Consumer protection - Legislation pre-empts EU directive

ON the face of it, the comprehensive reform of consumer legislation announced by Enterprise Minister Micheál Martin yesterday certainly is impressive.

Whether it transpires to be effective and practical and to the consumer’s benefit remains to be seen. Whether it lives up to the minister’s effusive description that it will provide the country with “one of the strongest and most modern consumer protections in the world” also remains to be seen.

It is to be hoped that his faith in the Consumer Protection (National Consumer Agency) Bill, which lists 31 different activities to be prevented under all circumstances, will not be misplaced.

The bill which will be published in the autumn, well in advance with next year’s General Election, places bans on things like pyramid selling, prize draw scams and sustained cold-calling, accompanied by possible fines of up to €120,000 and up to five years in prison.

The bill will also put the National Consumer Agency on a formal footing, and it will incorporate the current Office of the Director of Consumer Affairs. The agency comprised the main recommendation of a consumer strategy group established by the Government, but more than a year ago, the minister said it would not regulate prices or interfere in the marketplace.

Apart from that, he views the agency as a “powerful advocate on behalf of consumers”.

In view of the fact that his abolition last March of the Groceries Order, which banned the sale of groceries below their wholesale prices, led to no significant benefit to the consumer, it is hardly surprising that consumer confidence here has been sliding.

The measures announced by Mr Martin were billed as the biggest reform of consumer protection in 30 years, which is indicative of how badly the legislation needed to be overhauled.

If sufficient and supportive resources are put in place to be meaningful, then anything to outlaw advertising aimed at children, false claims for products or services and other scam-preventing measures will be welcomed.

A major influence in taking action to close down pyramid selling has been the public outcry it caused recently.

Earlier this year, opposition politicians had called on the Government to address this insidious problem but, importantly, the gardaí had made a written submission to the minister on the issue.

They were effectively emasculated by the current Pyramid Selling Act 1980, under which they had no power of warrant to search a person or premises, to make arrests or to detain people under Section 4 of the Criminal Justice Act to facilitate a proper investigation.

The old act was hopelessly ineffective in preventing the recent schemes which spread through West Cork, Kerry and Clare, in which the majority of investors lost considerable amounts of money.

Hopefully, the gardaí’s advice about putting in place legislation to stamp pyramid schemes out, and variants of them, will be included in the new bill, and they will be given sufficient powers as they requested to protect a vulnerable public.

In any case, the European Union intended to issue a directive to make pyramid selling illegal, although it might have taken as long as two years for it to come into force.

In dealing now with the issue, and other protections announced yesterday, the minister may have been anticipating another tranche of EU legislation which has to be adopted into Irish law by the end of 2007.

That is the Unfair Commercial Practices Directive, the aim of which, to quote the minister on another occasion, is “increased protection for the consumer” which includes the outlawing of gifting schemes.