Legal protection

The Consumer Information Act 1978 protects consumers against false or misleading claims about goods, services and prices. The National Consumer Agency can prosecute offenders under this Act. Under the Liability for Defective Products Act 1991, producers are liable for injury or damage caused by their defective products or defective components, irrespective of whether there was any negligence in the manufacturing process. Consumers have only to prove that there was an injury and that it was caused by a defect in the product. Proving that the producer was negligent is no longer necessary.

The 2007 Consumer Protection Act

The new Consumer Protection Act is claimed to be the most significant piece of consumer protection legislation in 30 years.

What are the main provisions of the Act?

• It formally establishes the National Consumer Agency (NCA) as a statutory agency and transfers the functions of the Office of the Director of Consumer Affairs (ODCA) to the NCA.

• It replaces the existing body of consumer legislation, including two acts that had been in place for over 100 years.

• It revises the law in relation to pyramid selling, making it an offence to establish, operate, promote or participate in a pyramid promotional scheme.

• It transposes into Irish law the provisions of the European Union's Unfair Commercial Practices Directive (Directive No 2005/29/EC of the European Parliament and of the Council of 11 May 2005).

What is the EU Unfair Commercial Practices Directive?

This is an EU Directive that contains four main consumer protection provisions:

• a general prohibition of unfair commercial practices

• a specific prohibition of misleading commercial practices

• a specific prohibition of aggressive commercial practices

• a 'blacklist' of 23 misleading commercial practices and 8 aggressive commercial practices that are unfair in all circumstances.

This Directive is a maximum harmonisation measure and therefore Member States are not allowed to extend or exceed its provisions.

What new criminal offences are created by the act?

As well as pyramid selling, a number of new criminal offences are created by the Act and
proceedings may be brought up to two years after the commission of the offence. These include:

• making false claims about the price, characteristics and availability of a product or service

• putting pressure on a consumer to enter into any particular transaction, such as intimidating sales tactics, the use of threatening or abusive behaviour, or making it unnecessarily difficult to end a contract or switch to another provider

• 'baiting' customers by advertising for sale products which are not available

• pyramid selling

• prize draw scams

• certain types of advertising directed at children

• persistent and unwanted cold calling of consumers.

A number of other specified practices are also prohibited, e.g. pretending that you are a signatory of a code of practice when you are not, or leading consumers to believe that you are about to close down when you are not. Practices which mislead consumers or otherwise impair their ability to make a free choice will not be allowed.
The Act also outlaws the practice of charging consumers more for using different methods
of payment.

What happens to traders who break the law?

Under the Act, traders who mislead consumers could face on the spot fines of up to €60,000 or 18 months in jail. Those involved in pyramid selling schemes face penalties of up to €150,000 and five years' imprisonment.
However, most offences are likely to be dealt with summarily, with penalties of up to €3,000 and/or six months in jail for a first offence. Courts will be given the power to order offenders to pay compensation and to publish corrective statements. A director who consented or connived in the act complained of may also be prosecuted.
In addition, the NCA will be required to publish regularly a list of all traders who are fined or penalised.

Does the NCA have more powers than the ODCA?

Yes. In addition to the existing ODCA functions, it has been granted greater enforcement powers and extra resources than was available to the ODCA. For example, if the NCA believes a trader may have committed an offence, it can issue a fixed penalty notice to the trader. If the trader does not pay the penalty within the specified time, the NCA may initiate court proceedings in the normal way.
The Agency is empowered to advise and make proposals and recommendations to Government on legislation that impacts on consumers, and will interact with other regulatory bodies.