwearing goods if they knew they would only be responsible for problems occurring within two years.

While they recognise the need to update existing EU consumer law, the Committee question the ability of the proposal as drafted to deliver the Commission’s desired increase to cross-border trade. They point to other barriers such as culture, language and cost and distance of delivery which may also play a part.

Importantly, the Committee are not calling for the proposal to be scrapped, recognising that if got right, it could deliver a range of benefits to business and consumers alike. This includes a large reduction in costs for businesses based in one EU country wishing to sell their goods to consumers in other EU countries.

The Committee largely support the provisions on information in this Directive and agree that there is no such thing as an over-informed consumer. In line with this, they are concerned that the Directive could reduce the level of information provided to consumers buying financial services and therefore recommend that these services should not be affected by this Directive.

Other recommendations in the report include:

  • The Directive should be expanded to include digital products, for example music downloaded online.
  • The Directive should also be expanded to cover pure services and purchases containing both goods and services, such as a mobile phone with airtime.
  • The Commission should reconsider its position that Hire Purchase is excluded from the provisions in the Directive.

Commenting Baroness Howarth, Chairman of the House of Lords EU Sub-Committee on Social Policy and Consumer Affairs, said:

"We support the European Commission’s desire to update the Directives on consumer rights for the benefit of both consumers and businesses. We feel however that this is not something that should be rushed and therefore consider that the Government should not agree to the Directive until it is clear that it will deliver on these aims.

"We think it is vital that consumers throughout the EU do not lose their existing rights. In the UK we are keen to protect the right to reject and the trader’s existing six-year liability for faulty goods.

"Finally we feel the Commission may be overly optimistic about the impact the Directive will have on cross-border trade. It is probably barriers of language and culture rather than regulation that mean most of us will continue to purchase the majority of our goods and services within our own national borders."

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