Dealing with cross-border consumer complaints - The European experience

1. Dealing with cross-border consumer complaints - The European experience Peter Fogh Knudsen Director of European Consumer Centre Denmark ODR and Consumers 2010 Vancouver, Canada 2-3 November 2010

2. What I am going to talk about • What the ECC-Net is • How the ECC-Net deals with complaints • Problems faced when trying to settle complaints • Cross-border ADR in Europe • Where we need ODR the most • Some basic ODR requirements • The ideal ODR?

3. What is the ECC-Network? • ECC-Net = The European Consumer Centres Network • An EU-wide network consisting of 29 centres, one in each EU member state + in both Iceland and Norway

4. The aim of the ECC-Network • The Network was set up by the European Commission and member states • It is co-financed by the Health and Consumer Protection Directorate General of the European Commission and by the member states • The main aim of the ECC-Network is to create consumer confidence in the Internal Market • To assist consumers with cross-border complaintsis one of the key objectives of the network

5. Case statistics 2005-2009

6. Complaints and information requests

7. Statistics on selling method

8. Selling method in %

9. Complaint handling – what can we do? • The ECCs can • Offer legal and practical advice • Direct the consumer to a dispute resolution scheme or propose other solutions • Contact a company for the consumer in another European country • The ECCs do not have any legal power

10. ECCs and the language issue • All European consumers have a national ECC • A complaint form available in all languages makes it possible for consumers to complain in their own language • Through the whole process the consumer can communicate in his own language • Where necessary the ECCs offer translation services

11. Theoretical cross-border case handling – the ECC-Networkcooperating with ADR Source: Knudsen Laine F. Practical Problems of Consumer Cross-border Complaint Handling in the European. In: ACTA UNIVERSITATIS LATVIENSIS “Economics and Management”,  Volume 754.  Riga: University of Latvia, 2010.

12. Real cross-border case handling – the ECC-Network cooperatingwith ADR Source: Knudsen Laine F. Practical Problems of Consumer Cross-border Complaint Handling in the European. In: ACTA UNIVERSITATIS LATVIENSIS “Economics and Management”,  Volume 754.  Riga: University of Latvia, 2010.

13. How many cases are solved?

14. Why are some cases not solved?

15. What does this service cost? • 153 full-time employees • An average of 5,25 per country • €8,1 million = $11,1 million • Half paid by the EU Commission, half by the member states • The service is free of charge for consumers and traders

16. Problems faced when trying to settle complaints • Traders not responding • Traders not complying with the law • Disagreements about the facts of the case • The burden of proof – expert opinions • Disagreements about the legal issues of the case • Lack of enforcement

17. Cross-border ADR in Europe

18. Analysis of received and forwarded consumer complaints in the ECC-Net from 2007 – 2009 Source: Knudsen Laine F. Practical Problems of Consumer Cross-border Complaint Handling in the European. In: ACTA UNIVERSITATIS LATVIENSIS “Economics and Management”,  Volume 754.  Riga: University of Latvia, 2010.

19. Reasons why cases are not transferred to ADR • No competent ADR • ADR with only regional competence • ADR requires that trader is a member of a certain trade association • ADR requires that the trader accepts ADR-handling on a case by case basis which the trader does not • Consumer not interested due to fees at the ADR

20. Where we need ODR the most 20

21. Nature of complaints 21

22. Product/service complaints specified 22

23. Delivery complaints specified 23

24. Contract terms complaints specified 24

25. When can ECCs transfer to ADR • The ADR needs to be notified = it needs to meet certain requirements

26. Basic ADR principlesRecommendation 257/98 + 310/2001 • Principle of independence • Principle of transparency • Adversarial principle • Principle of effectiveness • Principle of legality • Principle of liberty • Principle of representation

27. It is not impossible!The Danish experience • Consumers can complain about almost anything • Most areas are covered by private complaint boards set up in cooperation between business- and consumer organisations • Remaining areas are dealt with by a national, public complaints board • The consumer complains online • The consumer pays a small fee to have the case dealt with

28. The Danish experience continued • The cases are dealt with in an online system that both the consumer and the trader can access • Lawyers are preparing the cases • The cases are dealt with no matter if the trader participates or not • If an expertise is needed the ADR calls on experts to make this and the ADR pays for this • Decisions are made by a board with two consumer representatives, two business representatives and a judge • Decisions are based on law

29. The Danish experience continued • The trader has 6 weeks to inform if he will follow the decision • If the trader does not reply or if he agrees the decisions is binding as a court ruling • If the trader informs the board that he will not follow the decision the consumer is offered to have the case brought before the courts with the expenses paid for by the state • Traders not following the decisions of the board are blacklisted • Traders who lose a case pays a fee of between 800 and 3,000 dollars depending on the ADR • The fees are enforceable

30. Questions?

31. Contact details Peter Fogh Knudsen Director European Consumer Centre Denmark Amagerfaelledvej 56 DK-2300 Copenhagen S Phone: +45 32 66 90 06 E-mail: pfk@forbrugereuropa.dk www.forbrugereuropa.dk