As 2015 comes to a close, the e-commerce industry is expected to make €185.39 billion this year. In the EU, the average online shopper spends €970 yearly, and these numbers continue to grow annually. EU Directive 2011/83/EU details the rights of EU consumers when shopping online and was transposed into Maltese law through Legal Notice 439 of 2013.
These regulations do not apply to contracts for gambling, social services and healthcare, financial services, construction of new buildings or rights over immovable property, package holidays and tours, food and beverage contracts or other consumables, or any contracts which were concluded before the 13th of June 2014.
Before a consumer can be bound by a contract, the seller must provide the following information in a clear and straightforward manner:
- Main characteristics of the product or service
- Name and address of the seller
- E-mail address and/or telephone number
- Total price including all additional costs, such as delivery, or if this cannot be known in advance, information on how such costs can be calculated
- Information about payment and delivery procedures, particularly any delivery restrictions that might apply to certain countries
- The right of the buyer to withdraw from the contract
- After-sales service which is available
- Duration of the contract
- Any dispute resolution mechanisms that will apply if such issues arise
- Trade register number
- Professional titles and VAT details, if applicable
- Professional association to which the provider belongs, if applicable.
The burden is on the seller to prove that the abovementioned information was indeed given in an adequate manner.
The right of withdrawal
With regards to the right of withdrawal, the buyer has a fourteen-day period within which he can withdraw from the contract without giving any particular reasons, and without incurring any additional costs. However, such buyer, if withdrawing, must not take longer than the prescribed 14 days to send the item back and claim reimbursement. It is expected that the consumer must physically handle the goods in order to establish the nature, characteristics and functioning of the goods before deciding whether to keep the goods or send them back. However, if the consumer goes over and above this and uses the goods to such an extent that the value of the goods has diminished, then he is liable for such diminished value.
This fourteen-day period starts to run as of the day of the conclusion of the contract in the case of service contracts, and on the day the buyer acquires physical possession of the goods in the case of sales contracts.
On the other hand, if the buyer was not informed of his right of withdrawal, such period is extended to 1 year. In this case, the burden lies with the consumer to prove that this right was exercised in accordance with the law. The seller must reimburse all payments received, including the costs of delivery, and he has the right to suspend reimbursement until he has reacquired the goods, or received proof that they have been sent back, whichever is earliest.
There are some exceptions to the right of withdrawal:
- In the case where the goods purchased were tailor made to the buyer’s specifications
- Where the value of the item is dependent on the fluctuations of the market
- Where the goods acquired expire or deteriorate quickly
- If the goods are sealed for the purposes of health or hygiene and the buyer has unsealed them
- Goods which are, after delivery, according to their nature, inseparably mixed with other items (e.g. fuel)
- Contracts where the buyer requested a visit from the seller so as to carry out urgent repairs or maintenance
- Sealed audio/video recordings or sealed computer software which the buyer has unsealed after delivery
- The supply of a newspaper or a periodical magazine (unless this is a subscription contract, in which case the right of withdrawal still stands)
- Contracts concluded at a public auction
- The provision of accommodation other than for residential purpose, transport of goods, car rental services, catering or services related to leisure activities if the contract provides for a specific date or period of performance
- Digital content which is downloaded
Unless the parties have agreed otherwise, the seller has the obligation to deliver the goods concerned by 30 days from the date of the contract. If the goods are not delivered, the buyer must inform the seller of this and allow for an extra grace period, and if the seller fails to deliver the goods once again, then the buyer has a right to terminate the contract. If the parties have agreed that the product or service is to be delivered by or on a specific date, and the consumer has made it known to the seller that delivery by or on such date is essential, and the goods are not delivered within this time limit, then the buyer has the right to terminate the contract immediately. Upon termination, the seller must reimburse the buyer for all expenses.
Other obligations of the Seller
Sellers are prohibited from charging buyers a fee for the use of any type of method of payment. Pre-ticked boxes, which could sometimes trick consumers into buying something they did not want, are now banned. If a consumer is not clearly informed of any charges that will apply before making a purchase, then they are not obligated to pay. The seller shall ensure that the buyer is aware, when placing the order, that an obligation to pay will ensue. This can be done, for example, through the use of a button which reads “confirm and pay”. If sellers operate a hotline for consumer complaints or queries, they are not allowed to charge more than the basic rate applicable for calls made.
In Malta, Legal Notice 439 of 2013 which directly transposes these regulations into our Consumer Affairs Act, specifically states that an administrative fine of between €500 and €47,000 may be imposed on any person who fails to comply with any of the provisions of these regulations.