1 . Information on new legislation
Amendments in the Danish Marketing Practices Act
The Marketing Practices Act has been amended in order to implement the Directive on unfair commercial practices. The amendment entered into force 1 December 2007. The Consumer Ombudsman has issued an information paper on the new rules.
Revised guidelines in the telecommunications sector
More transparency for consumers wanting to buy a mobile phone or broadband connections. That is the purpose of the negotiations that the Consumer Ombudsman has conducted with the Danish telecommunications sector. The result is a revised set of guidelines which took effect 1 May 2008.
A number of clarifcations can be found in the revised guidelines. These include:
- Specific recommendations regarding advertising of connection speed
It must be clearly stated if the marketed connection speed is not identical with the speed which the consumer or end-user obtains. Information about the actual speed of the connection must be provided at the same time as the offer itself.
- Duty to inform about services and products
Traders and service provides will often have a duty to guide the consumer concerning choice of subscription, services etc.
- Price information
When using or stating prices in the marketing initiative, clear and intelligible information concerning fixed as well as variable costs and prices of major importance to the customer’s assessment of the offer must be provided.
The ’Best Practice in the Telecommunications Industry’ guideline took effect in 2005.
New guidelines on fees
Fees should be clearly identifiable as such, whether they appear on the invoice or in the contract. The Consumer Ombudsman intends to keep a close watch where fees come as a surprise to the consumers – and a new guideline on fees helps explain the does and dont’s of the use of most fees.
A provision concerning fees was introduced into the Marketing Practices Act 1 July 2006. It governs traders’ access to change existing fees or introduce new fees into a contractual relationship
The guideline explains, among other things, how and when to give notice of fees.
The guidelines took effect 1 July 2008.
2. Success stories
Fraud Prevention Month: enforcement matters
In the 2007 Fraud Prevention Month a campaign was carried out in cooperation with major trade organisations and the E-mark Foundation (E-handelsfonden). From March through May 2007, e-traders were informed about fair practices in the field of e-commerce. More specifically, the right of cancellation and terms related to cancellation received special attention in the Danish campaign. 280 websites were swept during the course of the ICPEN spring campaign. Approximately 50 per cent breached the law by failing to state mandatory information about cancellation rights. As a result, ten internet traders were reported to the police in June 2007 for failing to inform correctly about the use of the cancellation right. Other sites stated terms which unlawfully curtail the customer’s right to return a purchase and get the money back. The traders in charge were ordered to remove these terms from their website.
In the spring of 2008 the first criminal case was brought before court and the trader was fined DKK 25,000 (€ 3,300)
Major broadcaster repays Danish consumers DKK 11 million (€ 1,450,000)
The Consumer Ombudsman has obtained a settlement with a major broadcaster operating on the Danish market. Customers unlawfully billed for fee raises now get their money back.
The company raised its card fee in 2006. The card is mandatory and needed to receive tv channels. The fee was levied on top of the ordinary subscription charge. The fee, charged on a recurrent basis, covered tv distribution costs and programming of satellite systems.
The card fee was raised twice during 2006. Customers who had pre-paid the fee were thus unlawfully billed extra as a result of the broadcaster’s decision to raise the fee.
3. Case study
Consumer Ombudsman intervenes in legal proceedings involving charge-back and PayPal
A consumer has filed a lawsuit against his bank over the application and interpretation of the Consumer Ombudsman guidelines on payment cards. The bank refused to handle a refund claim for a purchase made via PayPal – the Consumer Ombudsman now intervenes in the proceedings.
The guidelines set out that a consumer using his/her credit card online to make a purchase is entitled to a refund in the event of non-delivery.
The bank refuses to refund the money because the payment due to the seller was handled via PayPal, an auction site selling e-money. It was not a case of non-delivery, argues the bank, as the consumer has received the e-money paid for with the payment card. Moreover, the payment card was not used to pay the seller directly.
The Danish Complaint Board of Banking Services upheld the consumer’s viewpoint that the Consumer Ombudsman guidelines on payment cards were applicable to the purchase.
The bank, still refusing to refund the money even after the Complaint Board’s decision, will now try the decision at court. The trial is due to commence in October 2008.
Background on the case
The consumer had bought services for use in an online game. On finding out that the services were defect, he contacted his bank to request a chargeback in accordance with the Consumer Ombudsman guidelines on distance selling with payment cards in payment systems, cf. the above.
Marketing targeted to children and young people under scrutiny
The Consumer Ombudsman launched a campaign in autumn 2007 to investigate potential fraudulent or misleading practices among traders operating services on the internet targeted to children and young people. The aim is, among other things to bring existing guidelines up-to-date.
The campaign, supported by a number of interest and trade organisations, included an investigation of websites where especially the following points were not adhered to:
• the trader does not take into consideration that children and young people in general are more susceptible to the impact of marketing, and hence has not framed his marketing initiative with special regard for this young group of consumers
• marketing initiatives which should not appear in the context of children and young people
• marketing initiatives which incite the use of violence, drugs and alcohol
• websites making use of hidden advertising
• websites which fail to inform its users that minors cannot take out subscriptions, make purchases and join clubs without their parents’ permission
• websites that contain insufficient information about prices, buying and selling
As part of the campaign the Consumer Ombudsman contacted a number of internet communities whose services and activities are targeted to children and young people. The companies were asked to provide information about how they ensure compliance with the law. Their responses are currently being investigated.
Marketing targeted children and young people is regulated under section 8 of the Danish Marketing Practices Act.
Underwear commercial deemed sexist
A commercial for men’s underwear was the subject of intense debate in late 2007 and early 2008. The Consumer Ombudsman deemed the overall impression of the commercial, which featured four women in scanty and somewhat provocative dresses, discriminating.
The commercial, shown on the internet as well as printed in catalogues available in company outlets and shown on posters in those outlets depicted four women dressed up as a secretary, a nun, a nurse and a maid respectively. The photos, one woman in each, showing the women sniffing a pair of men’s underwear, conveyed the impression that the women had had sexual intercourse with a man no longer there.
The Consumer Ombudsman was of the opinion that the commercial reduced the female sex to sex objects with the sole intention of boosting sales of men’s underwear.
A considerable number of complaints also influenced the Consumer Ombudsman’s decision as did the depiction of the predominantly female occupations which is considered detrimental to the general status of these occupations.
The case surrounding the commercial has been the subject of intense debate in academia as part of an ongoing discussion of the concept of commercial free speech as well as heavily covered by media.
4. Other important news and events
In March 2007 the Consumer Ombudsman supervision strategy took effect.
The starting point of the strategy, which will constitute the backbone of Consumer Ombudsman Henrik Øe’s administration of the office, is impartiality and thoroughness in the daily work.
See the vision statement behind the strategy and the five objectives below.
Principles of impartiality, trustworthiness and efficiency underlie all DCO activities. The DCO strives to offer a professional service which inspires the respect and confidence of both consumers and business and trade. Activities are based on information, dialogue, cooperation and efficient law enforcement. Thoroughness and quality are values integrated in the DCO’s daily work
- Objective 1
The DCO will strive to ensure the greatest possible level of compliance with marketing and consumer law by means of cooperation and dialogue with traders and consumer and trade organisations.
- Objective 2
The DCO will put strong emphasis on consumer and marketing law enforcement.
- Objective 3
The DCO will provide better access for traders to get an advance assessment of contemplated marketing initiatives and campaigns.
- Objective 4
The DCO will engage actively in international law enforcement cooperation so as to better protect consumers against unethical and unlawful marketing activities emanating from other countries.
- Objective 5
The DCO will strive to prevent breaches and violations by means of targeted information initiatives and public information about his work in general.
More information about the strategy is available at www.consumerombudsman.dk
New online form help traders get the Consumer Ombudsman’s view on their marketing concepts
The Marketing Practices Act has for many years afforded business and trade with the possibility of obtaining the Consumer Ombudsman’s assessment of the legality of a new marketing initiative before it is launched. In 2007, that possibility went online. Traders who wish to make sure that they toe the legal mark can now fill in a form on the Consumer Ombudsman’s website where they are asked to provide detailed information about the concept. In 2007 the Consumer Ombudsman issued statements concerning marketing concepts no less than 103 times.
Consumer Protection: the European Dimension
Uniform rules and more comprehensive harmonisation on a high level form part of the future consumer policy framework in the EU. In an article published in October 2007, Danish Consumer Ombudsman Henrik Øe offers his views on the workings of the current system along with a suggestion for a way to approach future regulation of the internal market.
The protection of Danish consumers against illegal marketing practices finds it legal foundation in harmonised EU legislation to an ever-increasing extent. Cooperation with other consumer protection authorities to clamp down on rogue traders conducting illegal cross-border marketing activities takes the same path.
Some rules, however, will for various reasons remain unharmonised due to, inter alia, cultural taste and customs. The paper advances that, in order to reconcile these differences, a European rule on the principle of fair commercial practices which takes into account heterogeneous legislation and different national traditions of law could be introduced to make up for blank spots.
SAUGMANDSGAARD ØE, Henrik.
The EU Consumer Policy Framework: Mission nearly accomplished? – New Rules on Consumer Protection Cooperation, Unfair Commercial Practices and Applicable Law. In: Carl BAUDENBACHER, Claus GULMANN, Koen LENAERTS, Emmanuel COULON et/and Eric BARBIER de LA SERRE (eds.), Liber Amicorum en l’honneur de/ in honour of Bo VESTERDORF, Bruylant, Bruxelles, 2007.