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Looking out for the little guy

Law incorporates sweeping EU rules to increase consumer protections

By Victor Velek
Staff Writer, The Prague Post
December 19th, 2007 issue

Blacklisted
Select commercial practices banned in the EU, from 28 total:

Bait advertising
Products advertised at a low price without reasonable stock available

False limited offers
Claiming a product will be on sale for a limited time only

Security as marketing
Advertisers unduly playing on fear of security risks

Pyramid schemes
Business models, without product or service, that rely on continuously enrolling misled consumers for cash

Improved odds
Claiming a product can facilitate winning games of chance

Emotional pressure
Telling shoppers that by not buying a product, the sellers' livelihood will be in jeopardy

Source: Unfair Commercial Practices Directive

enlarge

Shoppers should feel more protected against misleading and aggressive commercial tricks next year, thanks to a bill passed by the Chamber of Deputies banning all commercial practices and advertising that prevent potential customers from making “informed choices.”

While the current consumer protection law is rather vague in stating what is and what is not an unfair commercial practice, the amendment, which incorporates new European Union rules, features a detailed “blacklist” of practices considered illegal in all circumstances.
“This will be a big plus for Czech customers,” said Klára Přikrylová, a lawyer with the Consumers Defense Association (SOS).
Present laws allow for multiple interpretations, and this poses problems for state authorities when tackling suspicious practices, according to the Czech Retail Inspection (ČOI), the country’s consumer watchdog.

“[The existing law] provides room for a variety of readings,” said ČOI head Jana Příhodová. “That’s why we welcome the specificity of the new law’s list.”
According to Přikrylová, the blacklist will boost the powers of the ČOI, discourage businesses from using unfair sales strategies and raise awareness of consumers’ rights. “It will cultivate the relationship between sellers and buyers,” she said.
The bill, passed by the lower house Dec. 7, is not expected to face any significant challenges in its approval by the Senate or President Václav Klaus. The new regulations should come into effect by the end of the first quarter of 2008, said Industry and Trade Ministry spokesman Tomáš Bartovský.
However, as in several other cases where it was required to fold an EU directive into law, the Czech Republic ranked among Europe’s laggards in failing to meet the Dec. 12 deadline set for adopting the directive.
Since the legislation process is underway, there are no sanctions looming for the delay, according to Bartovský.
Kitchenware tours
The country is plagued by any number of tricks that hamper consumers from getting clear and fair information when they consider spending money on a product or a service, according to SOS spokeswoman Ivana Picková.
Although ČOI inspections and SOS legal actions against misleading companies have eliminated a number of “dirty players,” Czech consumers are far from being spared deceptive sales conduct. In fact, over the last few years, misleading and deceptive marketing has increased slightly, Picková said.
“On the other hand, customers are now more aware of their rights,” she added.
A similar trend was also seen in the advertising industry, where complaints about unfair or unethical advertising have doubled over the last decade, according to the Czech Advertising Standards Council (RPR), a professional association supervising fair advertising.
Last year, 19 complaints made to the council’s arbitration committee were found improper, said RPR executive director Ladislav Šťastný. The majority of these advertisements infringed on consumer rights.
The new law is a welcome step forward and will make the battle against unfair practices much more effective, Šťastný added.
According to the SOS, one recurrent trick are the cheap one-day tours to castles or spas that turn into prolonged sales pitches for kitchenware products — frying pans and pots — at excessive prices.
“Pensioners, typical participants of such trips, are exposed to aggressive marketing and pressured to buy goods for exorbitant prices,” Picková said.
Another long-lasting problem is businesses — typically money lenders and travel agencies — that provide customers with incomplete information about prices, according to the association.
Pitfalls even await customers just out doing their daily shopping, Picková added, pointing to recent cases of “dairy” products actually produced from vegetable fats and fake organic products.
Against good morals
Despite the wide belief that the EU directive has spurred consumer rights across Europe, Czech consumers will also have something to lose once the bill passes into law: Against the protest of the SOS, the government dropped parts of the original consumer protection law when drafting the new amendment.
In fact, Industry and Trade Minister Martin Říman (Civic Democrats) did not hide his disfavor of the bill when it was passing through the Chamber of Deputies.
The amendment would not have been proposed by the ministry at all if the country hadn’t faced sanctions for failing to adopt it, said Říman, who, unlike the SOS or ČOI, sees the list of unfair practices as too difficult and comprehensive to be properly enforced.
As a result of the Cabinet’s changes, sellers will no longer be obliged to provide their business address on invoices and receipts requested by customers; also, a broad provision banning business behavior “against good morals” will be removed, Přikrylová said.
The ministry argued that the former provision was dropped for the sake of simplicity and harmonization with the trade-licensing law, and the latter because it is not used by regulators.
The SOS finds the arguments ill-founded and fears that the changes will harm consumers. The dropped clauses are important building blocks of consumer protection, Přikrylová said, and “the changes might reduce the positive impact of the new rules.”
Viktor Velek can be reached at
velek@praguepost.com

Victor Velek can be reached at vvelek@praguepost.com


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