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Honoured guests and participants:
My name is Henrik Øe and I am the Danish Consumer Ombudsman.
It is my pleasure to welcome you to the IBTL conference – and to Denmark and Copenhagen.
Many of you may never have been here before, so I hope you will get an opportunity to explore our city after the conference.
Copenhagen is now dressed up for Christmas. It is the season of tradition, but as with other traditions it is made to be invented anew.
Every year our old amusement park comes up with a new attraction for Christmas, to take just one example.
I have been invited here – not to tell you about Christmas traditions in Copenhagen of course, but a tradition of governance – the Consumer Ombudsman institution.
And although the Consumer Ombudsman institution has not been around for quite as long as the amusement park in Copenhagen – it does have a new attraction this year if you like – a new Consumer Ombudsman has taken office.
I took office a month ago after my predecessor Hagen Jørgensen. He really managed to bring the issue of consumer rights to the fore in the public debate. He held the office for 16 years.
Today there are people who doubt it if there ever was another Consumer Ombudsman. In a sense, he became known as Mr Consumer Protection.
This is quite a heritage to live up to. I am not entirely new in the business myself though. I have previously worked with consumer legislation in the Danish Ministry of Justice. And I have co-authored a number of publications on consumer law. So you can say that I know a bit about the job area already.
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What is a consumer ombudsman? With the introduction of a Marketing Practises Act in 1975, the Consumer Ombudsman institution also came into being. The most important task of the institution is to see to it that this Act is complied with.
You may know the term "ombudsman". That is traditionally a government-appointed independent authority which investigates citizen complaints over the public system.
My task is a bit different. I am entrusted with the duty to supervise compliance with a number of laws, regulations, EC directives and other things. But as I said, first and foremost the Marketing Practises Act.
And I am independent in the sense that the Government cannot interfere with or decide on my supervision activities.
You may then well ask what is considered marketing activities.
I deal with advertising and marketing campaigns launched by business and trade. But I also work to ensure that consumers are offered fair terms and conditions in contracts. After-sales activities such as collection of debt are also part of my field of work.
I do not intend to give you a lecture on the Marketing Practises Act. But I would like to give you a general idea of my job. Here are a few words about the legal framework.
Section 1 of the Marketing Practises Act is a general clause on fair commercial practises. It is the cornerstone of my supervision activities. The clause sets out that business and trade shall exercise good marketing practise with reference to consumers, other traders and public interests in general.
What constitutes good practise is subject to the development in society in general. It is a flexible normative standard. Marketing activities that were deemed unacceptable in the 1980s may cause no offence today – and vice versa.
The purpose of the general clause is to encourage responsible self-regulation in business and trade.
The Marketing Practises Act also regulates price marketing;
- fees levied by business and trade;
- sales promotion activities;
- unsolicited commercial communication – also known as spam; and
competitions.
Moreover, the Marketing Practises Act applies to marketing activities in the public and private sector alike.
What powers do I have?
According to the Marketing Practises Act, the Consumer Ombudsman has a duty to negotiate with business and trade, for example with individual businesses or with trade organisations.
But the Consumer Ombudsman also issues guidelines and guidance. The guidelines set out how business and trade should act in order to be on the right side of the law.
A vital contribution to these guidelines comes from trade and interest organisations. You can find many of these guidelines and more information about my work in English on my website www.consumerombudsman.dk.
If I find that a marketing activity violates the law, I can issue an interim injunction against it. Another legal remedy is penalty by fine, but only few of the provisions of the Marketing Practises Act come with this sanction.
A marketing activity which violates any section under the Act is likely to breach the general clause as well. The Consumer Ombudsman can meet in court and enforce the provision.
In sum: my institution works for a fair over-all change of policies and practises in business and trade.
A Consumer Ombudsman works for the protection and enhancement of collective consumer rights. And he also works for the principles of best marketing practises.
My work is supposed to be to the benefit of both consumers and serious enterprises.
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What are the most pressing challenges that the Consumer Ombudsman faces? A new Marketing Practises Act took effect 1 July this year. It has in many ways improved the legal framework that I need to clamp down on fraudulent and unfair marketing practises.
A new issue is the provision on covert advertising. It lays down that commercial communication should always be clearly distinguishable as such. Advertising disguised as editorial copy or product placement are two well-known examples of covert marketing.
But more sophisticated tricks may be played – and they are unfortunately often targeted to children and young people.
But the introduction of a new penalty clause in relation to covert advertising opens up for more severe punishments in the form of fines. Advertisers and ad agency must now – more than ever - exercise special caution when designing marketing campaigns.
Another challenge is the reintroduction of supervision with price marketing. Price transparency is in my opinion the be-all and end-all of fair competition in the market. This is not only a consumer issue, but also a question of fair commercial practises.
Businesses that cut corners in their price indications should not be allowed this kind of head start. My message is: soap or cell phones - the rules apply to all trades.
But consumer protection is not only a question of fair marketing!
New rules on class action in Denmark also pave the way for collective actions on behalf of all consumers. Damages may be difficult to claim for the individual consumer. But the Danish Parliament is currently preparing an act that will enable me to bring collective actions for damages.
Another task assigned to me is supervision of the new Act on Legal Counselling which took effect 1 July this year. It is now possible for people without formal legal training to offer legal counselling.
However, legal advisers of this kind also have an obligation to market and carry out their services correctly and responsibly. They have to comply with both the Act on Legal Counselling and the Marketing Practises Act.
I now move on to our international affairs. Consumer issues are global. The Consumer Ombudsman institution has for many years been highly involved in international consumer protection activities in both the EU and ICPEN.
ICPEN is an international forum for consumer protection authorities. In ICPEN we discuss practical measures to prevent unethical cross-border marketing activities. We also make joint campaigns to create awareness about fraudulent marketing practises among consumers worldwide.
As for the EU, a new regulation concerning consumer protection takes effect 1 January. The regulation establishes formal cooperation procedures between the European consumer authorities. European consumer authorities can now help each other when requested for assistance in cross-border marketing cases in the internal market.
The Danish Consumer Ombudsman has been appointed central enforcement authority in Denmark.
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And so the Consumer Ombudsman institution is charged with a large number of supervision tasks. It also has to live up to the fine reputation it enjoys in Denmark: a 2005 Gallup survey showed that 71% per cent of the respondents found the institution very credible and trustworthy.
More than half of these respondents believed that the Consumer Ombudsman had a positive impact on the marketing practises used by business and trade. I hope – on my part - to be able to honour the goodwill and confidence flowing from the Danish consumers, business and trade.
What will be my supervision priorities?
My predecessor saw himself as a 'consumer watchdog'. In the coming months, I will also mark out the territory that I intend to patrol.
First of all: I want my institution to command respect and confidence among consumers and business alike. I believe that dialogue, negotiation and preventive actions should always come first.
I look forward to a fruitful cooperation with trade organisations and the Danish Consumer Council. Contributions from business and trade are also extremely valuable. This way I hope to establish new practises to the benefit of all players in the market.
While I have several initiatives in the pipeline, I will in the following concentrate on electronic marketing.
With the new Marketing Practises Act, the Danish Parliament sent a clear political signal to business and trade regarding marketing targeted to children and young people. A new section explicitly sets out that business and trade should be particularly careful when marketing products and services to this age group.
In combination with the new section on covert advertising as I have already mentioned, it will be even more difficult for business and trade to get away with unethical marketing methods.
And these legal powers are needed. I am at present focusing on young people’s use of interactive media to locate how and where to intervene legally.
This is a brand new world in which children are easy prey because advertising comes in many and unexpected guises. Almost all young people and children are armed with a mobile phone today. This means that children and young people have unlimited possibilities of getting into trouble on the internet.
The Internet can also be a blessing. I think many of us are grateful for its shopping facilities – especially this month of the year. But trust is a factor of paramount importance when it comes to internet trade. While Danes are up-front with internet technology, many are still insecure when it comes to shopping online.
E-traders unfortunately often provide incomplete or even wrong information about basic rules such as rights of cancellation, terms of delivery and other terms of contract. I intend to go for a more systematic approach against offenders in this area.
All in all - my job is like a wedding of old traditions and practises and new to be established. It is my job to work for a fair and happy relationship between consumers on the one hand and business and trade on the other.
And as in other marriages, this kind of mediation takes a great deal of negotiation, dialogue and sometimes tough methods such as court enforcements.
Thank you very much for you attention and the opportunity to introduce the Consumer Ombudsman institution. Enjoy the conference and Copenhagen. And merry Christmas.