Filenews 20 October 2024 - by Eleftheria Paizanou
Consumer rights are strengthened during the green transition so that consumers know if they are environmentally friendly when buying products.
With a bill prepared and to be promoted by the Ministry of Commerce, Cypriot law is harmonized with the European Directive on empowering consumers for the green transition through better protection from unfair practices and information.
The draft bill, which was put to public consultation, also includes rules that will strengthen consumer protection in order to tackle unfair commercial practices that mislead consumers and prevent them from making sustainable consumption choices.
Among others, they concern practices linked to the premature obsolescence of goods and/or information on their durability and misleading, unreliable and/or false environmental claims ('greenwashing').
At the same time, the new regulations will concern misleading information about the social characteristics of traders' products or businesses or opaque and untrustworthy sustainability labels. In particular, consumers will have the right to know how long a product is designed to last and whether it can be repaired in the future (durability and reparability).
Environmental characteristics
In particular, according to the draft law put to public consultation, where a trader provides a service by which it compares products and provides the consumer with information on environmental or social characteristics or circularity aspects, such as durability, reparability or recyclability of products, then information on the method of comparison, the products being compared and the suppliers of those products, as well as the measures applied to update them, shall be considered as material information.
The warranty of the product will have a minimum duration of two years. It is worth noting that where the producer offers the consumer a commercial guarantee of durability, at no additional cost, covering the entire good for more than two years and makes this information available to the trader, information that the good has that guarantee, its duration and a reminder of the existence of the legal guarantee of conformity; This should be done in a conspicuous manner.
In relation to goods with digital elements, digital content and digital services, the producer or provider should have the information available to the trader regarding software updates.
Consumer information
The draft bill includes a provision for informing consumers. In order to ensure that consumers are well informed and can easily understand their rights, a harmonised information notice will be issued. This notice should include the main elements of the legal guarantee of conformity, including its minimum two-year duration, as specified in the Certain Aspects concerning Contracts for the Sale of Goods Law, and a general reference to the possible duration of the legal guarantee.
A second draft bill harmonizes with the European Directive on credit agreements for consumers. This Directive on consumer credit aims to adapt consumer credit to the new forms of credit available online and the risks that exist.
The bill also removes some vague wordings that existed in another repealed European Directive and which had enabled Member States to adopt divergent provisions.
Among other things, the European Directive provides for the following:
- Achieving greater harmonisation of consumer credit agreements by promoting a more uniform approach to granting credit to consumers in different Member States and ensuring an adequate level of consumer protection across the EU.
- The extension of the scope in relation to Directive 2008/48/EC by including, inter alia, credit agreements with a total amount of credit below €200, credit agreements where the credit is granted interest-free and without any other charges, credit agreements with a total amount of credit up to €100,000 and credit agreements with crowdfunding credit service providers.
- Putting in place measures to ensure that consumers are informed in a clear and comprehensible manner about the terms and conditions of their credit agreements, enabling them to make prudent financial decisions.
- It will help reduce over-indebtedness by raising consumers' awareness of the costs associated with granting credit, through the mandatory provision of certain information by creditors and credit intermediaries, even at the advertising stage.
- It also provides for the mandatory assessment of consumers' creditworthiness, the provision of adequate information to consumers on credit agreements and any ancillary services, and the determination of how to exercise the right of withdrawal and the right to early repayment.
Clear warnings on credits
According to the draft law, any advertising concerning a credit agreement should be fair, clear and not misleading.
Any wording which may create false expectations to a consumer as to the availability or cost of the credit or the total amount payable by the consumer shall also be prohibited.
Also, any advertisement for a credit agreement should include a clear and prominent warning informing consumers that borrowing costs money, using the wording "Attention! Borrowing money costs money" or equivalent warning.
Any advertisement for a credit agreement which indicates an interest rate or any figures relating to any cost of the credit to the consumer shall include the standard information.
That standardised information should be legible or clearly audible, as appropriate, and adapted to the technical limitations of the medium used for advertising.
The borrowing rate, whether fixed or variable or both, together with information on possible charges included in the total cost of the credit to the consumer, the total amount of credit, the annual percentage rate of charge, the duration of the credit agreement and the total amount payable by the consumer and the amount of instalments to be made clear in a clear manner.
Finally, a third draft law was prepared which regulates, inter alia, issues related to the exercise of the right of withdrawal from distance contracts concluded through an online interface and rules on financial services contracts concluded at a distance (e.g. online).
