August 2014 eBulletin: rail travel, Commission action on car rental, and unreliable retail websites
August is traditionally a popular time for holidays and travelling, with many special events also taking place during the month. To help assist consumers who are planning trips or preparing for an occasion, this month’s eBulletin focuses on hiring a car abroad and also includes tips on how to avoid unreliable clothing websites.
Our consumer query of the month relates to the application of VAT to distance selling purchases. This month’s success story meanwhile involves a consumer who encountered a problem when hiring a car abroad.
If you are experiencing problems with a purchase from another European country, please contact us on 01 8797 620 or click here. More information on your consumer rights in Europe is available on this website.
Many consumers opt to avail of a hired car while on holiday. Hiring a vehicle is a convenient way of travelling between cities and countries and allows consumers to come and go at their leisure. However, it can also lead to problems if the vehicle incurs damage during the rental period, or if certain contractual information is not made clear or not properly understood. For example, they may also be liable for any damage incurred if they have not taken out adequate insurance or the insurance policy does not cover the damage in question. Alternatively, consumers can incur supplementary charges for extras such as an additional driver, insurance, or child seats.
Consumers looking to hire a car while abroad are advised to carefully construe the terms and conditions of the booking. In particular, they should ensure to familiarise themselves with the trader’s drop off and pick up policies, fuel policy, as well as checking whether there are additional charges for any extras. It is also advisable to check what documentation will be needed to pick up the vehicle and ensure this is in order before travelling. When picking up the vehicle, consumers should obtain a “sign-out” form which notes the condition of the vehicle at the time of pick up. Another such form should be obtained when the vehicle is returned. If it is not possible to obtain such a form (e.g. if the car is returned outside of normal working hours), it is a good idea to take photos of the vehicle, which may be of assistance should any subsequent problems arise.
If consumers are not certain about any aspect of the booking, they should contact the car rental provider to seek clarification. For further advice or information, contact our office.
Discrimination against consumers on the basis of place of residence: Commission action
The European Commission recently published a letter that had been sent to a number of car rental companies known to engage in unjustified discrimination against consumers. The companies in question were using consumers’ IP addresses to reroute them to country-specific websites, meaning that some consumers, depending on their Member State of residency, may have been charged more for a booking than a consumer resident in another Member State. In other cases, consumers had been charged vastly discrepant sums depending on what country of residence they entered on the car rental websites.
Having received numerous complaints, the Commission sent a letter to six car rental companies operating across the EU. The letter pointed out the discriminatory practices and urged the companies to review their practices so that consumers were better able to avail of the benefits of the Single Market. Of those six companies, three responded to the Commission’s letter satisfactorily, but another three failed to do so. In response, the Commission decided to publish the letter in the interests of promoting consumer awareness.
The Commission is continuing to monitor the situation. Car rental companies which have not yet reviewed their discriminatory policies are being asked to report on how they intend to review their practices by 30th August 2014. The Commission has not ruled out the possibility of further action.
Unreliable dress websites
With Debs season firmly underway, consumers are advised to be cautious when purchasing garments online. Summer is a popular time for special events and occasions but problems can arise if a garment is defective or not delivered on time. ECC Ireland has received a number of complaints from consumers caught out by websites selling garments and clothing accessories. In some instances, although the websites appeared to be based within the EU and were using a European domain address (e.g. .co.uk), the trader turned out to be operating from outside the EU. This can lead to difficulties as European consumer protections will not apply.
Consumers are encouraged to thoroughly research a trader, particularly sites appearing as sponsored results in search engines or on social media, before placing an online order. Remember that traders are obliged to provide full contact details, including a geographical address. An internet search may help to turn up any negative feedback left by fellow consumers. It is also important to remember that the mere use of an EU domain address does not necessarily mean the trader is based in Europe. Finally, it is advisable to use a secure method of payment (such as a credit card or Paypal) as this can provide some additional protection if something goes wrong.
Consumer Query of the Month
I recently purchased an item from a large online retailer based in the UK. On checking my bill, I noticed that I had been charged VAT at the Irish rate, even though the retailer is based in the UK. Is this permissible?
In general, under EU VAT rules, private individuals pay VAT in the Member State of purchase and do not have to pay additional VAT upon returning home. However, for cross-border distance selling (e.g. online purchases, purchases by telephone etc.), the rules are slightly different.
Traders engaging in distance selling are obliged to register for VAT in another Member State of the EU if their annual sales to that Member State exceed a certain threshold. In Ireland, the threshold figure is €35,000. Even if this threshold is not met, traders selling at a distance are free to voluntarily register for VAT in the Member State of their customers.
The UK trader from whom you purchased is obliged to charge VAT at 23% if they are registered for VAT in Ireland, either because their annual distance sales to Ireland exceed €35,000 in value or because they have voluntarily chosen to register in Ireland for VAT. The total price payable by the consumer, including all taxes and charges, should be made clear during the purchase process.
I would suggest that you contact the retailer if you wish to clarify the exact amount of their annual distance sales to Ireland. For further information or assistance, please see Revenue’s website.
Success Story of the Month
A French consumer booked a car for a trip to Norway via an Irish based online booking agent. The consumer received a confirmation of the pick-up location. When the consumer arrived at the specified location, he was informed that his car was actually at another airport over 75 km away. He had no choice but to rent another car at a cost of €687. The trader did not refund the consumer, insisting that investigations were on-going. After on-going negotiations with the trader concerned, ECC-Net secured full reimbursement for the consumer.
If you want more information on this or any other cross-border consumer issue, please contact us on 01 8797 620 or click here.