FCCA report: Consumers and companies only partially familiar with basics of consumer protection

According to a study by the Finnish Competition and Consumer Authority (FCCA), consumers and companies are relatively familiar with consumer rights. However, companies were poorly informed about consumer protection in online shopping, while consumers had misconceptions about the right to return purchases in particular.

The FCCA has investigated how well businesses and consumers know certain facts related to consumer protection and consumers’ rights. The study is based on the 2017 Consumer Conditions Scoreboard produced by the European Commission, which demonstrated that both businesses and consumers in Finland are not as familiar with consumer protection as before. In fact, the objective of the study was to find out which issues consumers and companies were the most uncertain about.

The study was implemented by using interview forms, which had simple questions about various situations in consumer sales. Shop managers or supervisors at specialty shops selling electronic and domestic appliances were selected as representatives of companies, because these fields have a lot of consumer sales and they also often encounter issues related to warranties and liability for defects. A total of 205 interviews were conducted. The consumer survey was implemented by telephone interviews, which included 1,038 respondents aged between 18 and 84. The data was collected by Online Test Finland Ltd., commissioned by the FCCA.

Compensation for defects is familiar, uncertainty in warranty issues

As a rule, companies were mainly well-informed about situations involving defects. However, one quarter of the respondents erroneously believed that consumers have 7 days to file a complaint after discovering that the product is defective. In reality, there is no specifically determined period for filing a complaint, but it must be done within a reasonable time frame.

Almost all companies and consumers knew that consumers can complain about defects in a product and receive compensation even without a receipt if they can prove the time and place of purchase by other means. Both groups of respondents also knew that in case of a defect, the seller has the right to try to repair the item first.

Both companies and consumers had misconceptions about warranties. Over a half of the companies believed that issuing a warranty for goods is always required by law, even though this is not the case. Most companies knew that consumers have the right to complain about a defect in the product and the possibility to receive compensation even after the warranty has expired. In contrast, only a little over half of the consumers were aware of this.

Uncertainty about online shopping, misconceptions about the right to return purchases from shops

Companies were the least well informed about issues related to online shopping. Over a half of the companies could not say if a consumer who cancels a purchase from an online shop can be obliged to pay the return costs of the item and whether it is possible to limit the consumers’ right of cancellation. Charging the return costs is allowed if the consumer was informed about it before purchase, but the right of cancellation can only be limited based on the exceptions mentioned in the Consumer Protection Act.

As for consumers, they had misconceptions about returning and cancelling purchases in particular. Over half assumed that a non-defective product purchased from a shop can always be returned, even though this is only possible if the company has granted the right to return and exchange non-defective products. Over 40% of the respondents believed that they always have the right to cancel purchases made by telephone and from online shops. In reality, cancellation is only possible under certain conditions.

Consumers were also poorly informed about the fact that consumer protection does not apply to a sale between two private individuals. Only 16% knew that if defects are found in a used car purchased from a private individual, a consumer cannot appeal to the Consumer Protection Act or receive help from the Consumer Advisory Service. In future, recognising this difference will become increasingly important, because sales between private individuals are likely to increase when the marketplaces of the platform economy and sharing economy become more popular.

The FCCA intends to make use of the results of the study in its communications and cooperation with interest groups.

“A functioning market requires that both consumers and companies are familiar with the basic principles of consumer protection. In that case, consumers know how to exercise their rights in full. As for the companies, they can save time and money and increase customer satisfaction,” says Katri Väänänen, Assistant Director of the FCCA.

Do you know the basics of consumer protection?

  • The Consumer Protection Act does not apply to a sale between two private individuals, and the Consumer Advisory Service does not handle disputes related to such sales.
  • As a rule, distance selling – online shopping, telesales and mail older – includes the right of cancellation, and the usual withdrawal period is 14 days. However, exceptions include made-to-measure products manufactured according to the customer’s wishes, as well as CDs, DVDs and computer software with a broken seal, among other things. More information about the right of cancellation in distance selling and its limitations
  • A non-defective product purchased from a shop may only be returned or exchanged if the seller has granted a right to return or exchange the product. More information about the right to return goods
  • You can file a complaint about a defect in the product, even if it has no warranty or if the warranty has expired. More information about warranties and the liability for defects
  • Test your knowledge about warranties and the seller’s liability for defects: Warranty Assistant
  • Help with filing a written complaint: Complaint Assistant
  • A study by the FCCA on the recognition of consumer protection among consumers and businesses (in Finnish)