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Protecting Romania’s Consumer

de Rubin Meyer Doru & Trandafir     The Romanian Digest
Marţi, 19 februarie 2008, 16:14 English | Press Review

Introduction
Consumer protection was not exactly a concept that flourished during fifty years of Romanian communism, so it was no surprise that protecting consumers from unscrupulous merchants was not perceived as a high priority in the early ‘90’s by Romania’s early governments. Law no. 12/1990 regarding the protection of people against illicit commercial activities provided sanctions only for a few illicit commercial activities. However, two years later, as shoddy and dangerous products poured onto the market from all over the world, causing injury and financial damage to Romanians, the government moved to enact Government Ordinance no. 21 regarding consumer protection (hereinafter “GO 21”), which became the first legal act to provide for a real shield for consumers against the unfair practices of some merchants.

Although GO 21 was an important accomplishment, its provisions were still not tough enough to provide for the hard-hitting consumer protection that Romania’s newly emerging market required. Consequently, other legislative instruments in the field came into force, such as: the Consumption Code (hereinafter the “Consumption Code”), Law no. 363/2007 on combating unfair commercial practices between businesses and consumers (hereinafter “Law 363”), as well as several other regulations concerning: consumer contracts negotiated away from business premises, protection of consumers in the execution and performance of distance contracts (contracts concluded between parties in different locations by the use of alternative means of communication such as the Internet) and unfair terms in consumers contracts.

Consumers’ Fundamental Rights
Since 1992, the competent authority in the consumer protection field has been the National Authority for Consumer Protection (hereinafter “ANPC”), which has territorial offices throughout the country. The ANPC coordinates and carries out the strategy and policy of the Romanian government with regard to the enforcement of consumer protection in Romania, preventing and combating the practices that jeopardize consumers’ life, health, safety or economic interests.

While the ANPC is the central authority in the consumer protection field, GO 21 provides for the possibility to incorporate into the protection framework certain specified nongovernmental organizations to protect consumers’ rights and legal interests. These consumer associations may develop and implement projects for consumer education and information, and represent consumer interests in consultative bodies organized at the central and local level. They may also commence actions before competent courts in order to defend consumers’ legitimate rights and interests.

Associations for consumer protection can be organized both at the national level and at the local level. They are non-governmental not-for-profit organizations, registered according to the specific law in the area, having as sole purpose the defense of the rights and legitimate interests of their members or of consumers in general.

GO 21 provides consumers with the following fundamental rights:
a) to be protected against the risks of purchasing a product or a service that can jeopardize life, health or safety or which can affect their rights or legitimate interests;
b) to be fully and precisely informed on the essential characteristics of products and services so that they may take the most appropriate decisions;
c) to have access to markets which provide and ensure a wide range of quality products and services;
d) to receive damages for injuries generated by the lack of quality products and services, using, to this end, the means prescribed by law; and
e) to organize themselves in associations to defend consumer interests.

Moreover, there are certain legal rights that consumers enjoy which must be adhered to by merchants at the time of the execution of consumer contracts, such as:
a) consumers’ freedom to take decisions, which means that consumers are free to decide whether they want to conclude a contract or not, while, in turn, merchants are prohibited from imposing abusive contractual clauses into consumer contracts;
b) a consumer contract must include clear and precise provisions regarding the quality of products and services, warranties, price or credit conditions and interest payments;
c) consumers must be relieved of any obligations to pay for products and services which have not been sought and accepted;
d) consumers are entitled to receive damages for injuries caused by products or services which do not comply with the contractual terms;
f) the price for products or services must be previously established and it can be modified only based upon the consumer’s consent; and
g) consumers can notify consumer protection associations and appropriate government bodies of the infringement of their legal rights and interests as consumers and propose measures in order to improve the quality of products and services.

Agreements between consumers and merchants must not include abusive clauses. A clause is considered abusive if it has not been negotiated with the consumer and if it creates an imbalance between the parties’ rights and obligations.

In case of an infringement of the quality of the product or service described in a contract, consumers are entitled to require the seller to remedy or replace free of charge the product or service, and claim damages for deficiencies found within the warranty term. After the expiration of this term, consumers may still seek to have products with hidden defects that became apparent within the medium duration of use of the products, be repaired or be replaced. The term medium duration of use means that period of time within which long lasting products have to maintain their functional characteristics. The merchant must perform all necessary acts in order to make the product functional again, to replace products or to remedy services within the warranty period. The reimbursement of the price paid or the replacement of the purchased product or remedy of the service performed is undertaken by the merchant immediately after establishing the impossibility of using it in situations where the malfunction is not due to the consumer. In addition to the repair or replacement of defective products or services, the consumer is also entitled to damages in accordance with the contractual provisions or legal decisions.

There are certain specific legal requirements that any product or service must accomplish, and merchants are required to comply with all of them. In that respect, a product or service must be in accordance with the description on its label and it must comply with all qualitative requirements. Informing consumers of all the characteristics of the products or services represents another essential obligation for the manufacturer and the merchant.

The 2007 Consumption Code provides certain obligations for merchants such as:
- to place on the market only safe products and services;
- to behave fairly in all consumer relations; and
- not to engage in unfair commercial practices.
In addition, the following acts are also forbidden: the import, fabrication, distribution and commercialization of unsafe, false or counterfeit products or products which can detrimentally affect consumers’ life, health or safety; as well as conditioning a product’s sale to consumers on the purchase of other products; or any forced sale.

The Consumption Code also provides two new rights for consumers - the right to refuse to execute consumer contracts containing abusive provisions; and the right to use all of the enforcement rights provided by law. Sellers who fail to comply with the Consumption Code will be sanctioned by the competent authorities.

Unfair Practices
Law 363 became effective at the beginning of 2008. It includes new provisions to combat unfair commercial practices between traders and consumers and modifies a series of previous laws. Pursuant to Law 363, a consumer is defined as any natural person or group of natural persons organized in associations who perform activities other than commercial, industrial, manufacturing, artisan or liberal ones. Such liberal activities include the ones performed by lawyers, doctors or translators.  

Commercial practices developed by sellers in relation to consumers (hereinafter “commercial practices”) mean any commercial act, omission, behavior, measure or presentation, including advertising and sales, performed by such traders with regard to the promotion, sale or supply of a product or service to consumers.

An average consumer is defined as a person who is reasonably well-informed, attentive and prudent according to prevalent social, cultural and linguistic factors. A commercial practice is considered unfair if it is contrary to accepted trade practices in that particular field. Furthermore, a commercial practice is considered unfair if it has a detrimental influence on the commercial behavior of the average consumer with regard to a particular purchase, such practices being always assessed from the average consumer’s point of view.

According to Law 363, unfair commercial practices are grouped into two categories: fraudulent practices and aggressive practices.

Fraudulent Commercial Practices
Fraudulent commercial practices could be actions or omissions designed to defraud the consumer. A commercial practice could be considered fraudulent when it contains false or misleading information, or it is able to mislead the average consumer in their determinations regarding a specific transaction. Such false information could involve references to:
- the existence or the nature of the product;
- the fundamental characteristics of the product such as the production date or the composition of a product;
- the price or the method by which it has been established; or
- the scope and content of consumers’ rights.

Moreover, a commercial practice is considered a fraudulent activity if it has the ability to influence the decision of an average consumer to engage in a transaction. Basically, it causes the consumer to take actions he would not have taken were he to have been provided with all the information regarding the transaction from the beginning. The fraudulent activity creates confusion with regard to different products existing on the market, thus wrongfully influencing the choices of a consumer.

A fraudulent omission becomes an unfair trade practice when the seller fails to transmit or communicate to an average consumer the essential information regarding a specific product, a fact that the average consumer needs in order to determine whether to engage in a transaction and which fact, if known, would cause such consumer not to proceed with the matter. Also, there is a fraudulent omission when a merchant hides fundamental information or offers such information in an unclear, indiscernible or equivocal way.

Law 363 requires that sale offers must contain the essential information that the consumer needs in order to make an informed decision to purchase a product or service. This information must include, amongst other things, the main characteristics of the product, the identification information of the seller, the price, and the method of payment. The law also provides that the legal provisions regarding commercial presentations or advertisements also present such essential information. A list of such required representations is set forth in Annex 2 of Law 363.

Aggressive Commercial Practices
A commercial practice is considered aggressive if it restricts or is able to restrict in a significant way the freedom of choice or the behavior of the average consumer regarding a specific product using pressure in order to get the consumer to perform a transaction.

The elements that help to determine if a practice is aggressive are:
- the time, place, nature and/or the term of a practice;
- if the merchant is engaged in abusive speech or conduct, or if he threatened the consumer;
- the exploitation by the seller of a special condition which affects the rationality of consumer; or
- any onerous or  disproportionate obstacle, not provided for in the contract, imposed by the seller.

Conclusion
The consumer protection field has passed through gradual transformations culminating in Law 363/2007. Today, consumers in Romania can rely upon similar protections of law afforded to consumers in any EU country. Romanians can rightfully expect that the competent authorities will sanction merchants who fail to respect the rules set forth in the nation’s consumer protection legislation. In the field of consumer protection, Romania has reached a fair legislative balance between the rights of consumers and the needs of the marketplace.


The article was published based upon approval of:
Rubin Meyer Doru & Trandafir
SOCIETATE CIVILA DE AVOCATI / LAWYERS PROFESSIONAL CORPORATION
IN ASOCIERE CU / AFFILIATED WITH HERZFELD & RUBIN, P.C.
http://www.hr.ro























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