Consumer Protection

The importance of protecting consumers is highlighted in various laws which seek to ensure a fair market for all. Owing to the consumer’s weaker position in a contract for goods or services, efforts have been made both locally and at a European Union level to ensure that a level playing field is achieved by protecting consumers against vulnerabilities.

The main law governing consumer protection is the Consumer Affairs Act, Chapter 378 of the Laws of Malta. Mainly, this law protects consumers against unfair contract terms and unfair commercial practices as well as sets minimum standards that traders and service providers must employ when selling goods or services to consumers.

In addition, the law establishes a Consumer Claims Tribunal the aim of which is to hear and determine consumer disputes between traders and consumers. The Tribunal has jurisdiction to hear and determine claims made by consumers against traders where the value of the claim does not exceed EUR3,500 and where the claim relates to the purchase or hire of goods by a consumer from a trader or the provision of services by a trader to a consumer.

It is notable to mention that consumer are still not precluded from opening a lawsuit before the ‘normal’ Courts of Malta. However, proceedings before the Tribunal tend to be less time consuming, cheaper and more efficient.

The Consumer Affairs Act works in tandem with other legal instruments adopted at EU level, such as the Consumer Rights Directive. This Directive is intended to strengthen consumer rights by introducing better price transparency, prohibiting pre-ticked boxes and offering further guidelines on digital content. Furthermore, the European Consumer Centre in Malta forms part of the International European Consumers Centre Network framework which aims at offering consumers support in relation to their activities within European markets.

The main entity dealing with consumer matters is the Malta Competition and Consumer Affairs Authority (‘MCCAA’).The Director General of the MCCAA may introduce regulatory measures to protect consumers against breaches of consumer law.

At the most basic level, consumers are entitled to the following rights which must be protected at all times:

1. To have adequate access to basic essential goods and services at reasonable prices and to be able to choose from a diverse range of goods and services;
2. To be protected against goods, production processes and services which are harmful to health;
3. To have adequate access to information about goods or services which is clear, correct and does not mislead;
4. To form and join consumer associations and to have consumer interests represented in the making and execution of government policy, and in the development of goods and services;
5. Protection from unlawful or unfair trading practices;
6. To receive a fair settlement of just claims including adequate compensation for misrepresentation, shoddy goods or unsatisfactory services; and
7. To effective, quick and inexpensive means of redress in disputes they may have with traders.

Consumers are protected against unfair contractual terms which traders or service providers may insert in a contract or warranty. The law list numerous terms which are prohibited. A few examples of unfair contract terms are:

• Clauses limiting the trader’s liability in the case of damages or default arising from his own fraud or gross negligence;
• Clauses which establish a very short period for notifying the trader of any defects;
• Clauses which prohibit the consumer from exercising any legal rights against the trader in the case of non-performance of a contract;
• Clauses which forces the consumer to waive any ground of claim which he may have against the trader.

The is not an exhaustive list, and the law contains other clauses which are deemed to be unfair and which therefore must not be included in a contract or warranty.

If these terms are inserted, it may be the case that such contract will not be binding on the consumer unless the contract can continue to exist without the unfair term in which case only the unfair term will considered as if it had never been inserted in the contract.

Consumers are protected from unfair commercial practices which are deemed to be misleading or aggressive. Generally, a consumer practice is deemed to be misleading if it contains false information or it is likely to deceive the average consumer, even if the information is correct.  Moreover, a commercial practice shall also be regarded as misleading if it omits material information that the average consumer needs to make an informed decision or if the trader hides or provides in an unclear, ambiguous or untimely manner such material information.

Additionally, a commercial practice shall be deemed to be aggressive and therefore prohibited if impairs the consumer’s freedom of choice due to harassment, coercion or undue influence which may cause him to make a transaction decision that he would not have otherwise made.

Please note that the aforementioned practices are not exhaustive and are listed only by way of example.