The legal term for a consumer to withdraw from a contract extends to 14 calendar days (if the consumer did not receive the proper information, the term extends to 12 months). Companies must show the final price before a transaction is complete, and the consumer must agree to the final price terms. In agreements occurring over the telephone, the consumer can only bind himself or herself once he or she has signed the offer or sent his or her written agreement by paper, fax, email, or text message. Additionally, the telephone lines that companies establish to communicate with their customers (i.e. 902 telephone numbers or customer service lines) must not be more expensive than the basic rate.
The Draft Law that amends the adapted text of the Ley General para la Defensa de los Derechos de los Consumidores y Usuarios (the Spanish Consumer Protection Act), currently in parliamentary procedure, introduces some important amendments that aim to protect consumers against unfair practices in distance-services contracting and online purchasing.
With this Draft Law, the Spanish legislation intends to comply with the European Directive from 2011 on consumer rights. It is a necessary Draft Law, given the significant growth of e-commerce and long-distance transactions occurring during recent years in Spain.
Main aspects of the Reform
- Information: The Draft Law requires companies to provide pre-contractual information to users and consumers — especially when they enter into a contract over some distance. This information must be clear and simple to understand.
- Right of Withdrawal: There are new guarantees on the possibility to desist or withdraw from a contract. Likewise, the term to exercise these rights extends from seven business days to 14 calendar days. If the consumer does not receive information about his or her ability to exercise this right, the term automatically extends to 12 months. The new Draft Law also incorporates a withdrawal form common in Europe, which makes exercising this right easier. The entrepreneur must provide the withdrawal form with the pre-contractual information.
- New Rights: The Draft Law gives consumers new rights regarding the form, delivery dates, and the risk of loss or damage of the purchased good, among others.
Main changes: General aspects
A broader meaning of the concepts consumer and user
- In the new definitions in the Draft Law, the concepts of consumer and user include all natural persons acting with a goal that is independent from their commercial, business, trade, or professional activity. Legal persons and entities without legal personality acting for a non-profit purpose in a field foreign to trade or business are also consumers and users according to the Draft Law.
- The concept of entrepreneur includes any legal or natural person (public or private — even those who act on behalf of another person or following another person’s instructions) who acts with any purpose related to his or her commercial, business, trade, or professional activity.
The new definition of the distance contract and the commercial premises concept
- The Draft Law incorporates a new definition of the distance contract. The distance contract definition covers all cases in which an entrepreneur and consumer or user enter into a contract under an organized distance sales or service-provision scheme exclusively through single or several communication techniques such as a mail order, the internet, telephone, or fax up to and including the moment when the contract expires.
- This definition also covers situations in which the consumer and user limits himself or herself to visiting the commercial premises of a company to gather information about the goods and services offered as well as the subsequent distance negotiation and execution of the contract.
- The definition also covers those situations in which there is personal and individual contact with the consumer and user outside the premises — even if the contract terminates immediately afterwards on the commercial premises of the entrepreneur or through a means of distance communication.
- Purchases made during an excursion that the entrepreneur organizes and during which he or she promotes and sells the products purchased are also contracts executed outside of the commercial premises.
- The concept of commercial premises also includes all kinds of facilities (shops, stands, or trucks) that the entrepreneur uses as a usual or permanent place of business.
Three other new aspects are also included:
Extension of deadlines for necessary information offered to consumers
The Draft Law reinforces the information due to the consumer and user by extending the requirements of pre-contractual information in contracts with consumers and users: distance contracts and off-premises contracts have been harmonised by the European Directive.
- Entrepreneurs must inform consumers and users of deposits and other financial guarantees as well as their conditions, if any exist, that must be paid or provided upon request of the entrepreneur.
- Entrepreneurs must also inform consumers and users about the existence of a legal guarantee of conformity relative to the goods and about after-sales services and commercial guarantees and their conditions, if any. In addition, regarding the supply agreements of digital content, entrepreneurs must inform consumers and users about the different possible uses of this content and any technical limitations.
- In distance contracts, information requirements are adapted for the technical restrictions of certain communication media for consideration. Limitations include the number of characters in some mobile telephone screens or the length of television sales advertisements.
- The Draft Law also regulates the formal requirements for distance contracts and off-premises contracts, and it includes a new requirement regarding commercial websites. Commercial websites under the Draft Law must indicate as clearly and legibly as possible at the beginning of the sales process at the latest whether there exist any supply restrictions and what the accepted forms of payment are.
Broader regulation of the right of withdrawal
Regulation of the amendments to the right of withdrawal:
- The creation of a standard model form, accessible online, through which the consumer can exercise this right.
- The extension of the deadline to exercise the right to withdraw from a contract from seven business days to 14 calendar days and even up to 12 months if the entrepreneur did not provide the information concerning the consumer or user’s right to withdrawal.
- The possibility that the company may require the consumer to pay refund costs if the consumer received information of this possibility.
- The company’s obligation to return all amounts paid by the consumer except for delivery costs higher than the costs of the standard delivery of goods within 14 days from the day the consumer expressed that he or she wished to exercise the right of withdrawal.
Measures against hidden charges
The Draft Law finishes with the hidden charges of online purchasing. Thus, from now on, companies must make clear the end price before the transaction concludes, and the user must agree to the price. The entrepreneur must ensure that the consumer, whenever he or she makes an online purchase, is aware that the purchase means an obligation to pay. In this way, the user will always have to accept the final price before the transaction is complete.
- The Draft Law imposes an obligation on entrepreneurs to provide information about the costs linked to means of payment, transportation, delivery, and other items before the consumer contracts. In this way, companies will have to show the final price before concluding the contracting process.
- Furthermore, regarding means of payment, an entrepreneur cannot charge a consumer a cost higher than the one the entrepreneur paid. An example of this is the online purchase of an airline ticket: the cost is always higher when payment occurs with a credit card.
- Therefore, if an entrepreneur does not comply with these requirements, the consumer will not have an obligation to pay the costs. Eventually, the consumer will be able to retrieve the difference between the initial and final costs.
This article is not considered as legal advice