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Loi relative à la consommation : B2C aspects, what changes in the relationships between professionals and consumers ?
Article IT et données personnelles Droit de la propriété intellectuelle, média et art Droit de la concurrence, consommation et distribution Contrats commerciaux et internationaux | 19/03/14 | 8 min. | Mahasti Razavi
After several months of parliamentary debates and a judicial review by the “Conseil Constitutionnel” (i.e. French Constitutional Council), the French Loi relative à la Consommation dated March 17, 2014, also known as the “Hamon Act”, has just been published. This very dense law includes a large range of measures aiming at restoring and improving consumers’ confidence.
The Hamon Act transposes into French law the provisions of European Directive no. 2011/83/EU of October 25, 2011 on consumer rights and accordingly reinforces the protection offered to consumers under French law.
As a preliminary comment, the Hamon Act introduces into the French Consumer Code a definition of “consumer”, which until now was mostly defined by case law and thus subject to uncertainty. It is now clearly stated in the law, in accordance with the latest case law and the 2011 Directive, that a “consumer” is “any natural person who is acting for purposes which are outside his/her trade, business, craft or profession”.
This being said, and without the following presentation aiming to be exhaustive[1]
, the Hamon Act mainly focuses on 5 major issues:
1. Restoring the balance of powers between consumers and professionals
To this end, many key measures are adopted:
- Introduction of the much awaited class action procedure “à la française” which will apply to disputes arising under consumer law and to some competition law disputes. However, such class actions may only be introduced by government-approved consumer protection associations and may only compensate material damages suffered to the exclusion of any other immaterial harm (moral, physical injury etc.). For more details, please refer to our previous news flashes of March 14 and 17, 2014.
- The protection against unfair terms is reinforced: if a judge finds that a clause of a contract is abusive /unfair and deems it unwritten, it can deem unwritten the same clause in all similar contracts concluded by the same professional with other consumers.
- In order to allow consumers to confront the competitors of the insurance market and to prevent multi-insurance risks, insurance contracts may now be terminated more easily by consumers.
- Pre-contractual consumer information is reinforced, whatever the type of contemplated sale (selling of goods or services, in-store selling or distance and off-premises selling, doorstep selling). Sellers should – for instance – prior to the conclusion of any contract, provide consumers with clear and comprehensive information, and confirm in writing, the period during which the spare parts that are essential for the use of the goods will be available on the market. Sellers will be required to provide consumers with such spare parts during the indicated period. Furthermore, where a contract is not immediately performed, sellers must indicate a deadline for the delivery of the goods or the performance of the services.
- Another important change regarding legal guarantees: the presumption of non-conformity of goods will be extended from 6 months to two years as of the delivery of the goods. However, this measure will only come into force 2 years after the publication of the Act.
2. Securing distance and doorstep selling
The pre-contractual information to be provided in case of distance and off premises contracts or in case of doorstep selling is reinforced, notably concerning the existence and conditions of the right of withdrawal, the accepted means of payment, the delivery restrictions, etc.
The withdrawal period is extended from 7 to 14 days. When the right of withdrawal is exercised, the seller shall reimburse all payments received from the consumer within 14 days, instead of 30 days, subject to late-payment penalties provided in the text[2]. However, it should be noted that the list of exceptions to the right of withdrawal has been extended in order to add, in particular, the cases where goods are not suitable for return due to health protection or hygiene reasons, or where goods are inseparably mixed with other items, the cases of sales by public auctions or sales of certain alcoholic beverages. Concerning newspapers, periodicals or magazines, they are excluded from the right of withdrawal, except for subscriptions to such publications.
“Cold calling” is better controlled. In particular, an “anti-cold-calling list” is created, identifying the consumers who expressed their refusal to receive these types of calls. Moreover, in case of cold calling, the use of an unknown number is expressly forbidden.
The seller must undertake to make the delivery within a reasonable period, which cannot exceed 30 days as of the conclusion of the contract.
Forced sales, notably those carried out by means of pre-ticked boxes, are expressly forbidden. Therefore, if consent is given “by default”, the consumer can claim full reimbursement of the sums paid in this respect.
3. Giving lenders a sense of responsibility and preventing over-indebtedness
Consumer information concerning the repurchase of consumer loans is reinforced.
Furthermore, sellers that offer consumers the possibility to buy on credit must now systematically offer a redeemable loan as an alternative to the revolving credit, even if there is no express request from the consumer, and this, as soon as the loan amount reaches the limit fixed by decree. This offer must include information allowing the consumer to clearly compare the functioning and the cost of both proposed loans.
Moreover, when the revolving credit comes with a credit card, which entitles one to all types of advantages, the benefit of these advantages cannot be conditional on a credit payment. The card must allow the consumer to pay cash. Large scale distribution brands which offer a program that comes with all types of advantages and include a revolving credit will now also have to offer another program which includes all types of advantages but which are not tied to a loan.
Finally, it should be noted that the planned “registre national des crédits aux particuliers” (i.e. national register of consumer loans), the purpose of which was to prevent over-indebtedness, has been declared unconstitutional by the Conseil Constitutionnel in its decision of March 13, 2014[3] as it considered that such register would disproportionately violate privacy rights.
4. Reinforcing the means of control and sanction
In order to render their controls more efficient, the agents of the DGCCRF[4] will be able to use “mystery” control method and may defer the disclosure of their identity and/or use a fake identity.
The DGCCRF can also, in specific cases, directly sanction professionals that infringe the applicable law and impose administrative sanctions (injunctions and administrative fines). Moreover, these sanctions can be published.
The means of control of the CNIL[5] have also been reinforced, allowing the latter to make any “useful finding” online.
Finally, the collaboration between the DGCCRF, the CNIL and the Courts is encouraged and strengthened.
5. Reinforcing sanctions and protecting consumers against the most serious abuses and restrictions
Certain sanctions have been significantly increased, in particular the sanctions for economic fraud, misleading and aggressive commercial practices, abuse of a state of weakness and abusive doorstep selling.
[1]It is difficult to synthetize this Act given the diversity of its measures. In particular, the following will not be addressed herein: measures relating to the mandatory indication of the country of origin of meat, geographical indications for manufactured goods, sanctions concerning the labels in the Agro-food industry, parking fees, airline ticket sales, transportation and housing services, commercial catering, gas service station containers, the supply of gas and electricity, contracts entered into at exhibitions and trade fairs, contracts for the purchase of precious metals, timeshare, electronic cigarettes, the sale of glasses and contact lenses via Internet, the sale of pregnancy tests in supermarkets, or leisure chauffeur-driven cars, lotteries, etc.
[2]The amounts to be paid shall be increased by the legal interest rate if reimbursement takes place maximum 10 days after the expiry of the 14-day period, by a 5% interest rate if reimbursement is 10 to 20 days late, by a 10% interest rate if reimbursement 20 to 30 days late, by a 20% interest rate is reimbursement is 30 to 60 days late, and by a 50% interest rate if reimbursement is 60 to 90 days late.
[3]Cons. const., March 13, 2014, n° 2014-690 DC
[4]Direction Générale de la Concurrence de la Consommation et de la Répression des Fraudes: The French Competition, Consumer and Fraud Control Authority.
[5]Commission Nationale de l’Informatique et des Libertés: The French Data Protection Authority.
Mahasti Razavi, Partner
Chloé Minet, Counsel