New legislation to crack down on rogue traders: EU-wide enforcement network given green light
European Commission - IP/04/1197 08/10/2004
Brussels, 8 October 2004
Commissioner David Byrne welcomed yesterday evening the final adoption of a new EU law to help prevent unscrupulous traders evading consumer protection authorities by targeting consumers living in other EU countries. The Council of Ministers formally approved legislation to create an EU-wide network of national enforcement authorities capable of taking co-ordinated action against rogue traders who abuse the freedom of the EU's Internal Market in order to run cross border scams. The new law, which was initially proposed by the European Commission in July 2003 (see IP/03/1067), will remove barriers to information exchange and cooperation. It also empowers enforcement authorities to seek and obtain action from their counterparts in other Member States. Adoption of the new law today was made possible by a political agreement on the legislation reached earlier this year between Parliament and Council (see IP/04/655). The new EU-wide enforcement network will start work in 2006.
“Cross-border scams don’t just cheat consumers. They also undermine confidence in the EU’s Internal Market. Member States need to work together to root out the rip-off merchants. Our EU-wide enforcement network gives them the means to do that”, said David Byrne, the European Commissioner for Health and Consumer Protection. “Rogue traders have been put on notice: they will soon have no hiding places in the EU.”
Cross-border scams: a growing problem
Catching rogue traders is hard enough in a single Member State but it can become almost impossible when they relocate to another country, as increasing numbers appear to be doing. Cooperation between national consumer protection authorities is the only way to ensure such rogue traders are brought to justice.
Cross-border problems appear to be growing as rogue traders adapt to new technologies and opportunities. For example, the European Advertising Standards Alliance (EASA) estimates that around 63% of the cross-border complaints received between 1992 and 2002 concerned rogue or peripheral traders.
Recent examples of cross-border scams include misleading and threatening clairvoyancy services, modem ‘hi-jacking’, deceptive prize draws, unsolicited first aid kits accompanied by demands for payment, direct marketing of slimming products to children and misleading marketing by ‘holiday clubs’.
Seamless co-operation between Member State authorities
The new law is designed to enable national authorities to exchange information and cooperate with counterparts in other Member States as easily and seamlessly as with other authorities in their own country.
It obliges each Member State to enforce EU law in its territory on behalf of all EU consumers, and requires them to designate a public enforcement authority to be part of the EU-wide mutual assistance network. Each of these authorities will be able to call on other members of the network for assistance in investigating possible breaches of consumer laws, and taking action against rogue traders. This should help boost the confidence of consumers and business in the Internal Market.
More information about the new law can be found at: