If large numbers of consumers have suffered losses caused by unlawful activities by a company, being reimbursed may continue to require a lengthy legal process. There are plans to improve the protection of consumers’ legal protections through legislative change, but a proposal by the working group of the Ministry of Justice on the implementation on the EU Representative Actions Directive does not serve this purpose. In its statement (in Finnish) The FCCA considers the trend to be worthy of concern.
“Finland has wanted to profile itself as a pioneering country with a high level of consumer protection. Unfortunately, this is not reflected in this legislative reform. The proposal only goes halfway, and it does not improve the possibilities of the Consumer Ombudsman to act in a manner that secures consumers all of the reimbursements that they are entitled to for unlawful procedures.”
Model of two legal processes takes time and resources
From the consumer’s point of view, applying for reimbursements is made difficult especially by the fact that the process takes place in two separate court systems. Under the proposal, this would not change. The Market Court would handle representative actions applying for prohibitions affecting businesses. Even if the Market Court declares an activity to be unlawful and bans it, the consumer would be reimbursed for losses only if the company agrees to the matter voluntarily. In other cases, the reimbursements require a new process in a general court as a class action. Each consumer must sign up for a class action separately. This process takes several years.
Prohibitions and reimbursements can be applied for by a unit authorised to represent consumers – an official supervisor, or an association that meets certain criteria. The EU has found it expedient for an authorised unit to apply for both a ban on unlawful activity, and reimbursements for harm that has been inflicted. However, the EU Representative Actions Directive is not a fully harmonizing Act, and member states can use their own discretion in the implementation. This makes it possible to implement the model that the working group proposes.
Prohibitions and reimbursements could be combined now
In the view of the FCCA, the working group should have proposed a greater role for the Market Court already now. In certain cases, the Market Court could easily confirm both a prohibition and the compensations paid to consumers. Numerous EU regulations and legal guidelines already exist to support this. They define how consumers are reimbursed when the actions of an entrepreneur have been unlawful.
“We hope that there would be the will in Finland to include new kinds of solutions in its consumer protection to make legislation work more efficiently. It would also be high time for consumers to have a real chance at getting the reimbursements that they are entitled to when a company violates consumer legislation and fails to fix the situation voluntarily.”