Introduction
Consumer disputes concern a product or service between a business and a private individual: a consumer has bought something that does not work as promised, taken up a service that falls short, or is confronted with terms he did not know, while a business may in turn be pursued by a customer. Consumer law gives private individuals far-reaching protection and imposes on businesses obligations that go further than many entrepreneurs expect. Set out below are the situations that occur most frequently, with the route that leads to the objective for each.
A purchased product is not what was promised
A consumer buys a product that does not do what was promised: it does not work, breaks quickly, or is different from how it was described. In a consumer sale the product must answer to the agreement, and where it does not, the law gives, in sequence, a right to repair, replacement and, failing that, to dissolution or a price reduction. That stepped order is mandatory: the seller must first be given the opportunity to remedy the defect before the sale can be undone. Two things often determine the outcome. A consumer who does not complain within a reasonable time loses their claims, even where the defect is objectively established; but in the consumer's favour, a defect that shows itself within a year is presumed to have been present already at delivery.
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Withdrawing from an online purchase
In a distance sale, through a webshop or at the door, the consumer has a cooling-off period of fourteen days in which to withdraw from the purchase without giving a reason. The seller must inform the consumer of that right in advance; if it fails to do so, the cooling-off period is extended by operation of law to up to twelve months. After a valid withdrawal the seller must refund the full amount, including the standard delivery costs. In practice the exceptions cause the most trouble: custom-made goods, sealed hygiene articles and digital content are excluded, but those exceptions are regularly invoked wrongly.
More about the right of withdrawal
A defective product has caused damage
A defective product causes damage: personal injury, damage to other property or consequential loss. For that damage the producer is liable regardless of fault; this is a strict liability, where what counts is whether the product failed to offer the safety one was entitled to expect. Such cases stand or fall on technical evidence: what exactly was the defect, when did it arise, and who in the chain bears responsibility, the producer, the importer or the seller? Time deserves particular attention: the claim becomes time-barred three years after the injured party became aware of the damage, and lapses in any event ten years after the product was put into circulation.
A business misleads or uses unreasonable terms
A business misleads a consumer about the characteristics of a product, pressures them into buying, or conceals essential information. In the case of such an unfair commercial practice the consumer can annul the agreement and claim damages, while the business additionally risks enforcement action by the regulator. The same protection applies to terms in general conditions that disproportionately disadvantage the consumer, such as far-reaching exclusions of liability, short complaint periods, tacit renewals and unilateral price changes: these are voidable. Crucially, the court reviews such terms of its own motion, even where the consumer does not invoke them, which weakens the position of businesses with sharply drafted conditions.
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A subscription or contract is tacitly renewed
A subscription for a magazine, a gym or telecoms that is tacitly renewed for a new fixed term after the first period is at odds with the law. Since the Van Dam Act a consumer contract is, after the initial term, converted by operation of law into a contract for an indefinite period that the consumer can cancel monthly; a term that binds them for longer is voidable. The business must also remind the consumer of the option to cancel in good time and clearly. If it does not, it cannot rely on the renewal.
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A booked trip is cancelled or falls short
On a package travel arrangement the tour organiser is liable for the proper performance of the whole trip, including the parts provided by others. Where the trip is cancelled or substantially altered by the organiser, the traveller is entitled to a refund, and in the event of unavoidable and extraordinary circumstances the traveller can cancel free of charge. If the organiser becomes insolvent, a statutory guarantee scheme catches the traveller. The key lies in the distinction between a package and separate, individually booked travel services: only the former gives the full protection.
A dispute over consumer credit
A credit or lease agreement with a consumer is subject to strict information and duty-of-care obligations, including a mandatory creditworthiness assessment before the credit is granted. Where the lender breaches those duties, this can lead to annulment of the agreement or moderation of what the consumer owes. Here too the court reviews of its own motion whether the agreement and the terms contained in it pass muster. The dispute therefore often turns on the question of which information was demonstrably provided at the outset.
A dispute with a business through the Disputes Committee
A party wishing to resolve a dispute with a business without going straight to court often finds a faster and cheaper route in the Disputes Committee. Many sectors are affiliated with it; the handling is largely in writing, against a low complaint fee and sometimes with a short hearing. The outcome is a binding opinion: the parties are bound by it as though they had agreed it themselves, and the court can afterwards review it only marginally. The flip side is that this route is only open where the business concerned is affiliated; if it is not, the route to the court remains the alternative.
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Mass damage or a collective action
Where many consumers have been harmed in the same way, an individual procedure is often not worthwhile and the collective action offers a way out. Under the WAMCA (the Dutch Collective Redress Act) a representative organisation can act on behalf of the entire group, both for a declaratory judgment and for damages in money. The court designates one exclusive representative, and a settlement or judgment binds, in principle, all those affected, unless they give timely notice that they do not wish to take part. The first and often decisive battle, however, is not about the merits, but about admissibility: the organisation's governance, funding and representativeness are assessed strictly in advance.
More about the collective action (WAMCA)
A consumer debt collection
Where a consumer fails to pay an invoice, or is instead confronted with collection costs, strict rules apply. Collection costs are only due once the consumer has received a reminder with a payment period of fourteen days, stating the precise costs that will follow. If payment does not follow, the claim can be put before the court. Even without a defence the outcome is not a given: the court reviews of its own motion whether the claim is sound and whether the underlying terms are not unfair, so a collection that does not survive that test is dismissed or reduced.