Guest columnist Janne Heimonen has been involved in direct selling, in international roles since 1994. In his last corporate role, he was the Managing Director for Europe for a growing, successful US-based company. In October 2013, Janne founded Hyväheimo to provide consulting, coaching and training for the direct selling industry, specialising in Northern and Eastern Europe. “Hyvä” is a Finnish word that means “good” and “heimo” means “tribe” or “clan”. Hyväheimo is a business partner of the Swedish DSA and a Supplier Member of the UK DSA and Seldia.
Guest Post by Janne Heimonen
Good News and More Bureaucracy for Direct Selling in New EU Directive
EU countries can no longer ban direct selling in national legislation. Since some governments made moves in the past toward restricting direct selling, it comes as a welcome part of the new Consumer Rights Directive.
National governments have until June 14, 2014 before they are required to enforce the Directive in their legislation. What the European law-makers are striving for is harmonized consumer protection and a real single market for distance selling to support competitive B2C trade. So far so good. But it also introduces things to fix and procedures to follow for companies and direct sellers alike.
All direct selling companies will need to amend their web shops. This could prove costly for small companies with third party developers looking after their online ordering processes. For one, payment methods must now be shown in the beginning of the shopping process. Any pre-ticked boxes that add services or goods will not be binding to the consumer and should be avoided. At the time of paying there will be fewer choices on what to call the “place order” button. The Directive requires a button that says “order with obligation to pay” but allows something that is equally clear. Surely many creative minds will find ways to create a nice button which fits the legislation.
There is a list of new information that must be provided to customers before their orders are finalized, whether online or in person. They must be informed about how to cancel the order and given or shown the new standard cancelation form. Customers must also be informed about complaint handling policies, codes of conduct and more before they can click “buy” or give you cash. This all sounds good in theory and will serve the purpose of sorting out companies that comply with the law from those that do not. But we could expect consumers to get used to all this extra information and not spend time on what is pushed to them at this stage as they hopefully skip forward to finish their order.
Changes to the “cooling off period” also mean that a standard 14-day period now applies and starts from when the consumer receives their order rather than places the order.
Companies that are not compliant with the Directive will after June 14 face the uncomfortable fact that they will be completing transactions that are legally not valid, potentially causing major headaches and costs. So although this is another administrative burden from the EU, it makes sense to take this seriously and to plan and implement required changes in time.
How about distributor orders then? Legal experts and a special mention in the Directive give reason to expect that most distributor orders would count as consumer orders from a consumer right perspective. To find out why and more about the changes, please download my free report “The New EU Consumer Rights Directive – and How it Applies to Direct Selling”.