ICPEN Campaign Raised Awareness of Online Cancellation Rights

01. August 2007

Consumer confidence and safety are of vital importance if consumers are to fully embrace the opportunities and freedom arising from easy access to the internet and its shopping facilities.

Yet potentially misleading and deceptive activities thrive online, and e-traders may – unwittingly- contribute to confirm some of the misgivings that consumers have about using the internet for shopping.

The undesirability of this situation along with his general experience with the area prompted the Danish Consumer Ombudsman to initiate a campaign in spring 2007 to combat the use of illegal and unfair terms of contract in e-commerce.

The Danish initiative formed part of an international campaign against misleading practices taking place under the auspices of ICPEN, an international consumer protection network.

The Danish campaign and ICPEN’s 2007 fraud prevention month

Every year national authorities join ranks in ICPEN’s ‘Fraud Prevention Month’ to improve consumer conditions all over the world. It is up to the individual country how to bring awareness to the theme of the annual fraud prevention month.

In Denmark, 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.

A guideline to lawful cancellation terms in e-transactions between Danish consumers and Danish e-traders was published on the DCO’s website.

What does the law say?

As a main rule, the 14 day cancellation period applies to all Danish e-transactions as stipulated by the Act on Consumer Agreements. The 14 day cancellation period must be stated on the website along with certain legal exemptions and disclaimers.

While the cancellation period is by far the most problematic issue, and the focus of this campaign, it is not the only one. Other unlawful terms have been encountered during previous investigations.

Such terms could be:

  • The goods or service must be returned unused
  • The customer bears the full risk for the handling of the goods while it is being returned to the business
  • The goods must be returned in the original package

The DCO has drawn up a guideline to fair commercial practices on the internet. See ‘DCO recommendations: A Quick Guide to a Good Website’

For a more thorough overview of some of the problems generally encountered, see the newsletter ‘E-trade: A Guide to the Jungle’. The newsletter takes its point of departure in a 2006 investigation of 15 websites which looked into pricing policies, pre-order information, the order process and the distribution of newsletters from the website.

Ten internet traders reported to the police

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.    

The majority of the remaining violations encountered during the campaign period, however, seemed to be rooted in ignorance of rules applicable to the area rather than deliberate ill will. And so a simple enquiry from the DCO’s office in most cases had the desired effect. 

The DCO, Henrik Øe said:
- Most of the websites examined prior to the campaign start now have brought terms related to the cancellation period into accordance with the law. All in all, I am pleased with the results of the campaign.

Background information

A 2006 sweep of 164 websites revealed that 10 per cent failed to provide information about the cancellation right. Unfair terms were encountered on an additional 45 per cent of the websites examined. See the news release ‘DCO staff sweeps online shops as part of ICPEN initiative’ from 2006.

A spot test in January 2007 confirmed the results of the 2006 sweep. In 2007 19 per cent of the websites did not contain information about the cancellation right; another 28 per cent stated terms which appeared to breach significant consumer protection rules. 

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