Work in key areas of Finland's Consumer Policy Programme will continue. Consumer credit, communications services, digital television and public services are this year's consumer law themes at the Consumer Agency. Attention will naturally be focused on basic market surveillance and timely phenomena as well.
The Consumer Agency is also updating its communications: this newsletter will bring news to readers more flexibly and faster, the business section of our website will be expanded particularly to meet the needs of SMEs and the front page will draw attention to timely matters.
Consumer credit under the magnifying glass
The marketing of consumer credit increased and hardened considerably last year. Traditional credit providers such as banks have emphasized consumer credit in their credit marketing, foreign actors have entered the market and distance selling of credit has increased. A new product on the market is small loans that are arranged with a text message and must be paid back in a short time.
Part of the trend is emphasizing fast credit. This is not always in harmony with the principle that consumers should have sufficient time and information to act intelligently: credit decisions are always more serious than day-to-day purchases.
The Consumer Agency wants discussion on the content and significance of responsible lending. How can consumers be expected to act intelligently if they are rushed into decisions? Payment difficulties, excesses and credit losses are not in the interests of consumers or credit providers. They can also be prevented using other means besides a maximum interest rate or a positive credit register, both of which have again been mentioned as possible means. They may seem to be simple solutions, but a maximum interest rate would stifle competition and according to previous studies a register would not prevent credit problems. The best thing for everyone would be to clarify matters in advance, before problems arise, which is a general principle in consumer law. Developing financial counselling is important and useful. The debt management programme aims to include financial counselling in all actors' work whenever this is appropriate and possible.
In practice minors are also offered opportunities to assume debt, although people under the age of 18 have limited legal competence. Responsible behaviour is put to the test when membership of the credit society begins at a young age. For example, minors can make purchases with a mobile phone and special credit cards are planned for children.
Gaps in consumer protection in communications services
The general principles of consumer law are gradually becoming established in communications services. A proposed reform of the Telecommunications Market Act contains important improvements, such as provisions on changes in contract terms and basic principles for correcting and compensating defects. When the Telecommunications Market Act comes up in Parliament, it would be important to view consumer law principles as an opportunity to make business activities and customer service more effective. If and when amendments come into force, preparing new standard terms will be a big effort in any case.
Expertise and practical interpretation assistance will be needed this year in matters regarding contract terms for subscriptions, tie-in marketing and contract terms involving 3G phones, applying distance selling rules to mobile phone sales and problems concerning the position of minors as subscription users. Since central billing for different services is increasing, it is important to get operators to develop itemized bills so that consumers can clearly see who is collecting charges, how much and for what service.
Questions concerning digital television are another focus for the Consumer Agency. So that consumers can shift to the digital age as smoothly as possible, we need clear and effective procedures for selling and problem situations. Consumers buying a digital receiver need more information than usual to support their decision, and sellers are in a key position. The Consumer Agency is revising its checklist for sellers and is working together with actors to develop flexible procedures to correct problems. The point of departure is that customers should be able to get problems with a digital receiver corrected without being given the runaround.
Benefit from consumer law principles in public services as well
Last year a survey was completed concerning how the Consumer Protection Act can or cannot be applied to changing public services. In recent years local authorities have introduced new ways of producing health care and social welfare services. This includes outsourcing, privatization and service vouchers. Although a service is arranged by a local authority and remains its responsibility, from the consumer's viewpoint the service is produced by a private business.
This year the Consumer Agency will prepare a recommendation for service orderers and producers that specifies the key consumer law principles whose application to public services would be necessary for customers and whose application would also benefit service producers, for example by improving customer service. Attention will be drawn to clear price information, defining service content and quality, rules regarding changes in contract terms, procedures for correcting and compensating defects, and fair consequences for people who have problems paying bills.
If a consumer has problems paying bills, for example, the general guideline in the private sector is to agree on a new payment schedule. For both parties this is much better than failing to pay and letting a bill go to collection, which causes work and costs on both sides. There is a need for a similar procedure in the case of taxes, for instance, if paying on schedule is not possible. The only way for a consumer to defer payment on taxes is to pay only part of what is due and let the remainder go to collection, however. This is not a flexible or fair procedure for a consumer who is unable to pay.
New procedures
In addition to these themes the Consumer Agency will continue to monitor, influence and report on other subjects. Attention will be paid to the marketing of flights and cancellation terms, bonus programmes, scams and marketing aimed at children. A number of important legislative projects are also under way, from class action suits to the reform of the Television Directive.
Last year the Consumer Agency began using a new system for basic market surveillance that is broken down according to sector and subject. This has produced clearer information on the application of consumer law and tools for day-to-day dealings. Our web pages for businesses contain practical instructions regarding when and how prices should be marked, how sales can be advertised, the difference between a guarantee and responsibility for a defect, and whether operating instructions must be supplied with a product.
The Consumer Agency receives over 4,000 contacts a year concerning consumer law. The reason is often poor customer service in case of claims, ignorance concerning rules or blatant disregard for rules on the part of businesses. The Consumer Agency bundles contacts according to subject and looks for the most effective means to get businesses to improve practices. This can be negotiations with central organizations, guidelines, bulletins or seminars on particular sectors or subjects.
Contacts are seldom dealt with individually nowadays, since the goal is to exert broader influence. The Act on the Consumer Agency obliges us to focus on areas that have considerable significance for consumers or in which problems are likely to arise.