Attention traders! Is your business in compliance with the ODR Regulations?

PART 2

In part 1 of this two-part series of articles we examined the ADR Directive.

Now we examine the online dispute resolution regulations (the “ODR Regulations”) which signal a new regime for handling consumer disputes in Europe.

The ODR Regulations

The purpose of the ODR Regulation is to provide “a European ODR platform (‘ODR platform’) facilitating the independent, impartial, transparent, effective, fast and fair out-of-court resolution of disputes between consumers and traders online.”

Clearly the ODR Regulation is in response to the growing trend of consumers to shop online.  Effective since the 9 January 2016 and now transposed into Irish law, the ODR Regulations provides access to an ODR platform for online consumers.

It is presented as a user friendly landscape for both consumers and traders alike.  There is an electronic complaint form, electronic case management and translation services where the translation of information is necessary for the resolution of the dispute.

The benefit of the ODR Regulation, in addition to those benefits underpinning the ADR Directive, is that it negates the needs for the physical presence of the parties unless of course procedural rules provide for that possibility and the parties agree.

The ODR Platform is available on the European Commission’s website.

Traders beware!

The ODR Regulations place an obligation on traders established within the European Union engaging in online sales or service contracts, and online marketplaces established within the European Union, to provide on their websites an electronic link to the ODR Platform.  Where an offer is made by e-mail, an electronic link must be provided in that e-mail and the information must also be provided, where applicable, in the general terms and conditions applicable to online sales and service contracts.  Traders should also provide their email address on their website so that consumers have a first point of contact.

Accordingly, traders should ensure that the websites are brought up to date.  Failure to comply with ODR Regulations is a penalty, such a penalty to be determined by national law.  Irish law makes it an offence to fail to comply with the ODR Regulation and imposes on summary conviction a fine or prison sentence for a term not exceeding twelve months, or both.

Once the above obligation has been met, traders can take some consolation from the fact that the use of the ODR Platform by a trader is not mandatory.

Conclusion

Market accessibility is more flexible than every before.  Traders in moving online are responding to the desire of consumers for greater choice.  However, traders beware, as the markets and consumer trends change, so do your obligations. If in any doubt, contact us today.

Traders Take Note!

ECC Ireland top ten tips for traders:-

1. 1. Make it clear who you are to your consumers.Have you displayed your business or company name clearly?  Have you made an email address permanently available to your consumers?
   2. Include a set of terms and conditions on your website.If these are not already set out already, they should be!  If they are but you are not sure if they are compliant with your legal obligations, why not take this opportunity to review your websites legal compliance.
   3. Protect your customers’ data and publish a privacy statement.As a trader you will often find yourself referred to as a “Data Controller” which carries with it certain legal obligations under data protection legislation.  You are responsible for its safe storage and should provide for a privacy statement on your website.
   4. Add secure payment processing and a shopping cart to your website.As online sales are increasingly cross border, it is imperative that you invest in proper secures systems of payment on your website.
   5. Ensure that certain information is provided.Consumers must be informed every step of the way and all required pre-contractual information must be provided. Transparency is essential!
   6. Products on your website must be of merchantable quality, fit for purpose, as described and correspond to any samples or models used.For the first six months after purchase, if a fault occurs the onus is on the trader to prove that this not due to lack of quality in the product.  It is after the initial six months that the onus switches to the consumer to prove the product was not of merchantable quality and that there was some inherent defect.
   7. Pre-ticked boxes for additional payments are no longer permitted.Carefully review your website so as not to fall foul of this prohibition. Any pre-ticked boxes imposes charges on consumers should be un-ticked.
   8. Period for order completion is 30 days.Unless otherwise agreed you are obliged to deliver the product within this 30 day period and if you fail to do so the contract may be terminated by the consumer.
   9. In the EU, customers have 14 working days within which to cancel or withdraw from a purchase without having to give any reasons.Previously, this was a period of 7 days. It is now extended to 14 days. Once this right has been exercised by consumers, the onus falls on the trader to refund the monies within 14 days. This allows consumers to return good if they change their mind. No reasons is required to be provided.
   10. Requirement to eliminate surcharges for the use of credit cards and hotlines.Traders can no longer apply costs for the use of credit cards and hotlines. Accordingly, traders should take care to calculate the cost of a transaction and only charge that cost to the consumer.

For further information contact Elaine McGrath emcgrath@reddycharlton.ie

For information on the ADR Directive, see part 1 of this two-part consumer ADR series of articles.