Consumer and advertising laws have changed - and it's vital companies keep up

There are a range of overlapping regulations in Ireland that can be hard to follow.

By Wendy Hederman Partner, Mason Hayes & Curran

OVER RECENT MONTHS, we have seen increased enforcement in the areas of advertising and consumer protection.

Some businesses have struggled to get to grips with new Consumer Information Regulations, which came into effect in July 2014.

The first quarter of 2016 also saw the introduction of the new edition of the code of standards for advertising and marketing in Ireland, which is creating its own challenges for others.

The right to cancel 

The consumer regulations added to the already complex tapestry of consumer law obligations on traders selling to Irish consumers.

They specified certain mandatory information to be provided to consumers, before and after the conclusion of certain sales contracts, including distance contracts such as online or phone sales.

The information that has to be provided for these contracts includes:

  • The trader’s details – their name, address, contact info and other information
  • Details relating to the goods or services, such as the main characteristics, price, delivery arrangements and cost
  • Information about a consumer’s right to cancel the contract

It also extended consumers’ right to cancel to 14 days for off-premises or distance contracts. The Competition and Consumer Protection Commission is tasked with enforcement of the regulations.

In the first six months after their adoption, no enforcement was seen. However in 2015, the commission issued 12 companies with compliance notices in relation to the laws. This represented over 40% of all compliance notices issued during the year.

An electrical goods retailer, a department store and a number of telecommunication companies were found to be non-compliant, particularly when it came to incorrect or misleading information on consumers’ right to cancel.

For the companies involved, it had serious consequences. Some had to change their websites; others were obliged to notify their customers that they were entitled to cancel their contracts and how to do so. Such customers were consequently able to cancel their contracts when otherwise they would have been far out of time.

A new advertising code

The Advertising Standards Authority of Ireland implemented a new edition of its code in March 2016. The code aims to regulate commercial marketing communications and complaints may be made to the authority in relation to non-compliance.

The new code has notable new additions, such as added chapters dealing with gambling and e-cigarettes. It has also revised and updated existing sections, such as a very comprehensive update to the rules relating to the advertisement of food and non-alcoholic drinks, as well as new rules on environmental claims and on health claims.

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Already in 2016, the authority has found a breach of the code in over 85% of the complaints made. The majority of complaints upheld, at 62% according to its 2015 annual report, relate to misleading advertisements – once again demonstrating the importance of clear, honest and accurate communication.

Overlapping measures

Consumer law in Ireland is spread across a number of sometimes overlapping measures which can be complex for businesses to implement. An increasing enforcement focus on transparent communication, strict adherence to the cancellation rules and updated advertising standards demonstrates the importance for traders to carefully scrutinise sales terms and conditions, marketing communications and advertisements.

The potential for enforcement and associated fallout, including reputational and financial damage, makes the exercise an important one.

Wendy Hederman is a partner in commercial and technology law at Mason Hayes & Curran.

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