Is the Protection of Consumer Rights Ensured

Every natural person is a consumer who purchases goods and services for his or her own needs. In order goods and services best fulfilled the needs of consumers, proper functioning of both the business oversight system, which aims to ensure the quality of goods and services and the consumers rights protection, which protects against unfair or misleading practices by providers and sellers, should be ensured. The efficiency of business supervision was assessed by the National Audit Office last year, whereas an audit on “The Protection of Consumer Rights” was carried out this year. Its results show that one third of consumers experience misleading advertising, one in ten are confronted with other unfair commercial practices, and more than half do not know where to turn to in order to defend their rights.

“The fact that the current system of consumer rights protection in Lithuania has shortcomings is confirmed by the Consumer Conditions Index, where Lithuania ranks 24th among the 28 Member States of the European Union. During the audit we examined the reasons for this and what measures would be necessary to ensure a high level of consumer protection,” says Jurgita Grebenkovienė, Director of the Governance Audit Department of the National Audit Office.

First, more than half of consumers are unaware of their rights, procedures for their implementation and defence, despite over 9 thousand educational measures per year. This is because educational measures are selected without knowing for which groups of consumers they are targeted and which knowledge is missing. In the last three years, there has been a fivefold increase in the number of consumers who do not know where to turn to defend their violated rights.

Second, the decisions of the State Consumer Rights Protection Authority (SCRPA), which oblige sellers and service providers to modify, withdraw or no longer apply contract terms and conditions that have been found to be unfair, are recommendatory in nature. Where they are not implemented, the elimination of consumer rights violations increases by 14 months on average, as long as the issue of consumer rights defence is not resolved by the court. The number of outstanding decisions increased three times in 2017 as compared to 2015.

Third, the current out-of-court dispute settlement system does not help consumers to solve disputes more quickly and more easily. Lithuania has opted for a maximum period of 90 days for the settlement of disputes that the Member States of the European Union are permitted, but even through that, only slightly more than half (56 %) of disputes have been handled by the SCRPA. According to the auditors, settlement of some disputes lasted for more than one year.

According to the auditors, it would be possible to reduce the number of disputes and the burden for SCRPA, if the costs for the settlement of disputes were recovered from the sellers and service providers who have violated consumer rights. This would be one of the ways to improve the system for dispute settlement. The auditors estimate that if the law provided for the possibility to recover the costs of the settlement from sellers and providers in the cases where they have been found to be in breach of consumer rights, state budget savings of some 700 thousand euro could have been achieved in the period of 2016-2018.

The expected impact of the audit recommendations is a more efficient consumer rights protection system, which will facilitate the protection of consumers rights and help them to faster and easier resolve their disputes with sellers and providers.