Consumer Rights Bill 2022 released

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The Irish government published the Consumer Rights Bill 2022 on April 22, 2022.

The Bill, when it comes into force, will make significant changes to consumer protection laws in Ireland and bring them more closely into line with EU rules. It will create clearer rules for businesses, but introduce new obligations for merchants who sell to consumers. It will also strengthen consumer remedies and increase penalties for merchants who break the law.

Minister of State for Consumer Protection Legislation Robert Troy TD has previously described it as “the biggest overhaul of consumer rights legislation in 40 years… modernizes and consolidates existing consumer protection legislation and significantly strengthens the enforcement powers of [Irish] agencies responsible for guaranteeing consumer rights…”

The Consumer Rights Bill 2022, when it comes into force, will implement each of the following EU directives:

  • The Digital Content Directive
  • The revised directive on the sale of goods, and
  • The Omnibus Directive (or “Modernization and Enforcement”) which itself modifies:
  • Unfair Contract Terms Directive
  • Unfair Commercial Practices Directive
  • Consumer Rights Directive
  • Price Indication Directive

While the Omnibus Directive updates and strengthens four existing consumer protection laws, the combined effect of these legal changes is that merchants will have to comply with six strengthened or new laws, depending on the goods or services the merchant sells, and whether they are online and/or offline.

The most significant effect of the Omnibus Directive, and therefore of the Consumer Rights Bill 2022, is the increase in enforcement powers. These powers include increased penalties for widespread breaches of the law of up to 4% of turnover in the Member State or Member States concerned, or up to €2 million.

Overview of changes made by the Consumer Rights Bill 2022

We outline the changes to Irish consumer law proposed by each part of the bill.

part of the bill

Implements/Affects

Part 1 – Preliminary

Part 2 – Sales contracts

Directive 2019/771 – the revised Sales of Goods Directive

Part 3 – Digital Content Agreements and Digital Services Agreements

Directive 2019/770 – the Digital Content Directive

Part 4 – Service contracts

Amends Part IV of the Sale of Goods and Supply of Services (Non-Digital, Consumer Services) Act 1980

Part 5 – Consumer information and right of withdrawal

Replaces the Consumer (Information and Cancellation Rights) Regulations 2013 (SI 484 of 2013) and implements updates to the Omnibus Directive

Part 6 – Unfair terms in consumer contracts

(& list in appendix 5)

Replaces Unfair Contract Terms Regulations (SI 27 of 1995) and amends Omnibus Directive updates

Part 7 – Procedures and Sanctions

Regarding offenses, prosecuting authorities, fines and provisions of the CPA (updates for the Omnibus directive)

Part 8 – Amendment to the Consumer Credit Act 1995

Important additions to the Hire-to-Consumer Contracts Act 1995

Part 9 – Amendment to the Consumer Protection Act 2007

Regarding the Unfair Commercial Practices Directive and implements updates to the Omnibus Directive

Parts 10 to 12 – Amendments to the Central Bank Act 1942, the Communications Regulation Act 2002 and the Competition and Consumer Protection Act 2014

Mainly technical amendments to refer to the Consumer Rights Bill 2022

Part 13 – Minor and Consequential Amendments (and Schedule 6)

Amends the Sale of Goods Acts 1893 and 1980 and SI 14 of 2020 regarding fines

The Consumer Rights Bill will repeal several existing pieces of Irish legislation, including:

  • Parts of the Sale of Goods and Supply of Services Acts 1893 and 1980
  • Part of the Package Holidays and Travel Trade Act 1995
  • Parts of the Consumer Credit Act 1995
  • All regulations on unfair terms in consumer contracts
  • All Consumer Goods Regulations 2003 and associated guarantees
  • All Consumer Information Rights Regulations 2013
  • A section of the Arbitration Act 2010
  • All Trade Stamp Law

and will modify:

  • The Consumer Protection Act 2007
  • Sale of Goods and Supply of Services Acts 1893 and 1980
  • The acts referred to in Parts 10 to 12
  • And the 2020 cooperation regulations, by adding fines based on turnover / 2 million euros for generalized infringements (article 173(2) and part 2 of annex 6)

It will introduce several enhanced statutory protections for consumers, including:

  • New rights for digital content contracts, e.g. audio, video files and computer games
  • New rights for contracts for the provision of services, for example streaming services, cloud computing and social media
  • Rights where the consumer does not pay a monetary price but gives personal data which the trader can market
  • Consumers will be entitled to know whether the seller from whom they buy goods or services on a platform, for example Ebay or Amazon, is a private seller or a merchant
  • An increased “blacklist” of still unfair contract terms
  • New enforcement powers for the Competition and Consumer Protection Commission (CCPC) to ensure respect for consumer rights

In addition, it will strengthen consumer rights regarding quality, fitness for purpose and other aspects of services. Consumers will have legal remedies when the services provided by merchants do not comply with legal requirements. Traders should familiarize themselves with the additional obligations incumbent on them with regard to sales to consumers.

Advice for traders

  • Tip 1: The Consumer Rights Bill introduces an after-sales obligation for traders to ensure that consumers are informed and provided with the necessary updates to keep the goods in conformity with the original sales contract . In the case of goods containing digital elements, the obligation is on the trader to ensure that customers are informed and receive relevant updates, including security updates. The Merchant is not obliged to provide upgrades, new features or improvements to the Goods, but only to provide updates necessary to keep the Goods in conformity with the contract.
  • Even when a merchant sells third-party manufactured goods to consumers, the responsibility to provide updates rests solely with the merchant. We recommend that merchants obtain contractual commitments and/or indemnities, where applicable, from third-party producers in order to manage this risk. The contract with the producer should clearly detail how and when the producer will provide the digital content, digital services, if any, and updates for the required duration. The contract must also mention the producer’s assistance to the professional for bringing the goods back into conformity when the consumer is entitled to recourse.
  • Tip 2: The bill imposes additional transparency requirements on merchants regarding customer reviews. Merchants will need to ensure that all customer reviews they display are genuine. Submitting or commissioning false reviews or recommendations from customers will be prohibited. Merchants will have to justify the reasonable and proportionate steps they have taken to ensure that their customers’ reviews are genuine, for example by only displaying reviews from verified buyers.
  • Tip 3: The bill also addresses personalized pricing. It requires that the consumer be informed when the price of a product is personalized on the basis of automated decision-making. If a merchant is customizing prices based on automated decision-making, it is advisable to have a process in place to disclose this to consumers.
  • Tip 4: Merchants who provide search query functionality to consumers for the sale of goods/products will need to indicate if any of the displayed results contain paid advertisements or if they have received payment to view the product or service more high in its search results. . However, this will not apply to online search engine providers in general.

Enforcement powers in Ireland

The CCPC will also gain new enforcement powers over traders who break the law, with dramatically increased penalties available for EU-wide prosecution of breaches. As required by the Omnibus Directive, GDPR-style fines will apply to EU-wide breaches of several parts of the Consumer Rights Bill. These fines will amount to up to 4% of the trader’s annual turnover in Ireland and the Member States concerned, or up to €2 million.

Class action and representative actions

On March 22, 2022, the Irish Government approved the development of legislation to transpose EU Directive 2020/1828 on representative actions for the protection of the collective interests of consumers (EU Representative Actions Directive). This is effectively a European-style class action remedy, which will be available for losses suffered by consumers resulting from breaches of over 60 existing European regulations and directives.

The EU Representative Actions Directive was published on 4 December 2020. Ireland and the other Member States are required to adopt implementing measures by 25 December 2022 at the latest and the measures will apply to from June 25, 2023.

Once brought into force by national legislation, the EU Representative Actions Directive will harmonize the regime for collective actions to be brought on behalf of EU consumers. It also aims to balance the availability of the mechanism in member states while providing safeguards to prevent frivolous claims against traders, as detailed in our previous article available here.

And after?

The Consumer Rights Bill 2022 will now have to go through every stage of the legislative process. However, once finalized and passed, Irish consumer law will be radically overhauled, merchants’ obligations will be extended and penalties for certain breaches will increase dramatically.

Merchants are advised to prepare for the introduction of this new law by considering the impact of the bill, any changes that may be required in their selling practices, and to be prepared to comply with the bill. law upon its entry into force. There will probably only be a short time to comply with the new law, as the deadlines provided by the EU directives are January 1, 2022 and May 28, 2022.

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