General Scheme of the Consumer Rights Bill 2021: Discussion

I welcome members participating in today's meeting in line with the exceptional circumstances we have experienced due to Covid-19. Members and all those in attendance are asked to exercise personal responsibility in protecting themselves and others from the risk of contracting Covid-19. They are strongly advised to practise good hand hygiene and those attending the committee room will note that every second seat has been removed from use in order to facilitate social distancing. I urge those attending not to move any chair from its position and they should also maintain an appropriate level of social distance before and after the meeting. Masks should be worn at all times during the meeting, except when speaking. I ask for everyone's full co-operation on this. Any member participating in the meeting remotely is required to participate from within the Leinster House complex. Apologies have been received from Senator Paul Gavan.

Today we will give pre-legislative scrutiny to the general scheme of the consumer rights Bill 2021, which aims to give effect to two EU directives on the sale of goods and the supply of digital content and services. It would give effect to part of a third EU directive and update and consolidate existing legislation on consumer rights and remedies. It would strengthen the enforcement powers of the Competition and Consumer Protection Commission.

The consolidation of legislation provided for aims to give a legislative framework that is more up to date and serves consumers and businesses better. To explain the provisions of the general scheme and explain the proposed Bill in detail I welcome from the Department of Enterprise, Trade and Employment our witnesses, who are participating remotely. They are Ms Clare McNamara, Ms Emily de Grae, Ms Marie Dempsey and Ms Emma Hanrahan. Before beginning I will notify the witnesses about parliamentary privilege and explain some limitations to that privilege in the practice of the Houses in regard to references that might be made to other persons in evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and statute by absolute privilege. However, today's witnesses are giving their evidence remotely from a place outside the parliamentary precincts and, as such, may not benefit from the same level of immunity from legal proceedings as witnesses who are physically present. Witnesses have already been advised that they may think it appropriate to take legal advice on this matter.

Witnesses are again reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity, by name or in such a way as to make him, her or it identifiable, or otherwise engage in speech that may be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory regarding an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction.

The opening statement from the Department has been circulated to members and in commencing our consideration of the matter, I invite Ms McNamara to make opening remarks on behalf of the Department.

Ms Clare McNamara

I thank the Chair and the committee for the opportunity to discuss the scheme of the Bill. I am joined by my colleagues, Ms Emily de Grae, Ms Marie Dempsey and Ms Emma Hanrahan. We very much welcome the opportunity to contribute to the committee’s scrutiny of the scheme and to assist it in any way we can. I intend to outline the context for introducing the scheme and then set out its main provisions, after which we look forward to hearing the members' views and answering questions.

This scheme gives effect to two EU directives on contracts for the sale of goods and contracts for the supply of digital content and digital services. In order to implement parts of a third EU directive, namely the better enforcement and modernisation directive of 2019, the scheme also proposes to revoke and replace the 1995 Unfair Terms in Consumer Contracts Regulations and the European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013. It also updates and consolidates the existing legislation on consumer rights and remedies. Finally, it also makes amendments to the Consumer Protection Act 2007, an element of which will be to strengthen the enforcement powers of the Competition and Consumer Protection Commission.

A comprehensive, consolidated consumer rights Act along the lines proposed in the scheme provides a legislative framework that is more appropriate to present day conditions and requirements and is simpler to understand, creates clearer rules for businesses and strengthens consumers' rights. The scheme of the Bill now under scrutiny by the committee was approved for drafting by the Government on 20 April 2021.

As my speaking time is limited to eight minutes, it is my intention to summarise the main provisions of the scheme. The scheme contains ten parts in all. With limited exceptions, Parts 2, 3, 5 and 6 transpose maximum harmonisation directives, which give member states little discretion on implementation.

Part 1 deals with matters common to legislation, namely citation and commencement, interpretation, application, regulations, repeals and amendments. It also contains generally applying provisions, including those related to the making of contracts, preventing traders from attempting to restrict the statutory rights of a consumer and the jurisdiction of court to order remedies.

Part 2 focuses on the rights of consumers under sales contracts and on the remedies available to consumers where goods do not conform to those rights. It gives effect to the sale of goods directive of 2019 and it incorporates the provisions applying to consumer sales contracts in the Sale of Goods Act 1893. It also gives effect to Article 18, delivery of goods, and Article 20, passing of risk in goods, of the consumer rights directive of 2011, as well as the delivery provisions at sections 30 and 31 of the Sale of Goods Act 1893. Part 2 also deals with consumer guarantees.

Part 3 gives effect to the digital content directive of 2019 on certain aspects concerning contracts for the supply of digital content and digital services. Its provisions set out the rights that apply under such contracts and the remedies that apply where digital content or digital services infringe upon those rights. As digital content and digital services are relatively new, consumer contracts for their supply have not previously been the subject of specific statutory regulation.

Part 4 will replace Part IV of the Sale of Goods and Supply of Services Act 1980 for services contracts between a consumer and a trader. It deals with contracts for the supply of a non-digital service. It expands the rights of consumers in respect of such contracts and establishes a scheme of statutory remedies that will apply where a service does not conform to these rights.

Part 5 re-enacts, with substantial amendments, the provisions on consumer information and cancellation rights in the consumer rights directive 2011, as given effect by SI 484/2013. The Part also implements the significant amendments to the consumer rights directive made by the better enforcement and modernisation directive of 2019. As Part 5 deals with key aspects of consumer contract rights, its incorporation in the scheme is in the interests of regulatory clarity and accessibility. Its incorporation in primary legislation also permits the application of some provisions to contracts previously excluded from the scope of the secondary legislation.

Part 6 repeats consumer rights contained in the consumer rights directive of 2011 and given effect in SI 484/2013 relating to payment fees, additional payments, charges for calls to customer helplines and inertia selling, that is, the sending of unsolicited goods to potential customers in the hope of making a sale.

Part 7 makes several important changes to the provisions of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995, which transposed EU Directive No. 93/13/EEC. As the directive is a minimum harmonisation instrument, member states are free to extend its provisions to excluded terms and to add to the protections it provides. The changes made to the regulations include extending the scope of the unfair terms provisions to include contract terms that have been negotiated between the consumer and trader, strengthening the transparency requirements that apply to contract terms, narrowing somewhat the exemption from assessment for unfairness of core contract terms and expanding a grey list of consumer contract terms presumed to be unfair and introducing a blacklist of terms that are automatically unfair. The Part also gives effect to the new penalties provisions inserted in the directive by the better enforcement and modernisation directive of 2019.

Part 8 sets out the enforcement powers and penalties under the scheme. The Competition and Consumer Protection Commission, CCPC, will have enforcement responsibilities for consumer contracts under all Parts of the Act. The Central Bank will continue to have an enforcement function under Part 7 in respect of unfair contract terms in consumer contracts with regulated financial services providers. ComReg will continue to have an enforcement function under Parts 5 to 7, inclusive, in respect of consumer contracts for electronic communication services.

Part 9 contains various amendments to the Consumer Protection Act 2007 required in order to transpose amendments to the unfair commercial practices directive made in the better enforcement and modernisation directive of 2019. These amendments will extend and enhance the enforcement measures available to the CCPC.

Part 10 provides for several amendments to other consumer protection enactments.

Notwithstanding that the scheme is focused on consumer rights, it should not be seen as a measure that will harm businesses. Indeed, it will give a legislative framework to the terms and practices that responsible businesses already adopt in their dealings with customers and will ensure that those businesses that do not do so will face effective enforcement action.

I am happy to discuss the provisions of the scheme in more detail and to respond to questions from members of the committee.

I thank Ms McNamara. I invite members to discuss the issue with the representatives of the Department. I call Senator Crowe, who has seven minutes.

I thank the Chairman. I will not require the full seven minutes at this juncture. I thank Ms McNamara for the detailed presentation and I thank the other officials for joining the meeting. As regards the gaps being closed by the legislation in the context of digital content and digital services, how significant an issue have these been in recent years? Has the lack of legislation in this area resulted in significant problems or has the market largely worked well despite gaps in the law?

Ms Clare McNamara

I thank the Senator. The fact that there was no specific legislation to cover digital goods and services did not mean they were not covered under sale of goods and services legislation anyway. However, it was important to modernise legislation to try to meet the peculiarities of digital content and digital services. For example, one of the things we are trying to cover here is that people can sign up to a digital service and, instead of paying for that service in monetary, they supply personal data, almost as a payment. As such, it is important to try to ensure that a consumer's rights are protected where is no monetary payment being made but the payment is in the form of data. That was not necessarily covered in the existing legislation. That is not to say that consumers did not have rights under existing legislation, but it was important to try to future-proof those rights in the context of the digital world we are in. Digital content includes computer games and the famous digital platforms that offer streaming film and television services. It was about making sure that consumers are protected regardless of whether a physical payment is made or consumers are just giving access to their data by way of payment. I hope that answers the question.

I thank Ms McNamara for the response. Following on from that, I am aware the Department carried out consultation on the Bill. The consultation closed to submissions at the end of June. Has the review of submissions been fully completed? If so, what sort of feedback arose from that consultation?

Ms Clare McNamara

The consultation has concluded. We have been factoring in the responses to it in the drafting. As members are aware, the Bill was approved for drafting in April, so the drafting has been continuing apace since then. We have been taking into consideration several of the responses that were received. Respondents to the public consultation included the likes of the CCPC, the Banking and Payments Federation Ireland, the Consumer Association of Ireland, IBEC, ComReg, the Alternative Operators in the Communications Market group, the Bar Council, the Law Society and the Irish Dental Association.

The responses to the consultation were generally very supportive. Concerns were raised regarding Part 4, particularly in respect of the supply of professional services. For instance, the Bar Council of Ireland suggested that in the event that barristers are permitted to provide services directly to consumers, those services should be exempted from the application of Part 4 of the scheme, relating to contracts for the supply of services. Although the matter is somewhat academic at present, we do not see any compelling reason, in principle, for the exclusion of legal services provided by barristers from the scope of Part 4 in terms of the protection of consumer rights. The Irish Dental Association argued, for example, that the provisions of Part 4 and the fitness of a service for a particular purpose or result are inappropriate in the context of dental services. As these provisions only apply to a purpose or a result accepted by a service provider, we think it is proportionate to offer adequate safeguards to the providers of dental or other services.

We are engaging with other Departments with responsibility for redress schemes, for example, in areas such as property or legal services. We are engaging with bodies such as the Legal Services Regulatory Authority, the Residential Tenancies Board and the like with a view to making sure that, without impinging on consumer rights, we avoid regulatory overlap. We do not want any overlap or confusion. We are grateful to all the respondents to the consultation. We might not necessarily agree on some of the points of concern raised, but all of the observations have been analysed and they will inform the onward drafting of the Bill.

Overall, Ms McNamara would say the feedback from the consultation was very positive.

Ms Clare McNamara

Yes, it was.

I will leave it at that for the moment.

The next member who has indicated to speak is Deputy Louise O'Reilly.

I thank Ms McNamara and her team for the comprehensive presentation. The witnesses are aware, as we are in my office, that this is budget week. It is, therefore, probably not the best week for us to consider a heavy piece of lengthy legislation. I appreciate the work that has gone into the scheme. Perhaps the committee will have an opportunity to engage with some of the people who contributed in order for us to have a broader discussion on it. This is an important piece of legislation and the intention is to get it right. I acknowledge the significant amount of work that has clearly gone into it already.

I have a few questions. As it is budget week, we are all a bit stretched, no more than the witnesses are. Head 10 states that provisions of the Act will provide for, among others, a reduction in the price of digital content, digital services, goods or services. Will Ms McNamara briefly explain how that will manifest itself? It is clearly an intention of the Bill, but in what way will we see the impact of that in practice?

Ms Clare McNamara

I need to look at the head to remind myself. As the Deputy can appreciate, it is a 300-page scheme.

Ms McNamara can take her time. I am aware it is a significant piece of work.

Ms Clare McNamara

This head refers to the provision of remedies in regard to the repair or replacement of the goods, as well as the bringing of digital content and digital services into conformity and a reduction of price. It increases consumers' rights in the area of remedies to which they are entitled. Their existing rights in terms of goods will still apply. There has been an imbalance in consumer rights legislation in the past, between goods and services, and we are trying to rebalance that in this Bill. We are increasing consumer rights and remedies whereby they will have automatic rights and remedies laid out in the legislation in instances when goods or services are not in conformity. As the drafting of the Bill proceeds, we will consider timelines that will be afforded to traders, particularly in regard to digital services, to bring them into conformity. When a person's broadband is not working, how much time should the trader be afforded to correct that before the person can seek a reduction in price of what has already been paid, or be allowed to cancel the contract and seek a remedy from the trader? That will be built into the legislation. We are also giving the Competition and Consumer Protection Commission, CCPC, more powers to pursue traders if they do not meet their obligations in regard to the remedies. I hope that covers the question asked by the Deputy.

Yes, it does. Whoever will be in charge of handling broadband issues will be a very busy person. We all know that broadband cannot be quick enough - or broad enough - for us.

Under Part 7, the Competition and Consumer Protection Commission, the Commission for Communications Regulation, the Central Bank and other bodies will be given the power to take summary proceeding under this legislation. My question might be outside the scope of what Ms McNamara can say, which is fair enough, but if not, I would appreciate an answer. In regard to available resources, does Ms McNamara believe the necessary resources exist now or should the committee or the Oireachtas consider increasing the resources? Giving the commission powers is one thing, which I am sure it will welcome, but doing so without providing the resources will not deliver results for consumers. Will Ms McNamara comment on that issue?

Ms Clare McNamara

The Central Bank and the Commission for Communications Regulation, ComReg, are within the remit of our Department. The CCPC is the main enforcement body for the purposes of all parts of this Bill. It is an agency of our Department and the Deputy may have heard yesterday that it received a not insignificant funding increase in budget 2022. That reflected our awareness that it will require additional resources for its enforcement function for the purposes of this legislation. That is the reason for its funding increase in budget 2022.

To be clear, the budgetary increase was to specifically resource this area. Does Ms McNamara have details - I did not see them if they were published as part of the budgetary process - on the projected number of staff who will be recruited and if they will have specific expertise? Perhaps that is a question for another day.

Ms Clare McNamara

We do not have the exact details of staff numbers, but we know the CCPC has received a 9% increase in budget 2022, in addition to its existing funding. Much of that will focus on the enforcement area for this Bill. It may need additional staff for the competition Bill, for which I was before this committee earlier this year. While it has carried out significant resourcing this year for that, the commission might require more staff next year as that Bill goes through the final stages of drafting. The bulk of additional resources it will receive from the increased budget will focus on consumer rights Bill.

I have one final question. Under Part 7, reference is made to the grey list of consumer contract terms presumed to be unfair and the blacklist of terms that are automatically unfair. Will Ms McNamara provide examples of how that will work in practice? While I have a sense of what it means, if she can provide practical examples, it would give me a better understanding.

Ms Clare McNamara

The blacklist contains the terms that can never appear in a contract because they are automatically unfair and if a contract contains one of these terms, an offence will be committed under the Act. If there is a clause in a contract that excludes or limits the liability of the trader for death or personal injury arising from an act or omission of the trader or requires the consumer to pay for goods or digital content that have not been supplied, these would be examples of blacklist terms that should never appear in a contract.

The grey list contains terms that might be presumed unfair and that will form part of a schedule to the Act. They could be considered questionable if they appeared in a contract. An example of this would be a term in a contract that has the object or the effect of making an agreement binding on a consumer whereby the provision of services by the trader is subject to a condition where realisation depends on the trader’s will alone. This would put more obligation on the consumer than the trader providing the service. Another example would be a term that has the object or effect of requiring a consumer, who decides not to conclude or perform the contract, to pay the trader a disproportionately high sum of money in compensation for services that have not been supplied. That would be considered or presumed an unfair term. They are a couple of examples of each.

Is Ms McNamara saying that they will be more explicit in the Schedule when the Bill is published?

Ms Clare McNamara

Yes. The grey terms are already set out in the schedule to the scheme.

I call Deputy David Stanton, who has 14 minutes. Do you wish to share time with Deputy Bruton, who has also indicated?

Yes, I will. I welcome the witnesses here today. This is an extremely complicated piece of legislation that contains a significant amount of detail. From the reaction I have read of most of the people who have made submissions, it appears to be welcome and needed. The statutory rights of consumers are to be enhanced and more power is to be given to the regulator.

I wish to ask about the provision that a recipient of a gift must also be a consumer, the meaning of which has been vague for some time. When a person receives a gift, where do the rights pertaining to the transaction go? Up to now, this was a grey area.

What is this doing in that regard?

Ms Clare McNamara

I will pass this question to my colleague, Ms Hanrahan, if I may.

Ms Emma Hanrahan

Before, privity of contract would have excluded someone from having a contractual relationship with the trader if they had received something as a gift. This will be a statutory exception to that. If the recipient is a consumer they will have the same rights and effectively be able to step into the shoes of the purchaser of the item.

The proposal on the sale of live animals is also interesting. Will the officials expand on that, please? It is article 3.5 (b) which enables living animals to be excluded from the scope. The Department is not implementing that.

Ms Emma Hanrahan

Yes, it was not included in the scope previously under sale of goods in Ireland. We have just decided to carry on with that. Nothing was raised in the consultation. We did ask the question of whether it should be included in the consultation and all parties agreed that it should not. It was representative consumer groups etc. who felt that it was not necessary.

Very often consumers purchase equipment and they install it themselves and it goes wrong because the instructions are not clear. There is an issue here with respect to who is liable. Will the officials explain what the legislation is doing in that regard, please?

Ms Emma Hanrahan

The sale of goods directive states that would be a nonconformity with the contract if the consumer attempts to install a good and that perhaps if they do not get sufficient instructions etc. and there is an issue, then they would be entitled to a remedy.

Is there something in there that states the installation of goods should be carried out by a qualified person? In other words, if I as a consumer try to install something and I make a mess of it resulting in damage to the equipment, material or whatever I am doing, where does the liability lie then?

Ms Emma Hanrahan

It would probably depend. Some providers have their own installers and in case that installer would be responsible for doing it. If, for example, I have bought something and a specific installer is not nominated, there are instructions in the box and I am to install it myself, then there is a clear intention from the trader for me to install it, so if there is an issue in that process that amounts to a nonconformity with the contract.

Okay. Will Ms Hanrahan speak about the limit of liability of a trader? There was a suggestion at some stage that it should be shortened.

Ms Emma Hanrahan

The minimum under the directive is two years. Ireland had quite a confused regime where how long it was expected the trader would be liable for any nonconformity was dependent on the value of the good and other issues. The contractual limitation period in Ireland is six years, so it was anything up to six years. At the moment, we have decided that we will continue with the limitation period of six years. A couple of stakeholders thought we should reduce the legal liability to two or three years. I believe the Law Society suggested three years. We are looking at that but in reality, we do not want to reduce consumers' rights either when it comes to high-value items. To bring it down to two or three years for a car or an expensive item might be seen as a reduction in consumer rights in Ireland. In other countries, they do separate legal liability periods out from limitation periods but in Ireland we did not specifically do that. That is why we chose this approach. Obviously, we will continue to review that.

Ms Hanrahan mentioned cars. Will she speak on the trade-in value of cars, something which is quite current? That is head 28(5)(b). The Law Society submission argued that "in order to avoid difficulties with Head 28(5)(b) where a trade-in value was not ascribed,a trader should be to specify a monetary value for all trade-in goods, particularly in car sales and part exchanges".

Ms Emma Hanrahan

Okay. I cannot give that information at the moment but I can give it to the Deputy in the future. That might be the most efficient way to do it.

Finally, I refer to guarantees. When a consumer purchases a piece of equipment, say a television, microwave or fridge, often the shop will suggest that they might like to purchase additional warranty. What is the legality on that and its value? Is there anything to be gained by that because there is already a lot of built-in protections in the legislation if something goes wrong?

Ms Emma Hanrahan

That is the difference between the legal guarantee and the commercial guarantee. The legal guarantee is the statutory rights which have always existed. Consumers sometimes get confused when they are offered these guarantee terms when they purchase goods. Most of the time, they might find the guarantee in a box and they are told to call a number and get this additional right. There is nothing in the scheme that prevents the trader giving additional rights and extending its terms but these commercial guarantee that exists in the statute, whatever that may be. In non-conformity, if it is six years from breach of contract or whatever is decided eventually through the drafting process, that will not be affected by any shorter period offered by a trader. They could give extra rights for something that goes wrong with a product or they could give consumers extra rights under commercial guarantees but they are going to have to ensure that whatever products or service they provide conforms with the contract they have with the trader, otherwise the statutory rule and that guarantee would kick in and the consumer would have the right to a remedy.

What I am getting at is where consumers are cajoled into purchasing extra warranty. Is that a waste of money? Is it something that is not really required as they are already protected under the legislation? Do they need to do this or is it a money-making racket?

Ms Emma Hanrahan

I think it is free normally. The Deputy might be talking about insurance as an additional purchase and that is really up to consumers if they want to insure goods. I would not say that it is a racket but it does not affect the consumers' rights and their legal guarantee under the directive and now under the scheme.

The legislation, as an earlier Deputy said, is extremely complex. It is quite important that it be available to consumers in an easy to understand format when it is finally enacted because it is really long, complex and difficult

How, in layman's terms, will it be easier to enforce? Is it still the small claims court? Does the CCPC just take issues of public concern rather than individual complaints?

An issue which keeps coming up is the difficulty of contacting some of these providers. With many providers of online services you simply just cannot contact them. If you want to change your terms, you face interminable waiting times. That is greatly hampering the capacity to switch providers. Is there any effort, legal or administrative, to tackle that issue because it undermines fundamental rights?

On consumer information, increasingly consumers want to see labelling on the impact of the products they purchase in relation to various environmental characteristics and so on.

Is the Department moving towards the creation of a more comprehensive range of entitlements to information?

Finally on consent, I know that there is some impetus to move away from “Accept All“ by ticking the box where one does not have a clue as to what one has signed up to. How is the withdrawing of one’s consent handled after one has given one’s personal data? Is the Department moving towards the creation of something that is more meaningful to consumers who are increasingly ticking these boxes, which is the alternative to reading of pages and pages of typed print?

Ms Clare McNamara

I thank the Deputy for the question and I will probably share the answering of these questions with my colleague, Ms Hanrahan.

I will start with the question of enforcement. First, this legislation is going to create new rights for consumers, and, in particular, around remedies. For example, the specific remedies that are now available to consumers that were not in place before will be around the whole area of digital content and services and where a service that does not comply with the requirements of the Act, the consumer will have the right to the digital content and service free of charge while the service is brought into compliance and within a reasonable time and without any significant inconvenience to the consumer.

If that right is not complied with, the consumer can go to the Competition and Consumer Protection Commission, CCPC. This commission has a number of powers. It has the power, first of all, to accept a written undertaking from a trader to rectify the failure or the refusal to comply. It can issue a compliance notice to the trader, setting out the actions to be taken and it can apply to the Circuit Court or the High Court for a declaration or an injunction regarding the failure or refusal. Bear in mind that there are fines also for non-compliance under the Fines Act.

Further to enforcement, we are bringing rights that consumers have not had before by way of remedies that are available to them and we are giving the CCPC the power to pursue those rights and remedies.

I did not quite understand the Deputy’s question on the labelling of products and I am not sure if my colleague did. I might ask the Deputy to repeat that question please.

On consent, we have all been there where there are hundreds of pages to read through, particularly in the case of signing up to social media, for example, and one is agreeing to rather than reading the hundreds of pages. We would always say to consumers that they should be reading what they are signing up to. As to whether we are dealing with any of this, specifically, I will ask my colleague, Ms Hanrahan, to answer that particular question.

Ms Emma Hanrahan

Good morning members. Under the digital content directive, there is this new idea because previously data, or the provision of personal data to a trader, did not amount to consideration under contract law. The digital content directive has introduced this because many digital services - and we know this happens with some of the larger platforms - provide this service that appears to be free but they are doing this in exchange for personal data. Essentially, this would mean that consumers will now have a contract with these service providers and, going forward under the Act, they will have remedies should there be a problem with the contract. Obviously, the provision of personal data, if it is just in order to provide the service to the consumer or if it is to comply with legislative requirements, is an exception under the Data Protection Act, which means that this essentially would not amount to consideration. If the data, however, is processed beyond that by a trader - for instance, if they use a person’s data to target that person for another product - that would be considered good consideration and a contract would have been formed once the scheme is enacted.

In this regard, an issue arose around personal data and we consulted with the Data Protection Commissioner about the right to withdraw data etc., and it is set in stone that the consumer can withdraw the right to access their data. As to how that would work effectively, we said it would be governed by data protection law and we do not intend to wade into that side of things because we do not have the expertise required. The best thing to do there is to refer to existing data protection law which governs what would happen in those instances. I thank Deputy Bruton.

The next person to speak is Deputy Shanahan and he has seven minutes.

My apologies, Chairman, but one if not two of my questions were not answered, so perhaps I may come back in again with them.

Yes, the Deputy may come back in later on.

I thank the Chairman and the Department officials this morning. I will ask some questions which will touch on a couple of areas. First, I ask about phone scam marketing and I am thinking particularly of those who target children on ready-to-go mobiles. I have had family experience of this where my daughter clicked on a promotion and basically ended signing up to a subscription service that came to a couple of hundred euros before we realised what was happening. It took a row with the phone provider to sort it out. My argument there was that they said that she had given consideration but I made the point that she was a juvenile and legally, as such, she should not have been bound by a contract. That is one issue.

Our witnesses’ opening statement said that the member states are able to add further restrictions to the proposed legislation. Has the Department any particular recommendations for Government around the legislation?

Finally, are the Department officials aware of any further resourcing that will be given to the Garda National Economic Crime Bureau, and in particular to the Garda National Cyber Crime Bureau, to prevent fraud and cybercrime but also this increased amount of scam marketing that is going on where many people are being approached? How are we going to cut this out and how will this legislation provide for that?

Ms Clare McNamara

I thank the Deputy for his question. As to the type of marketing mentioned by the Deputy where children are signing up to services on their mobiles, that is covered by the Commission for Communications Regulation, ComReg’s powers and is not part of this Bill.

The Deputy a kindly remind me of the further question he asked, please?

My other two questions are as follows. Where our witnesses mentioned that member states have the ability to recommend further enforcement of sanctions, has the Department itself made recommendations in this respect? On the provisions of the Bill, are the officials present aware of or supporting any discussions with the Department of Justice in respect to resourcing the Garda National Economic Crime Bureau and the Garda National Cyber Crime Bureau? I thank our witnesses.

Ms Clare McNamara

On that last question, there is another area of my Department that is involved in discussions on the Digital Services Act and the Digital Markets Act that are under way in Brussels. These discussions are on illegal online content and the Department of Justice would be involved in an interdepartmental group that is looking into that legislation. Other legislation in that area is within the remit of the Department of Justice. The digital unit of our Department, which is not my unit, is engaged in this. On the further enforcement of sanctions, it is important to point out that this Bill is transposing three EU directives, two in full and most of the third one. These were negotiated over a four-year period in Brussels. We, that is Ireland, were very involved in those negotiations as to the enforcement, the sanctions, the rights and remedies of consumers.

It is also important to point out that this Bill has been a long time coming but the Sales Law Review Group, for example, produced a report back in 2011 that talked about Irish consumer legislation being somewhat disjointed and difficult for consumers to navigate and understand. As well as transposing the three EU directives here that very strongly increase consumer rights, we are consolidating existing legislation to make it easier for consumers to access, understand and have everything in one place so that it can be easily found. We are also increasing the enforcement powers, while we are doing this.

EU legislation can be transposed by secondary legislation in accordance with the 1972 European Communities Act or it can be transposed by primary legislation.

If one transposes it by secondary legislation, one has to stick to the scope of the directive rigidly and cannot go outside it. There are some pieces of EU legislation whose scope we could not go outside because we transposed them by secondary legislation. Since we are using primary legislation in this context, though, we can increase the rights because we can go outside the scope of the directives in a way that we were not able to in the past.

The Department has been considering this matter since the sales law review group's report in 2011. We did not produce legislation to consolidate the area because we were waiting to see the outcome of the three EU directives, which ended up taking longer to negotiate than we could have anticipated.

I hope I have answered most of the Deputy's questions.

That has been helpful. I thank Ms McNamara.

Next is Deputy Murphy, followed by Deputy Flaherty.

I thank Ms McNamara for her presentation. I only have one question. She might have seen an incredible story in today's newspapers about Ryanair, which has been in receipt of significant public moneys throughout the course of the pandemic. Passengers who were unable to travel due to Covid carried out chargebacks on their credit cards and, as a result, Ryanair is saying that they are banned from flying with it in future. Will that be covered by this Bill or is it covered by existing consumer legislation? Is this something that a company is able to do as a consequence of someone using a chargeback?

Ms Clare McNamara

It is not necessarily covered by this legislation because consumer rights in terms of flights and the cancellation of flights are the responsibility of the CAR. That is the Commission for Aviation Regulation - I had to try to think about what the acronym stood for. Consumers have recourse to the CAR when it comes to flights, in particular the cancellation of flights and the right to a refund. Any consumer in that situation should be going to the CAR in the first instance. In particular, the chargeback situation is not necessarily covered by this legislation.

Hypothetically, let us say that this is an online retailer with nothing to do with flights. I buy something, I feel I did not get it or whatever and I do a chargeback as a result, but the online retailer says that I am barred and cannot buy anything from it again. Would that be covered by this Bill or is it the right of a retailer to decide that someone cannot buy something from it?

Ms Clare McNamara

We are not doing anything with this Bill to infringe upon traders' rights. We are just strengthening consumers' rights. In my opening statement, I mentioned that we were not infringing upon the way responsible traders behaved towards their consumers because they were already looking after their consumers. Rather, we are trying to take to task the irresponsible traders who do not look after consumers' rights. However, private companies have the right to decide who they trade with in the same way as the consumer does.

The Deputy's example is an unusual one. In the case of an airline, there is strict regulation around the cancellation of flights and consumers' rights. As to an online trader deciding not to trade with someone in future because he or she did a chargeback on a card, I do not see how we could cover such a scenario. However, the Deputy has raised an interesting question and we will consider it during the drafting of the Bill, which is still under way.

I thank Ms McNamara.

I thank the departmental officials for participating in this meeting. It is great to see this Bill. It is welcome and important legislation. Keeping up with the sector is probably difficult, given that there is so much change and innovation and so many new concepts, particularly online.

The grey and black lists will be set out in the legislation and will try to keep pace with what is a fast-moving sector. What will that scenario be? Will officials update the lists or can they only be updated through subsequent legislation? Will they be reviewed annually? What will be the criteria for being added to the lists? Will they be set by the Department or will retailers and, more important, consumer organisations have an input? A great deal of learned experience will feed into the process, reflecting where customers have been aggrieved. This point was spoken about earlier, but I would appreciate it if Ms McNamara expanded on it.

Ms Clare McNamara

The black list will be part of the Bill, so changing it will require primary legislation. However, what we will be including in the legislation in terms of that list will be incredibly comprehensive. Bear in mind that the entire scheme, including the black and grey lists, was put out to consultation.

We have been comprehensive in the grey list's drafting, but that is not to say that we would not be open to expanding it in future. Since we are discussing a Schedule to the Bill, I must look to my colleague. Will amending both lists require primary legislation? I think it probably would, as the Schedule would be set out in an Act. In that light, there would have to be good reason to amend them, but we are open to getting and considering feedback on what should or should not be included. The lists formed part of the public consultation and the feedback on what we had included was positive.

I thank Ms McNamara.

That concludes our first round of questions. The next member who has indicated is Deputy Bruton.

I wish to return to the issue of the difficulty in contacting many of these providers of services. It seems that they do this without any regard to consumers. This is important in the context of rising energy prices. Since people can reduce their costs significantly if they switch providers, this is a deliberate attempt to try to lock people in and put them at a disadvantage by using consumer inertia. The longer people have to wait, the more likely it is that they will get exasperated. If not through this legislation, how can we get to grips with the situation? Could the Competition and Consumer Protection Commission, CCPC, use some of its powers to go after the main offenders?

My next question is on labelling. There is an increasing demand from consumers to know about, for example, repairability, ingredients and whether production methods have adverse environmental impacts. Is this Bill a vehicle whereby we can see those provisions becoming available to consumers over time?

My final question is on the withdrawal of consent. As they say, if you are getting something for free, you are the product. As such, people should have the right to withdraw. Are we saying that this is about data protection rather than contracts? If I understood what the witnesses said, once someone's personal data are processed, he or she has a contract, so why would someone not use that contract as the route of enforcement rather than seeking to find other rights under the Data Protection Act? What are other member states doing in this regard?

We need to put limits on this consent activity. I would have thought that new expectations in the contract that are enforceable and have remedies would be the easiest way to address this.

Ms Clare McNamara

I will pass over to my colleague, Ms Hanrahan, particularly on that last point. On contracting traders and switching providers, we are into sectoral regulation territory. For example, energy providers are regulated by the Commission for the Regulation of Utilities and broadband providers are covered by ComReg. If the Deputy is talking about where someone cannot contact a trader and it is not already covered by a sectoral regulator, then the CCPC would have the power to intervene and force the trader to engage with their consumer.

I will ask Ms Hanrahan to expand on labelling and the withdrawal of consent. I am not sure that labelling falls within the remit of the Department and whether, therefore, it is covered by this, particularly in the context of green credentials and the consumer's right to know about the green credentials of products.

Ms Emma Hanrahan

When the Deputy refers to trying to contact the trader, does he mean to complain about the conformity of the contract, that is, to complain about service or the good?

Many people want to discontinue their service and switch to another provider or they have a package that no longer meets their needs, but it is virtually impossible to make contact with their provider.

Ms Emma Hanrahan

The Bill makes clear consumers' cancellation rights. If they are not able to cancel for that sort of reason, they would still have a claim under the scheme.

That is a nuclear option, though. You would have thought you had a right to alter your terms where, say, you have a phone package that you no longer need.

Ms Emma Hanrahan

It is termed loyalty penalties where a person stays with a provider and, just because of that, the price goes up when they do not shop around. It is something that we are reviewing but not in the context of either the proposed Bill or the contractual aspect.

I am sorry if I was not clear earlier about consent and data. People absolutely have a right to withdraw consent to their personal data. That is a fundamental data protection right. That is what I mean - the scheme defers to that. It just means that under the scheme and under data protection they would have the right to withdraw processing of their personal data.

And that is part of their contract, as opposed to-----

Ms Emma Hanrahan

For digital content and services only. In the context of non-digital services, we have provided that the Minister may make regulations if it becomes the norm for that to be a way by which traders try to engage with consumers and form what would appear to be a contractual relationship with them. Digital services - the platforms and places where you can store your information, put up your photographs and so on - are provided, as they would say for free, but the digital content directive now says that if the data is processed beyond what the legal requirements are or beyond what is necessary for you to provide the service, then you do have a valid contract with the customer.

I am just a bit confused about where you can enforce under the contract versus where you go to the Data Protection Commission office and look for vindication under the law.

Ms Clare McNamara

Under the contract, if there is an issue with your service, you have a valid contract so you absolutely have a right to other remedies under the scheme. I was just saying that if you choose not to have your personal data processed anymore, you can withdraw that consent. That is dictated under the Data Protection Acts, so you can end your contract.

That concludes our deliberations for today. I thank the officials from the Department of Enterprise, Trade and Employment for assisting the committee in its consideration of this matter. In light of the volume of the scheme sent to us - it runs to 302 pages - I ask that a contact phone number or email for someone in the Department be provided for any members who have follow-up queries. That would be very useful.

Ms Clare McNamara

I am happy to do that and will contact the clerk after the meeting.

I thank Ms McNamara and her officials for attending.

The joint committee went into private session at 10.36 a.m. and adjourned at 10.47 a.m. until 9.30 a.m. on Wednesday, 20 October 2021.