Consumer protection: a key priority at ACM

Also this autumn, consumer protection will be one of the key priorities of the Authority for Consumers and Markets (“ACM”). COVID-19 had already led to stricter supervision by ACM to prevent companies from using the crisis as a licence to swindle consumers. Immediately after the lockdown was announced, ACM warned that it would act against companies that abuse the situation in order to mislead consumers, for instance by falsely claiming limited availability of products or by charging extortionate prices. ACM resumed its dawn raids and investigations in June, which immediately gave rise to new warnings and orders subject to penalties. New regulations are also in the pipeline. The main developments are addressed below.

Investigations

ACM is currently investigating several webshops. The reason for doing so is a joint investigation by the European Consumer Protection Cooperation Network. The scope of the investigation of webshops is addressed in this blog. ACM is also investigating organisations that trade in fake reviews, fake likes, and fake followers. ACM has found that Dutch businesses offer paid fake reviews, fake likes and fake followers online, for platforms such as Facebook, Instagram, YouTube and Google. Businesses, and influencers in particular, make use of such services to improve their rankings and their brand recognition. As well as misleading consumers in this manner, such businesses also use negative fake reviews to make their competitors look bad. In ACM’s opinion, paying for fake likes to promote a company’s own products and submitting negative fake reviews about competitors constitutes misleading of consumers and unfair competition.

Enforcement

ACM is continuing its active warning policy. It warned several energy suppliers, for instance, that they had not paid consumers the correct amount of fees for feeding electricity into the grid. Some 20,000 households were underpaid on average for feeding their surplus energy into the grid. Generating your own energy by using solar panels is playing an increasingly important role in the energy transition. In ACM’s opinion, people who feed energy into the grid must be able to rely on the accuracy of their energy bills.

ACM has also accused an insulation company of making misleading claims about energy saving on its website. It has furthermore called heat suppliers to account. ACM has ordered heat suppliers to keep records of power interruptions and to publish them on their websites. Before those records were available, it was unclear to customers whether they were entitled to compensation: customers of heat suppliers are entitled to compensation if an interruption lasts longer than eight hours. They are paid €35 for an interruption of 8 to 12 hours.

ACM has also threatened to impose fines on public charge point providers. That sector consists of a complex network of different providers that offer a wide range of subscriptions and prices. Moreover, the prices at public charge points may differ not only per hour, but also depending on the location. Transparency is essential to customers to allow them to compare prices and make informed choices. ACM has received several complaints these past years about the obscurity of the prices of public charge points and has now threatened to impose fines if the providers do change their policies. ACM has particularly referred to the use of apps for locating available charge points as a means of making prices more transparent, provided that those apps are easily and freely accessible.

ACM recently also reprimanded the Wearpods webshop. Wearpods sold wireless earphones online that it imported directly from China. But it provided vague or incorrect information in its webshop about the delivery times of the wireless earphones. In practice, the delivery time was far longer than that stated on the website. ACM has furthermore forced providers of pilgrimage packages to offer consumers protection in the event of a possible bankruptcy. Package tour operators must participate in travel guarantee funds. ACM has set them a term for taking travel guarantee measures. If they fail to do so, ACM may impose fines. In ACM’s opinion, particularly in uncertain times like these, it is essential that consumers are protected by a travel guarantee.

New regulations

ACM recently published its Guidelines on the Protection of the Online Consumer. In those Guidelines ACM identifies where seduction becomes deception. We addressed the main tips for businesses in online consumer sales in this blog.

ACM has also drawn up Guidelines on Costs for Additional Services in the Rental Process. In those Guidelines ACM has explained that rental agencies may not obligate tenants to take out services that are unrelated to the rental process. Such additional services must be optional. Tenants must also be told beforehand what the additional services cost and what they entail. The tenant’s express consent is furthermore required. The use of standard options is prohibited. Legal proceedings regarding the obligations of rental agencies are currently pending before the Trade and Industry Appeals Tribunal (the “Appeals Tribunal”) .

ACM has furthermore submitted the Guidelines on Obligations of Heat Suppliers for public consultation. ACM wishes to clarify the main rules for the supply of heat in those guidelines. ACM is also drawing up Draft Policy Rules on Network Termination Points (Dutch). The policy rules are intended to make it clear to telecom providers and consumers what part of the network is owned by the telecom provider and what part may be freely chosen by consumers. That way ACM wishes to give consumers more freedom of choice on the telecom market, for instance the right to choose their own modem.

ACM also protects consumers against misleading information about sustainability labels. ACM wants the legislature to introduce stricter rules for sustainability labels in light of the proliferation of such labels. ACM will step up its enforcement measures regarding these practices in the coming year. This issue is addressed in more detail in our Sustainability Trend.

ACM is also escalating its crackdown on rogue debt collection agencies. These past five years ACM has strived to identify and put an end to unfair debt collection practices. On the basis of its experiences in the debt collection industry, ACM has advised on the Ministry of Justice and Security’s bill on the improvement of the quality of debt collection services.

Two other new developments will also impact businesses and consumers. One of them is the bill on the prohibiting of unwanted telemarketing (Dutch), which was presented to the House of Representatives on 25 March 2020. The bill seeks to better protect consumers against unwanted telemarketing for commercial, non-commercial or charitable purposes. The New Deal for Consumers Directive furthermore entered into force on 7 July 2020. An important objective of that Directive is to bring the rules on consumer protection in line with current digital developments, including the rise of online platforms and payment in the form of personal data. The Directive imposes specific clarification requirements on online marketplaces. It also improves the enforcement of consumer rules by setting standards on the basis of which the sanction can be determined, and sets maximum fines in some cases. The Directive also ties in with ACM’s crackdown on fake reviews. The New Deal prohibits fake reviews and obligates traders to inform users about how reviews are submitted. The Directive must be enacted by the Member States within two years.

Legal actions

ACM previously imposed fines in excess of €13 million on KPN, Tele2, T-Mobile and Vodafone for providing incorrect and incomplete information about mobile plans on their websites for consumers. One-off costs were not clearly stated, misleading information was provided about “unlimited” data plans, and information on the conditions of offers was withheld. The four telecom providers disagreed with ACM’s decisions and have filed an objection, while at the same time requesting an injunction to prevent publication of the fining decisions. The preliminary relief judge (Dutch) denied their request, however. The Rotterdam Court will most likely have to rule on those fines in the near future.

The upcoming judgment in the rental agencies case will also be interesting. ACM believes that a rental agency that acts as an agent for both the tenant and the landlord may in no event charge the tenant an agency fee (see above). The Appeals Tribunal will have to answer a number of questions of principle in that case. The same applies to the fine that ACM imposed on a furniture seller for alleged breach of the Prijzenwet (Prices Act). The Appeals Tribunal has yet to rule in that case too.

It is also likely that the Appeals Tribunal will at some point have to rule on the question when a self-employed person acts as a consumer on entering into an energy contract. ACM last year called on all the Dutch power suppliers to offer consumer contracts to business owners (such as self-employed persons) who work from home and wish to enter into energy contracts for their homes. In ACM’s opinion (Dutch), the consumer rules apply when an energy contract is taken out for a business owner’s private home.

Future

ACM will further increase its visibility in the field of the enforcement of consumer rules. ACM will no longer focus only on small rogue businesses: large, reputable multinationals will also be subject to ACM’s supervision if they offer products or services to consumers. ACM’s enforcement measures will lead to new judgments in the course of next year that will further clarify the scope of the consumer rules and the obligations for companies. There’s a storm brewing!

Information on consumer rules and ACM can be found at consumentenrecht.info

Information on dawn raids by ACM can be found at invalacm.nl

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