Communicating with your Customers – Enforcement on Advertising and Consumer Rights
08 June 2016
Recent months have seen increased enforcement in the advertising and consumer protection areas. Some businesses have struggled to get to grips with the European Communities (Consumer Information, Cancellation and Other Rights) Regulations 2014 (the “Consumer Information Regulations”). The first quarter of 2016 also saw the introduction of the new edition of the Code of Standards for Advertising and Marketing Communications in Ireland (the “Code”), which is creating its own challenges for others.
Consumer Information Obligations and Right to Cancel
The Consumer Information Regulations, which came into effect in July 2014, added to the already complex tapestry of consumer law obligations on traders selling to Irish consumers. The Consumer Information Regulations specified certain mandatory information to be provided to consumers, before and after the conclusion of certain sales contracts, including distance contracts such as online or phone sales. The information to be provided includes:
- the trader’s details - their name, address, contact info and other detail;
- details relating to the goods or services - such as the main characteristics, price, delivery arrangements and cost; and
- information about a consumer’s right to cancel the contract.
It also extended consumers’ right to cancel to 14 days for off-premises or distance contracts. The Competition and Consumer Protection Commission (“CCPC”) is tasked with enforcement of the Regulations.
In the first six months after their adoption, no enforcement of the Consumer Information Regulations was seen. However in 2015, the CCPC issued 12 companies with Compliance Notices in relation to the Consumer Information Regulations. This represented over 40% of all Compliance Notices issued for the year. An electrical goods retailer, a department store and a number of telecommunication companies were found to be non-compliant, particularly as regards incorrect or misleading information on the consumers’ right to cancel. For the companies involved, it had serious consequences. Some had to change their websites; others were obliged to notify their customers that they were entitled to cancel their contracts, and how to do so. Such customers were consequently able to cancel their contracts – where otherwise they would have been far out of time.
Adapting to a new Advertising Code
The Advertising Standards Authority of Ireland (“ASAI”) implemented a new edition of its Code in March 2016. The Code aims to regulate commercial marketing communications, and complaints may be made to the ASAI in relation to non-compliance. The new Code has notable new additions, such as added chapters dealing with gambling and e-cigarettes. It has also revised and updated existing sections, such as a very comprehensive update to the rules relating to the advertisement of food and non-alcoholic drinks, as well as new rules on environmental claims and on health claims.
Already in 2016, the ASAI has found a breach of the Code in over 85% of the complaints made. The majority of complaints upheld by the ASAI, 62% according to its 2015 Annual Report, relate to misleading advertisements – once again demonstrating the importance of clear, honest and accurate communication.
Consumer law in Ireland is spread across a number of, sometimes overlapping, measures which can be complex for businesses to implement. An increasing enforcement focus on transparent communication, strict adherence to the cancellation rules, and updated advertising standards, demonstrates the importance for traders to carefully scrutinise sales terms and conditions, marketing communications and advertisements. The potential for enforcement and associated fall-out, including reputational and financial damage, makes the exercise an important one.
For more information, please contact a member of our Commercial team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.