- The actuality of digital consumer protection and online dispute resolution
In Hungary, digital consumer protection and online dispute resolution has never been more relevant than it is now and will be in the forthcoming period, bearing in mind that e-commerce is facing an explosive growth due to the Digital Prosperity Programme and the European Digital Single Market Strategy. In connection with that, the Arbitration Board of Budapest has been given a special role in the free and fast settling of disputes where the subject of the debate between a consumer and a business is in connection with online sales or services. Only the Arbitration Board of Budapest has competence to resolve disputes out-of-court between a Hungarian consumer and a trader established in the Union or between a Hungarian trader and a consumer resident in another country of the Union if it is connected to online shopping (financial disputes make an exception). -The whole process takes place online and the parties can settle their disputes from home, in front of their computers. -At the same time, they get additional support as in Hungary, the Arbitration Board of Budapest shall give assistance in order to help the parties involved in the online dispute resolution process if they do not understand something or if they are not aware of their rights and obligations. All this is because the European Commission has developed an online dispute resolution website which has been working for several months now, where complaints can be submitted online.
- Experience gained from traders
II.1. Traders are not aware of their obligations The content of requests for advice and information regarding the online dispute resolution process received by the Board is extremely versatile. Namely, a number of EU standards have been determined for companies involved in online sales, which they have to comply, so they must inform consumers in advance about the EU Conciliation website. It is clear from the questions received and answered, that:
- Businesses are not aware of their obligation to provide information
- A lot of traders asked us to name the background legislation and to give them the exact text which sets out these obligations
- They also asked for some guidance regarding their adaptation
II.2. Many traders requested guidance on the procedure and on digital consumer rights Many of them haven’t been aware that:
- In the online dispute resolution process, businesses have cooperation obligation and they must send their response in writing.
- The Board often helped them by explaining the exact process of the online procedure from submitting the claim to imposing the final closing decision by the Arbitraion Board.
- In addition, traders usually asked for help not only about the usage of the EU Conciliation website (ODR platform) but about their rights and obligations (and the interpretation of the legislation) associated with online shopping.
III. The common grievances and problems of consumers in online transactions III.1. Consumers mostly want information about their rights associated with online shopping and the online dispute resolution procedure Experience has shown that:
- As expected, many questions had been received about the usage of the online dispute resolution platform (this also shows that users have to be trained about their opportunities about the enforcement of their digital rights).
- Consumers still do not know exactly what rights and obligations they have while shopping online and they usually ask for information from the Board.
- Typically they do not consider how much they have to pay if they change their minds later while shopping online from a foreign webshop. In this case, if the business did not promise in advance to stand the cost of returning the package, they have to cover it, which can be a huge amount in different Member States.
- In some cases, for foreign consumers the problem was that their country have not set up a contact point. For example, France, Poland or Romania still does not have such organizations.
- Because of this, in many cases, foreign EU citizens turned to our national contact point and asked for help in order to enforce their digital rights
III.2. „rouge websites” can cause problems Like in case of domestic online transactions, it is also not unusual with foreign webshops that: -the business became inaccessible or its website did not work after the purchase, -in other cases the consumer did not receive the ordered product (this usually accompanies the cases above) - it is not a unique case either that if the website gives misleading information about a particular product, and its size, color or any other important attribute is different from the originally ordered one. III. 3. Many annoyances due to uncorrected, defective products Consumers asking for online help usually reports that:
- Products without sufficient quality had been sold to them which even went wrong after reparations
- Consumers often expressed their displeasure because an incorrect price appeared by mistake on the web shop’s website, and they cannot receive them on that price due to their exclusion of liability indicated in their standard policy conditions
- Consumers were interested many times what they can do, if the received product has faults
- In addition, we have answered questions in several other areas as well, for example, questions regarding travel matters.
- The variety of the products were also very broad: from durable goods to beauty products with insufficient quality, a number of different products had been featured in the palette.
III.4. Issues related to air transportation Rejection of compensation after flight delays and cancellations In may cases, the online dispute resolution proceedings (which took place in the EU Conciliation website) subject was connected to air transportation services. Both Hungarian and foreign consumers asked for help from the Arbitration Board of Budapest. They mainly turned to the Board for help because the business rejected their claim for compensation after a delay or a cancellation. -The incoming online applications show that businesses do not give compensation for damages due to flight cancellations either for example when a consumer is forced to take another flight because of a cancelled one. These are damages that typically worth hundreds of Euros. - The biggest harm that consumers complained about the most, was that because of the delay of their plane, they were not able to reach their connecting flight to their actual destination. - In case of cancellation or flight delay, however, it is not rare that the business takes responsibility and compensate the consumer. - It clearly shows that airlines only fulfill these claims if the consumer is able to demonstrate that the damage he suffered is actually incurred and also the amount of the claim for damages (for ex. an invoice about a journey, or costs of accommodations). The failure of the taking of the wanted service – incorrect orientation
- In many cases consumers cannot take the discounts offered by the business (such as club membership discounts) because they did not look for information beforehand about its detailed conditions.
- Some people launched an online dispute resolution process because they failed to use the priority boarding service for which they paid for.
The impact of recent events
- More and more people cancel their flights to EU countries for security reasons. In these cases, the service providers usually decline the reimbursement of the ticket prices.
- However, it happened many times that facts and circumstances reported by the consumer complied to an exemption pre-recorded in the GCC, nonetheless the refund of the ticket price failed. In the majority of online procedures, in these cases the dispute has been resolved as consumers later sent in documents which confirmed that the discharging events actually happened.
Inattention while booking or using a service
- Several complaints have been sent online because while making a reservation, consumers mistyped names, gave wrong information or had expired or invalid travel documents.
- It can cost up to hundreds of Euros or pounds for consumers to travel with invalid passport according to the claims. The airline’s practice is to only authorize the boarding if the consumer pay an extra fee, or they just simply reject it in this situation.
- In many cases the „check in” caused problems to consumers, because they did it on location, so it was only possible against extra payment. It also happened many times that a consumer was not able to travel at all. The reason was that the ticket price had been transferred too late and by the time it could have been registered to the system of the company, the reservation had been canceled.
- There had been a lot of problems with re-routing flights, because after the reservation has been made, consumers may comply with extra conditions.
- It happened more than once that despite paying the fee, the modification of the reservation did not happen. Without exception, the air passenger services remedied these cases.
III. 5. Defective products from the internet There was a relatively low number of cases which subject was online sale and purchase of products. These were mainly submitted because of the failure of durable goods. Experience with these cases are:
- Businesses usually violate their obligation to provide proof, which is valid for a mandatory one-year warranty period. According to the law, they must demonstrate that some consumer durables (usually if their price is more than 10 000 HUF) error happened after it had been transferred to the consumer.
- Still, webshops only rely on the opinion of the services they are under contract with, which content is usually objectionable.
- They are only about the fact of the failure and the automatic withdrawal of the guarantee, they not lay down any causal relationship or what kind of behavior is in the background, they do not reveal the method they used for testing either.
- In these and similar cases, the services opinion is not suitable for evidence (and the requirement of independence is also compromised), so the consumers need for repair or replacement can be well founded.
- Businesses behavior: a high degree of cooperation in the online dispute resolution process
To sum up the experience of the past more than three hundred cases of online dispute resolution procedure:
- traders are cooperative
- they respond to consumer grievances in writing and explain their observations, they make their evidence available to the Board
- In cases where infringement occurs, the demands can be remedied thanks to the procedure.