Chapter Two Consumer Conflict

1. Chapter Two Consumer Conflict Caveat Emptor Long Questions:Q1 Part 3 Part of your ABQ Ms. Marshall

2. Main topics Ms. Marshall

3. Causes of Consumer Conflict Ms. Marshall

4. Ms. Marshall

5. Non-Legislative Resolution • 1. Talk to the retailer/ Negotiation:Consumers involved in conflict should first of all talk to the retailer involved. • Know your legal rights • Bring along your receipt as proof of purchase • Speak to manager in a non aggressive manner. • Write a letter of complaint if you do not get adequate redress. • At some stage in the process the retailer should engage you in negotiation, i.e a process of bargaining to try to reach a mutually acceptable solution to the conflict. E.g. offering a repair if the fault is a minor one. Ms. Marshall

6. Non Legislative Methods of Resolution • 2. Assistance from a third party: • Organisations that can assist in resolving a consumer conflict are: • Consumers Association of Ireland: is an interest group (a non-commercial type of organisation) for consumers. It aims to make sure that consumers get good quality products and services and know their rights. They publish the magazine Consumer Choice and lobbies the government about consumer issues. • Trade Associations: e.g. The Vintners Federation of Ireland is a strong National Trade Association for pubs outside the greater Dublin area. They work on their members' behalf to promote and protect their interests and give advice to members on topics such as licensing laws, employment legislation, planning matters and much more. • Ombudsman for Public Services: The ombudsman deals with complaints against public bodies such as government departments, local authorities, an post and the HSE. She is independent of the government. The Ombudsman will issue a recommendation but it is not legally binding. However, most public bodies comply in order to avoid bad publicity and damage to their reputation. If they do disobey her she will include this in her annual report to DailEireann. Ms. Marshall

7. Ombudsman • Financial Services Ombudsman: specialises in resolving consumer complaints against banks and other financial institutions such as insurance companies and credit unions. The decision of the ombudsman is binding on the institutions involved. • Ombudsman for the Insurance Industry: investigates consumer complaints against insurance companies. The decision of this ombudsman is binding on an insurance company, but not on the individual making the complaint. Ms. Marshall

8. Legislative Resolution of Consumer Conflict Ms. Marshall

9. Legislative Methods of Resolution • Legislative Methods of Solving Conflicts: trying to solve the conflict by referring to the laws of Ireland or by using a legal organisation. • 1. The Sale of Goods and Supply of Services Act 1980: A consumer law that ensures products and services are up to a certain standard by setting out: • The legal rights of consumers when they purchase goods • The legal responsibilities of retailers to consumers. • The legal remedies available Ms. Marshall

10. Sale of Goods and Supply of Services Act 1980 • Provisions of the Act. • 1. GOODS • Merchantable Quality: a provision of the Sale of Goods and Supply of Services Act that ensures goods must be of an acceptable standard, taking into account what they are supposed to do, their durability and their price. e.g. If the heel of your shoes broke after a week you would be entitled to your money back as it would be expected to last longer. • Fit for their Purpose: a provision of the Sale of Goods and Supply of Services Act, this means that the goods must do what they are expected to do. For example, a dishwasher must clean the dishes. • Goods must be sold as described: the product must be exactly as described by the brochure/salesperson, and must not be misleading • Goods must match their sample: If a good is sold by sample then it the product you receive must correspond to the sample you selected exactly, e.g. wallpaper, carpet. • Legal Ownership & Quiet Possession: the buyer relies on the seller having a proper title and claim on the goods, i.e. the seller has the legal right to sell. As a result the buyer should be able to enjoy quiet possession, i.e. using the goods as they wish. Ms. Marshall

11. Sale of Goods and Supply of Services Act 1980 • Provisions of the Act • 2. Services • Services must be provided by a competent person with skill and using due care and diligence. • Any materials used must be sound and fit for the purpose and be of merchantable quality. • 3. The contract is between the buyer and the seller. The retailer cannot tell the buyer it is the problem of the manufacturer, he is legally responsible to sort it out. Ms. Marshall

12. Sale of Goods and Supply of Services Act 1980 • 4. Signs • The retailer cannot put up any sign that gives the impression that a consumer has no legal rights. It is illegal to display the following signs: • No refunds • Credit Notes Only • No refunds on sale items • 5. Guarantees cannot take away a consumer’s basic legal rights against the retailer. They can only give extra protection to the consumer. It gives him the choice of having the goods fixed by the manufacturer under the guarantee or getting the retailer to deal with the complaint. Ms. Marshall

13. Evaluation • This law does a good job of protecting consumers because: • 1. It ensures that consumers get their money back if the product or service they buy is not up to legal standards. While the law cannot do away with faulty goods, it ensures that consumers do not lose money if they buy a faulty product. • 2. Consumers cannot be fooled into thinking they must accept a credit note by retailers who put up signs to this effect. By banning such signs, this law protects those consumers who do not know their rights. Ms. Marshall

14. How the CPA Protects Consumers Prohibiting Aggressive Practices Prohibiting misleading practices Establishing the National Consumer Agency Ms. Marshall

15. Consumer Protection Act 2007 • This Act protects consumers from unfair practices. The following are prohibited by the Act: • False product descriptions • False prices • False or misleading advertising/ false claims • Aggressive practices Ms. Marshall

16. Prohibited Practices • False Product Descriptions: Goods must be sold with a fair product description from the salesperson or advertisement, regardless of whether it is written or verbal. E.g. Waterproof jacket that lets in rain. Withholding important information would be misleading. Making false claims for cures for illnesses is illegal. E.g. Herbal remedies…head shops?... • False Price: It is illegal to give false or misleading information about prices. Goods marked as being reduced in a sale must have been on sale at the original higher prices for at least 28 consecutive days prior to the sale. • The CPA gives the Minister the power to make regulations requiring prices of certain goods to be displayed in a certain manner, e.g. inclusive of taxes and charges. • False or misleading advertising/ false claims: the information in advertising should be fair and accurate. e.g. Free gift should not increase the price. Running promotions or competitions when the top prize is not available. • Aggressive Practices: Traders are prohibited from engaging in harassment, (e.g. demanding payment for unsolicited goods), coercion (forcing someone to do something) and exercising undue influence (e.g. running a pyramid scheme where a person has to persuade others to join to get their money). Ms. Marshall

17. Inertia Selling & Pyramid Schemes Unsolicited Goods • This is when goods are sent to someone without the goods having been ordered by the receiver or by someone on his behalf. Another name for it is Inertia Selling. • The goods only become the property of the recipient and the sender loses all rights to them, if either of the following conditions occurs: • If the sender did not take possession of the goods within six months and the recipient did not unreasonably refuse to permit the sender to do so. • The recipient wrote to the sender stating his name and address, where the goods can be collected and the fact that they were unsolicited goods and after this correspondence the sender did not take possession of the goods within 30 days, nor did the recipient refuse to permit the sender to do so. • Pyramid Scheme: promise you quick and easy money in return for a cash sum. But they are actually designed to con you into investing significant amounts of money which can never be recovered. You may be approached by email, letter, phone or online, or a friend might invite you to go to a meeting about it.  • How the scam works • You are tempted by the promise of "free" money if you invest in the scheme. • When you “buy in”, your money goes to those above you in the pyramid. • In order to move up the pyramid you are usually asked to recruit new members, and they become a new level of the pyramid below you. It can involve large numbers of people parting with small sums of money over a period of time.  • In theory, as you go further up the pyramid you are supposed to get more money but this does not happen because there are not enough people to join the scheme. Ms. Marshall

18. National Consumer Agency • The NCA is the State agency that promotes consumers’ awareness of their legal rights and ensures consumer legislation is obeyed by businesses. They’re responsibilities include: • To promote and protect the interests and welfare of consumers. To inform consumers of their rights/publish shopper’s rights leaflets/ provide a consumer phone service/website. • To enforce the relevant consumer law. Enforcement tools include prohibition notices, undertakings from traders, compliance notices, on the spot fines for offences relating to price display, and the ability to "name and shame" with the publication of non-compliant trader names. These powers include the right to enter premises, get documentation and other evidence in relation to any trade or business which is being investigated. • Enforcement role in relation to pricing and price displays and a product safety role when it comes to items such as personal protective equipment- like GAA helmets or toys. Prohibits false pricing, e.g. goods advertised as being reduced in a sale must have been on sale at the higher price for twenty eight consecutive days (in a row) sometime in the last three months. Ms. Marshall

19. National Consumer Agency • To encourage compliance with the relevant law/ to investigate suspected offences under any of the relevant laws. • To refer cases to the Director of Public Prosecutions where appropriate. • To conduct research into consumer issues/attitudes. • Responsibility for market surveillance of non-food consumer products. It enforces product safety legislation, investigates complaints about unsafe products, alerts consumers and advises manufacturers, suppliers and retailers. • To conduct pricing surveys to raise awareness of price differences. • To advise the government of the impact of laws on consumers and make recommendations on legislation or policy, which concerns or is likely to impact on consumer protection and welfare. Ms. Marshall

20. Evaluation of the NCA • The NCA is very effective because it is a statutory body, is an advocate for the consumer and has enforcement powers for example: • The NCA can serve a compliance notice on a trader whom it considers to have engaged in a prohibited activity. The NCA has the power to enter premises to gather evidence, with the support of the Gardaí if necessary. The trader has 14 days in which to appeal the notice. If the trader fails to comply, the NCA may take criminal proceedings. • Publication of a Consumer Protection List; a list of traders convicted of criminal offences, subject to court orders, bound by an undertaking, served with a compliance notice, or subject to a fixed payment notice. • The National Consumer Agency may also apply to the court for an order that requires a business to pay compensation for any loss or damage to the consumer resulting from an offence. Ms. Marshall

21. Small Claims Court • The aim of the Small Claims Court procedure is to provide an inexpensive, fast and easy way for consumers to resolve disputes without the need to employ a solicitor. The Small Claims service is provided in your local District Court office. • The claim cannot exceed €2000 • The current fee to apply is €18 • You can apply online or in your local District Court office. • The court will invite both parties to present their case before making a recommendation. This is private and informal. • The Small Claims Court cannot force an agreement but is very persuasive and will refer unsolved cases to the District Court for a hearing. This would be held in public and enforceable by law. Ms. Marshall

22. Recent Exam Questions • 2012 Q1HL Evaluate the role and the functions of the National Consumer Agency (NCA) in protecting consumers. (20 marks) • 2012 Q1 OLOutline two functions of the National Consumer Agency (15 marks). • Mocks 2012 HLDiscuss how the provisions of the Consumer Protection Act 2007 help protect consumer rights in the marketplace. Make reference to the NCA in your answer. (20 marks). Ms. Marshall

23. Recent Exam Questions • 2011 Q1 HL /2008 HL • Discuss the rights of the consumers under the terms of the Sale of Goods and Supply of Services Act 1980. • Illustrate two forms of redress available to consumers for breach of the Act (30 marks). • 2010 Q1 HLEvaluate the role of each of the following in protecting consumers:(i) The Small Claims Court (ii) The Office of the Ombudsman for Public Services (20 marks). Ms. Marshall

24. Recent Exam Questions • 2007 HL Q1 • Discuss the provisions of the Sale of Good and Supply of Services Act 1980 and evaluate its effectiveness. (30 marks). Ms. Marshall