Shopping through the Internet, mail-order catalogues or by telephone is gaining popularity but consumers' legal protection in this area is still limited, says the European Consumer Centre (ECC).
"A European directive designed to protect the consumer in respect of distance contracts was adopted in 1997," it says. "However, it is not due to be implemented in Ireland until June 2000. Between now and then if a consumer comes to grief over a distance contract, all he can do is plead that the contract contained unfair terms, under the Regulation of Unfair Terms in Consumer Contracts.
"A contract is considered to have unfair terms when the consumer's contractual obligations are not equally balanced by the seller's obligation. Each case is different and unfortunately only a court can determine whether a particular term is unfair," it says.
According to the ECC newsletter Consumer Watch, when the new directive comes into force, retailers and service providers must give consumers specified information in writing before a contract may exist. The document must include: the identity and address of the supplier, a description of goods and services, the price and any additional charges.
This information must be confirmed in writing by the supplier before goods are delivered.
Unfortunately, the current legal black hole has left some unsuspecting Irish consumers open to litigation. In several cases, book clubs or music clubs sued consumers because they did not uphold their part of the contract. Often such specifics are written in "fine print" on enticing introductory offers. However, once a contract is signed the consumer is legally responsible for maintaining their side of the agreement.
Another confusing aspect of distance purchases for consumers is the way VAT and customs procedures apply when items come from abroad. This issue was recently raised by a Family Money reader from north Dublin who is thinking of buying books and music over the Internet.
When products are ordered from another EU state, VAT is payable at either the rate applicable in your state or at the rate applicable in the seller's state. Generally, the seller will charge you the most advantageous rate.
In relation to customs procedures, the European Consumer Guide to the Single Market says: "Mail order aficionados will know that, when they place an order with a firm in another EU country, VAT will now be included in the price and goods will be sent directly to them. Red tape at the customs is now a thing of the past".
Last June, the World Trade Organisation (WTO) voted to ban customs duties on electronic transactions for one year. The United States is lobbying for a permanent ban while the Republic agrees with the WTO on a one-year term even though additional taxes will slow growth on the Net. If some states have their way, the Internet may become the next duty-free zone.
The European Commission recently proposed an amendment to the distance selling directive concerning consumer protection for financial services purchased at a distance.
"By creating legal certainty for these methods of selling financial services at a distance, this proposal will encourage cross-border trade of financial services, boost competition and facilitate market integration. The expected widespread use of distance selling methods will be complemented by the introduction of the euro," Financial Services Commissioner, Mr Mario Monti said.
The message overall, is that Irish consumers should either know their rights and responsibilities before purchasing from a distance or wait until the directive, is implemented.
