Protecting consumer rights during Covid a ‘gruelling task’ – EU watchdog

Pricewatch: European Consumer Centre experienced ‘tripling’ of cases in spring 2020

Travel was one reason for the increase, with aviation virtually grinding to a halt almost as soon as the pandemic hit in March 2020. Photograph: iStock

Travel was one reason for the increase, with aviation virtually grinding to a halt almost as soon as the pandemic hit in March 2020. Photograph: iStock

 

When the pandemic turned our world on its head in the spring of 2020, Irish consumers quickly started to learn who their friends were.

Some businesses – faced with a crisis of unimaginable scale – managed to do the right thing by their customers. Refunds for events and holidays that had to be cancelled as a result of Covid were processed quickly, with businesses taking a massive financial hit at a massively uncertain time to ensure their customers were left as happy as they could be.

Many consumers – also faced with upheaval of unimaginable scale – still managed to do the right thing by businesses too. Holidays untaken in 2020 were willingly – if sadly – rolled over into 2021, and then on to 2022. The rescheduling of concerts and events to dates far into the future was accepted without complaint while people agreed to take vouchers for flights instead of the cash they were legally entitled to.

But that is not anywhere close to being the full story, as the picture painted by the Pricewatch mailbag over the last 18 months has made all too clear.

All too often people have been let down and given the runaround. They found it impossible to make contact with businesses who had a legal obligation to look after them. And sometimes their rights were just blatantly ignored.

Covid wasn’t the only story in town for hard-pressed consumers although there were times it seemed like it was. We also had to contend with Brexit, something which hit Ireland hard and led to a potentially dramatic reduction in people’s rights when dealing with operators across the Irish Sea. There was also the massive move online for shopping both at home and abroad.

Unparalleled turmoil

More than a year of unparalleled turmoil meant the European Consumer Centre (ECC) has had a busy time of it and in a report released last week it described trying to protect consumer rights during Covid as a “gruelling task”.

But first, a reminder of what the ECC is. It is a Europe-wide organisation which was set up two decades ago to engage with consumers. It offers information and advice services on cross-border rights as well as fighting for those rights on behalf of consumers. It often wins fights that might otherwise be impossible to win because of language barriers or because consumers here have no idea where to turn when bad things happen to them elsewhere in the EU.

If an Irish consumer gets into difficulty with a retailer or service provider outside of this jurisdiction, the ECC can help build a solid case, which it passes on to its counterpart in the relevant country which can then make contact with the trader to have the problem resolved. And if a consumer somewhere else in Europe has problems with a company based in Ireland it will frequently end up on the desks of the ECC.

Last year its team of case handlers dealt with a total of 8,035 consumer queries and in just three months between April-June 2020 it saw its case numbers triple compared with the same months in 2019.

Predictably, travel was the reason for the increase, with aviation virtually grinding to a halt almost as soon as the pandemic hit in March 2020 and only really starting to recover in recent weeks.

The European Court of Auditors recently published a special report – titled Air Passenger Rights during the Covid-19 Pandemic – and it found that “key passenger rights were not protected in this unprecedented crisis, in particular in the early stages of the pandemic”.

The auditors said that reimbursements to air passengers for cancelled flights were put on hold, and passengers were treated differently across the EU. “At the same time, member states provided unprecedented amounts of state-aid support for airlines and package organisers.”

The court noted that member states never linked this aid to the reimbursement of passengers for airlines, but most countries did so for package organisers. It said “member states took these decisions for airlines despite the fact that the [European] Commission had made it clear that under state-aid rules they could do so”.

As a result of all that chaos, air passenger issues accounted for 64 per cent of the total number of cross-border complaints received by ECC Ireland in 2020, up 130 per cent compared to 2019.

Right at the start of the pandemic, there were 5,000 complaints from consumers all over Europe against Irish airlines specifically with the main driver for the unprecedented demand for ECC Ireland’s services being travel restrictions, particularly flight cancellations.

According to the ECC, in the immediate aftermath of the first 2020 travel bans, a number of large international and national businesses operating in the aviation and travel industries – there are prizes for guessing who they are – became unresponsive when it came to consumer rights claims or, indeed, sanctions by consumer rights enforcement bodies.

As the year rolled on, another issue loomed large on the horizon for the ECC with air passengers making contact to complain about getting vouchers instead of cash refunds, which, under European Union consumer law, must be issued within seven days of the flight cancellation. Vouchers can only be issued with the passenger’s express agreement.

Under the rules that everyone thought were in place to protect consumers, vouchers can only be valid for up to 12 months, at which point they should be able to be cashed in. In many cases, however, airlines extended vouchers’ validity further into 2021 instead of issuing refunds, which were unreasonably delayed or simply refused.

The ECC also reported that there were serious difficulties for people who booked holidays through some – but by no means all – travel agents and online booking platforms. Its report says the refund process took even longer with refunds having to be transferred from airlines to the passengers via the third parties who handled the booking. The ECC says that “made life particularly hard for passengers impacted by Covid-19 cancellations”.

According to the ECC it succeeded in “mass-resolving 4,000 complaints at source, by ensuring refunds would be operated by the airlines at the earliest opportunity, and within an extended yet reasonable deadline”.

Scarcity of goods

By the end of 2020, ECC Ireland and its sister offices across EU member states, and Norway and Iceland secured cancelled flight reimbursements for Irish and EU passengers of over €4 million.

Covid-19 also caused other issues, the report notes. The ECC identified the scarcity of certain goods available within the EU and the increasing reliance of consumers on e-commerce during the pandemic.

“This led to intensive shopping from non-EU jurisdictions with less regulated or non-applicable consumer protections,” the ECC says. “The pandemic also revealed the [inability] of many EU businesses to ensure stock supplies, as well as consumer protections.”

The ECC adds that “the frequent imposition of transport stoppages and unprecedented disruption on shipping routes and supply chains [meant] the enforcement of consumer protections was a gruelling task in 2020 overall”.

One interesting snippet from the report suggests that another reason for the dramatic situation that unfolded over the last year and well into 2021 with so many people being let down was that as a result of the novel nature of pandemic-induced disruptions “some of the legislation at European Union level did not prescribe for consumer remedies in these situations”.

It says that “the state of affairs was further influenced by the consequences of some EU members states’ enacting of emergency national legislation, which precluded the application of EU-level consumer rights protections”.

It suggests that EU consumer-focused measures due to come into force in 2021-2022 “will aim to address the legacy of the pandemic and empower individual consumers to claim their entitlements while creating adequate institutional enforcement strategies, including enhanced cross-border co-operation, all of which will lead to a more seamless and effective enforcement of consumer rights”.

“With the immediate and devastating impact of Covid-19 on the economies across Europe and the world, 2020 will prove to be a historic and, indeed, deeply challenging year in terms of consumer protection and education,” said ECC Ireland director Cyril Sullivan.

“Within weeks of March 2020, we experienced a tripling of our volume of consumer cases. While ECC Ireland has always had an important role in the consumer protection infrastructure here in Ireland and within the wider European Union network of European Consumer Centres, the unprecedented demand for our services throughout last year and well into 2021 re-affirmed the importance of our work in a significant way.”