New rights for customers voted in

Consumers now have – or soon will have - many new or improved rights, thanks to the Loi Hamon

28 May 2014
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CONSUMERS now have – or soon will have - many new or improved rights, thanks to the Loi Hamon law which covers matters from cancelling insurance to the preparation of restaurant food or the cost of car parking. Here we look in detail at some of the key changes involved.

THE LOI Hamon has been hailed by consumer groups as a major step forward in consumer rights.

So called from the former Consumer (now Education) Minister Benoît Hamon, the law is especially interesting with regard to insurance policies – which people will be able to cancel much more easily.

It also introduces for the first time a French model of the “class action” where a group of consumers with a similar grievance wish to take legal action against a firm en masse.
However there is also a raft of other matters affecting daily life, which will now enter into force bit by bit as various decrees are signed off. The introduction dates of some decrees, such as for the class actions, are now unclear due to the recent cabinet reshuffle.

The overall law however is now on the statute books after final checks by the Constitutional Council. The council blocked one measure - creating a national register of people’s outstanding loans, overdrafts and ‘payment incidents’ (where your account was not in funds to pay a cheque or direct debit etc) that would have been consultable
by lenders.
The so-called fichier positif was deemed an unjustifiable intrusion into people’s private affairs.

“Though it’s not a panacea, the Loi Hamon is certainly a real step forward,” the director of leading consumer body UFC-Que Choisir, Cédric Musso, told Connexion.

“The creation of the French class action, notably, which finally allows joint action by a large group, is a real advance, also the fact that now, when a judge declares that a clause in a contract is improper, that will automatically apply to all similar contracts, not just the one he’s looking at.

“The powers of anti-fraud officers to levy fines, without going to court, have also been much increased, so they will be more dissuasive, and they will be allowed to do “mystery shopper” style checks.”

The Director-General of another leading consumer group, Familles de France, Thierry Vidor, said: “There are little things that could be improved, as always, but overall this is a satisfying law for families. It is very positive.”

Insurance
A KEY measure, awaiting a decree, allows people to cancel home or car insurance policies at any time after one year. Currently you can only cancel at one specific time of the year - in the run-up to an annual renewal date or the policy is automatically renewed.

Mr Vidor said: “This is certain to lower the cost of insurance [due to increased competition], which is very good news for purchasing power, although there is a risk that firms will reduce some of the levels of cover to compensate so we will be watching out for that.”

UFC-Que Choisir say the decree will notably clarify exactly which kinds of policy will be concerned.

With application from July 26, home buyers will also have new rights with regard to borrower’s insurance.

Instead of having to stick with the insurance taken out at the time of the purchase (often one proposed by the lending bank), buyers will now be able to change to any other policy offering the same guarantees, within one year.
This will boost competition among insurers, Mr Musso said.

Longer guarantees
THE LEGAL guarantee when you buy a product will be two years instead of six months, effectively extending the period during which if something goes wrong it is assumed to have been due to a fault when you purchased it.

Nonetheless, in cases of disputes it could still ultimately be necessary to go to court (eg. the local tribunal de proximité) to have this enforced. This measure will come in in two year’s time.

Suppliers must now inform customers of how long spare parts will be available and (pending a decree) if it becomes necessary, the supplier should provide the spare parts needed within two months. Mr Musso said:
“The increase to two years, is a real advance, because it makes the legal guarantee really effective and will act against shops trying to offer overpriced extended guarantees. It will also encourage makers to improve the durability of their products.”

Tougher fines
THE POWERS of the anti-fraud body DGCCRF are increased with fines in some cases being multiplied by as much as 10 for some kinds of fraud. A judge would be allowed to increase this, where appropriate to 10% of turnover. For example, fraudulently labelling food as being Label Rouge or biologique (organic) could incur a fine of €300,000 instead of €37,500.

Home-made food
RESTAURANTS will be required to state on menus if dishes are fait maison – that is made on the premises.

A decree, expected by July 1, will clarify details such as which boughtin processed foods will be acceptable and whether a specific logo should be used. The law also includes a rule that the country of origin of meat must be mentioned on processed food.

Online buying
SEVERAL new measures are now in force relating to online buying, or buying after being telephoned or otherwise being sold something outside of normal shop premises. There is now a “cooling off” period of 14 calendar days to change your mind, instead of seven. Websites must no longer pretick certain options – everything you pay for must be selected deliberately or you may ask for them to be refunded.

In the absence of any other period specified in the contract, the firm must supply the goods in 30 days, otherwise the buyer may demand reimbursement (plus interest, in the case of extended delays).

Cold-calling
AS OF June 14, if someone cold calls you with an offer they must follow this up with a confirmation by letter or email, which you must accept before you are committed.

Also, at the start of the call they must state their name or the company they work for. Using a concealed number is now not allowed.

The current “Pacitel” list on which you can sign up to ask not to be coldcalled is widely seen as ineffective (a number of large telemarketing groups had said they would respect it but it is seen as toothless). It is to be replaced by a new, free, liste anti-prospection, which firms will have to consult before calling people, although there is an exception for firms calling existing customers – and for newspapers and magazines. Firms breaking the rule could be reported and fined. The precise timing for this is unclear.

Car parks
FROM JULY 1, 2015, parking in car parks must be charged by the quarter hour and not the hour. Mr Musso said: “This will have an impact on prices but will also get traffic moving more, because there will be no incentive to leave your car parked a long time to make the most of their ticket.”

Lawyers
AVOCATS (who give legal advice and/or represent people in court) may now advertise as well as directly offering their services. This was previously not allowed and follows a European Court of Justice decision.

Glasses
WHEN doing an eye test, ophthalmologists must now provide on the prescription the measurement of the gap between the pupils, which glasses providers require. Not always done previously, “this will effectively free up the market for glasses online,” said Mr Musso.
In turn, it is intended that this will bring increased competition to a sector in which prices are high compared to internationally.

In a separate measure, contact lens fluid will now be available in supermarkets, not just pharmacies; as will pregnancy tests.

Misleading adverts
People who do odd jobs in the home must not make use of any contact details, logos or other details relating to public services, giving the impression they have official approval – at the risk of a €100,000 fine. (Awaiting a decree).

Buying at a trade fair
IF YOU buy at a trade fair there is no cooling-off period. As people do not necessarily know this, sellers will be required to inform them before the sale and in the contract. (Awaiting a decree).

Contracts for services
All FIRMS providing services on contracts that involve annual “tacit renewal” must now send a letter or email each year at the renewal date mentioning specifically the right to cancel, highlighting the renewal deadline date.

Parliament reportedly had private television channel Canal+ in mind, which, says the Institut National de la Consommation, has often just mentioned this right in passing in its magazine, along with TV schedules.

Class actions
CLASS actions will be possible for groups of customers who have suffered the same kind of harm from a firm. The decision to take the action must be taken by one of the national consumer groups, which will apply to a judge on behalf of some of those affected. If the judge agrees there is a case against the firm, he or she will fix a period during which other people affected can join the action – likely to be between two and six months.

Photo: Oliver Rowland

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