New Obligations for Traders = Justice for Consumers?

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Traders, It’s High Time You Check Your Phone Book

Phone calls directed to consumers are a frequent, practically everyday activity of traders directed towards the promotion of new products or services on the market. Well, if this is the way you used to do business, it’s time for a change: the new Consumer Protection Law which is expected to be adopted in the first quarter of 2021, besides other novelties, prescribes introducing a registry where citizens who are not interested in receiving phone calls and electronic offers from sometimes (too) ambitious traders can sign up.

The introduction of the Draft Consumer Protection Law, (hereinafter: Law) to the Serbian parliament’s procedure was planned for the end of 2019, and the beginning of 2020. However, since the state of emergency has led to a change of plans, the adoption of this Law was postponed. Finally, now that we are entering 2021, it seems that we won’t have to wait much longer, since the Law is expected to be adopted in the first part of this year, which is great news for consumers, having in mind that the greatest changes are directed towards extending customer’s rights. When we take into consideration all the novelties presented by the new Law, we are sure that the consumers will be satisfied, of course, if these novelties will be implemented in practice as well. On the other hand, the new regulations of the Law probably won’t make the traders happy, since it seems that numerous new obligations await them.

Think Twice Before Picking Up the Phone

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When promoting their newest product or service, each trader is using different marketing methods which are directed towards a completely legitimate goal: to make the public aware of the benefits of their new product. The most widespread is the “cold calling” method, which represents the easiest and quickest way to get to potential buyers. Therefore, it is not strange that the number of traders who contact potential buyers via phone, e-mail, or text message is growing.

Although it may seem harmless, the said advertising mechanism, besides making the consumer frustrated and disrupting their peace, also represents a serious invasion of the consumer’s privacy.

Although the current Consumer Protection Law recognizes and prohibits the “pushy business practice” of contacting the consumer multiple times, against their will, via phone, fax, electronic mail, or any other means of electronic communication, until the announced changes, there were no mechanisms to stop this kind of practice.

Only the draft of the new Law has made a step towards solving that problem.

Namely, consumers who do not wish to be contacted via phone, and are not interested in receiving information about new products and services on the market, will now have the possibility to sign up to the registry of consumers who do not wish to receive phone calls and/or messages for the purposes of promotion and/or selling via phone.

How will this function in practice?

Firstly, before calling, or sending a message to consumers, the traders will have to check the “Do Not Call” registry. If in the registry, the trader finds the name of the potential buyer, whom they intended to contact, the trader cannot contact this buyer – they have to find someone else, who is not in the registry. If even then, they decide to ignore the rule and unlawfully contact the individual whose name is in the registry, they risk the inspection imposing a measure to remove the unlawfulness, as well as a misdemeanor liability, alongside a warning fine anywhere from 300,000.00 dinars up to 2,000,000.00 dinars.

Consumers, Don’t Be Surprised When the Bill Arrives

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After the new Law is adopted, traders will have a new obligation when offering the services agreed upon: if the value of the service surpasses the amount of 5,000 dinars, the trader is obliged to draw an estimate of the price on a permanent record holder, alongside a specification of the agreed service. After delivering the estimate to the consumer, the consumer will have to consent to the estimated price before the trader commences to provide the service.

This used to be true only for services such as repair of small home appliances, mobile phones, and similar – you would have to make an estimate for providing these services in accordance with the previously stated conditions.

Besides that, it is necessary to pay attention to the manner of delivering the estimate, as well as obtaining the explicit consent of the consumer.

White Flag in the Event of Dispute: New Possibilities of Consumers

Although the previous law also prescribed the possibility of extrajudicial dispute resolution, it did not take off in practice, probably since traders weren’t obliged to enter into a mediation proceeding, which the consumer started on their own initiative. However, the new Law will establish the obligation of traders to participate in mediation, and if they do not, a misdemeanor liability, as well as a fine amounting to 50,000 dinars awaits them.

The consumer has to be notified about this obligation of the trader, so the trader is obliged to inform the consumers in a clear and visible way at their retail space. If you have an e-shop, make sure to update your general business and sale conditions with all information and notifications necessary, otherwise, you shall face a fine and misdemeanor liability.

The disputes shall be led by a specialized body whose work is funded from the budget, meaning that the proceeding itself will be free, and the only expenses for parties in the proceeding are representation expenses, travel expenses, and similar. The decision in these proceedings will be entrusted upon parties who have at least two years of experience in civil law, and are registered on the list of bodies for extrajudicial consumer dispute resolution, and their status is equal to mediators.

Another important novelty when it comes to peaceful dispute resolution is that a census regarding the worth of the dispute does not exist: namely, up till now, in extrajudicial proceedings, a dispute that is worth more than 500,000 dinars was nonexistent. However, now, there is no such limit, so the possibility that the existing disputes will be solved peacefully is greater.

The basic precondition for the consumer to start an extrajudicial proceeding is to firstly, file a complaint to the trader. It is important to take into account that one year after their (unsuccessful) submission of the complaint, the consumer loses their right to file a motion for extrajudicial dispute resolution. So, be careful and take care of the deadlines in any particular case.

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Each Filed Complaint Will Get Its 5 Minutes of Fame

A new obligation is prescribed for traders when it comes to complaints about the purchased products. Same as up till now, the consumers have the right to file a complaint, no matter whether the product was purchased at the retail space, or e-shop. Also, the deadline for the trader to reply to the complaint is still 8 days from the moment they have received the complaint. Up till now, it was not explicitly prescribed that the trader has to accept the complaint. However, the new legal solution prescribes the trader’s responsibility to accept the filed complaint.

So, if the complaint was filed adequately, the trader does not have the possibility to deny it, but rather, they have to act in accordance with the legal procedure which encompasses:

  • filing a form that they have received the complaint,
  • delivering the answer to the consumer to the filed complaint,
  • solving the complaint, i.e. offering adequate notification to the consumer in the event of complaint rejection.

The key point for traders is that they regulate internal procedures adequately, which concern the procedures of solving the complaint in order to avoid potential extrajudicial and judicial disputes with consumers.

What Does the Reply to the Complaint Include?

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In comparison to the current regulation of the law, the content of the reply to the complaint is prescribed by the draft Law, and another item was added: the trader’s explanation in the event of rejection of a complaint. Besides that, if the trader rejects a complaint, they are obligated to fully notify the consumer about the possibilities of extrajudicial dispute resolution, of which we have talked previously, as well as the competent bodies for extrajudicial consumer dispute resolution.

National Regulations One Step Closer to European Standards

Some of the aforementioned changes are not news when it comes to the law of the European Union. For example, the “Do Not Call” registry which is also known as the “Robinson list” already exists in numerous states, among which are some members of the EU such as Denmark, the Netherlands, Spain [1]… The grounds for creating this registry within national legislation is given by the EU Directive about privacy and electronic communications [2], which prescribes that members of the EU have the freedom to establish the manner in which the contacted parties shall give their consent to receiving advertising materials, and which is a necessary precondition for advertising for the purposes of direct marketing.

Besides that, the EU Directive on the rights of consumers [3] prescribes that the trader is obliged to obtain the consent of the consumer prior to any additional payment which surpasses the amount for the services provided, that was agreed upon previously. Moreover, in case the trader on their own initiative draws a conclusion that the consumer has given consent only based on the fact that the consumer did not explicitly refuse additional payment, the consumer has the right to a refund. So, a surprised consumer when it comes to the amount of the price they are obliged to pay for a product or service is unimaginable in the EU legislation, thus it can be concluded that the Serbian regulation is getting closer to European standards in that sense.

On the other hand, it could be said that the suggested changes of the Law have gone even a step further in comparison to the rules prescribed on the European level when we take into consideration that by the EU Directive about alternate consumer dispute resolution [4] prescribes that the trader is not obliged to participate in the dispute unless the national regulations explicitly prescribe it. Our Law has chosen a much stricter mechanism and prescribed the obligation of including the trader, as it has been explained previously.

What Is Expected in Practice?

nacrt zakona o zaštiti potrošača, nacrt zakona o zastiti potrosaca,

The current Law has shown numerous weaknesses during its use when it comes to both consumers and traders. This is why a significant effort was made, to include novelties to national regulations, by introducing additional, more efficient instruments and mechanisms of consumer protection, which were left out up till now. The new legal solutions, introduced within the draft of the new Law, should extend the customer’s rights, whereby simultaneously, keeping the rights of traders as well.

Besides that, the national legislation would, after the adoption of the new Law, make a huge step towards harmonization with the European standards in the field of consumer protection. Still, whether and to what extent will the draft of the new Law be adopted, as well as to what extent will the legislation be implemented in practice remains to be seen.

What can already be identified as a problem is a manner in which the “Do Not Call” registry will work. It is truly delusional to expect from traders to check whether the party is in the registry before making each call, so it is justified to expect that this practice will hit the trader’s marketing activities and telemarketing hard.

[1] Source: European Consumer Centre Luxembourg
[2] Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications)
[3] Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council Text with EEA relevance
[4] Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR)

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