Guide through the Albanian consumer law

December 2017important feature to his goods in comparison to what is offer by other seller, hiscompetitor. Consequently, a free-of-charge commercial guarantee shall be one of thereasons why consumer shall opt to buy goods from that seller. In such a manner, thecommercial guarantee represents an additional part of the offered equipment thatcomes with the goods.For instance, an example of such a commercial guarantee could be the right ofconsumer to simply return the product and get the money back as his first optionwithin the first six months of acquiring of the goods which would be an advantage incomparison to the statutory guarantee and what other sellers offer. In other words, incase of such a commercial guarantee, consumer would not have to wait for theoption to return acquired goods and get his money back as only his secondaryoption, subsidiary to the impossibility to repair or replace goods in case of lack ofconformity as provided by the rules on statutory guarantee, but he could directlyterminate the contract without any negative consequences.Second, the other type of a commercial guarantee that may be offered by seller isthe one for which seller demands compensation from consumer. In other words,consumer needs to pay for his additional rights he is obtaining on the ground of acommercial guarantee. These guarantees are typically aimed to offer a higher orlonger duration of protection to consumer than the one offered by statutoryguarantee, so consumer feels more secured about his goods, in particular in caseswhen it is something very valuable, such as a car or a computer.For instance, an example of offering to consumer a commercial guarantee againstcompensation would be the case when the seller offers a commercial guarantee toconsumer which would enable consumer to repair the acquired goods in all thecountries of the World where particular global brand is sold by representative sellers.In such a manner, consumer’s statutory right to repair or replacement would bebroadening to be applied in all countries where authorised sellers of that brand exist.An excellent example is a portable computer, a lap top, that consumer would be ableto repair free of charge at any place he may go for pleasure or business purposes incase such a computer gets broken.Also, another example is the extension of the duration of the statutory guarantee forthe period longer than the statutory one of two years, for instance that consumerwould have the same rights for the period of four or five years. In this case,consumer is granted the same quality and quantity of the rights as per the Law onconsumer protection itself, but the validity of these rights overpasses the statutoryperiod of two years.In the case of relation between the statutory and commercial guarantee twoobligations of seller are fundamentally important and necessary to be respected forlegally acceptable behaviour of seller while offering any of the two types ofcommercial guarantees. First, while offering his commercial guarantees, both theones offered free of charge and the others offered for a remuneration, seller mustalso inform consumer about the existence, scope and content of the existing two-year statutory guarantee. This is essential since in practice shows that in manycases, no reference is made to the applicable legal guarantee, and only commercialguarantees are presented. 50

        Guide through the Albanian consumer lawSecond, seller must also inform consumer about the advantages of the commercialguarantee he is offering in comparison to the statutory one. In that sense, a fulltransparency is required. For instance, that the commercial guarantee extends theperiod to four years or that consumer may claim lack of conformity with the sellers inother countries. Consumer must be clearly and fully aware of one he gets with thecommercial guarantee and seller must not use the word ‘guarantee’ unless consumeris granted with more rights than the one given to him by the Law on ConsumerProtection.Otherwise, seller’s failure to present the existence of statutory guarantee toconsumer and to compare their contents shall certainly represent a form of unfaircommercial practice and thus shall be sanctioned. Depending on the facts of eachcase, it will either represent a form of one of the thirty-one commercial practiceswhich are always considered as unfair, i.e. the one which one points that an unfairpractice will be the one in which trader is presenting consumer’s statutory rights asthe rights trader is offering or one of the forms of misleading action or misleadingomission. The provision on misleading actions of the Albanian law as one of its formsexplicitly identifies trader’s provision of false information or even presentation of trueinformation which due to its overall context is misleading in relation to consumer’sstatutory guarantee, i.e. a mandatory two-year period of guarantee.For a seller to breach these provisions of consumer legislation, it is enough that heomits to inform consumer about his statutory guarantee while offering his commercialone, and it irrelevant whether the commercial guarantee is offered free of charge orfor remuneration. Also, such a liability of trader is objective; it is irrelevant whether heintentionally or negligently failed to correctly present the existence of statutoryguarantee to consumer and to compare their contents.Concrete examples of non-allowed and illegal offers of commercial guarantees wouldinclude:‐ “Our cars are guaranteed for 1 full year and unlimited mileage”‐ “ Our guarantee covers materials, but not labour”‐ “No guarantee whatsoever applicable to our second-hand products” (as this suggests that the legal warranty does not apply, but consumer shall buy a commercial guarantee)‐ “Only with us, you get a total two-year coverage for any defects that may occur with your oven”‐ “Buy your commercial guarantee and do not think of any problems that may arise from your fridge within the next 18 months”In the Member States of the European Union, misusing of the commercial guaranteerepresents one of the most common infringements of consumer legislation and this iswhy the Albanian Consumer Protection Commission has to be particularly careful inthis very sensitive area.3.3.9 How is the Albanian Consumer Protection Commission supposed toassess the conformity?For the Albanian Consumer Protection Commission, it is important to emphasize thatthe seller is responsible for occurrence of any kind of lack of conformity that existedat the moment of delivery of the goods to consumer irrespectively of whether seller 51

December 2017was aware of the existence of such lack of conformity. This means that seller’sresponsibility is objective and will always apply, so his defence cannot be based onthe justification that he was not aware of it or that he overtook all necessary measureto protect defectiveness to occur. For instance, the seller could not say that he didnot know that the acquired oven does not work because he did not try it or that theshoes are not waterproof because it was shoe producer who claimed them to bewaterproof.Further to this, seller will be also liable for lack of conformity that occurs after thedelivery if it is caused by a pre-delivery cause. For example, car which is workingperfectly at the moment of delivery, but then the engine gets broken as aconsequence of systemic manufacturer’s fault.Equally, seller will be responsible for the lack of conformity that could have beeneasily noticed by the consumer in case when trader claimed that the goods are inconformity. In other words, consumer negligence in these cases is irrelevant since itwas caused or maintained by the seller. For instance, consumer looking for a winterjacket ending buying a thin jacket which obviously looks as a thin jacket for autumn,but which seller described to consumer ‘as a warm jacket perfect for winter purposes’so that he can be worn without problems during the month January, but which turnsout not to be suitable at all for the cold winter season.Accordingly, in case of the lack of conformity, the consumer will have the rights toreplace or have the goods repaired or, as the second alternative, the right to ask forprice diminution or contract termination.3.3.10 ECJ judgements on consumer salesIn Messner (Case C-489/07 Pia Messner v Firma Stefan Krüger [2009]), the ECJhpointed out that in case of consumer choice to terminate contract, trader is notallowed to demand any kind of compensation from consumer for the usage of goodswhich turned out not to be in conformity with the contract.In Weber (Joined Cases C-65/09 and C-87/09 Gebr. Weber GmbH v Jürgen Wittmerand Ingrid Putz v Medianess Electronics GmbH [2011]), the ECJ has emphasisedthat a trader is always obliged to bear all the applicable costs of removing defectivegoods and instalments of the ones with which they were replaced unless thisrepresents a disproportionate cost for the trader.3.4 The rules on doorstep selling and distance selling contracts3.4.1 Special forms of consumer contractsDoorstep selling and distance selling contracts are types of consumer contracts inwhich consumer deserves special protection due to the particularities of thesecontractual relationships. Doorstep selling contract include those contracts which areconcluded out of business premises of trader, at a place when consumer does nottypically expect to conclude a contract, so he is simply not mentally prepared toresponse adequately to trader’s commercial tactics. For example, those are thecases when trader comes at consumer’s home or office to offer his products ororganizes an excursion trip for consumer where he would promote his products. 52

        Guide through the Albanian consumer lawIn case of distance selling contracts, the particularities are derived from the fact thatwhile negotiating and concluding distance selling contract, consumer and trader arenot simultaneously present at the same place and that consumer typically cannot seeand examine directly the product he is acquiring. The examples of these types ofcontracts would include contracts concluded over the Internet, phone, email, regularmail.Accordingly, the existing particularities of these types of contracts and the necessityto provide an adequate protection to consumers resulted in the fact that regulation ofdoorstep selling was actually the first common European piece of legislation adoptedin the area of consumer contract law. That was Directive 85/577/EEC on doorstepselling contracts which was adopted already in 1985. Directive 97/7/EC on distanceselling contracts was passed in 1997, as a common European regulatory response tothe development of modern technologies and Internet as a ‘market place’, inparticular, which led to an immense increase of distance selling. The European Courtof Justice developed a significant case law on the ground of these two directives.Eventually, the rules of these two directives were unified and further developed byone legislative piece, Directive 2011/83/EU.3.4.2 Two fundamental rights of consumersBoth in case of doorstep selling and distance selling contracts, two rights ofconsumers are fundamental: the right of information and the right of withdrawal. Theright of information secures that consumer receives all relevant information fromtrader that consumer may need to make an informed choice, bearing in mindparticularities of these contracts where asymmetry of information between consumerand trader is especially noticeable. This is why the information requirements aremore demanding for these two types of contracts in comparison to the generallyapplicable duty of information.The right of withdrawal from a contract represents the second fundamental right ofconsumer, granting him with a fourteen-day cooling off period in case of conclusionthese two types of consumer contracts. Accordingly, consumer may freely decidewithin the period of fourteen days to withdraw from a contract without the need toprovide any explanation or justification to trader and without any negativeconsequences for him. In such a manner, consumer is given an additional period andthe second chance to slowly and carefully re-consider his economic decision and toeventually decide whether or not he wants to stay with a doorstep selling or distanceselling contract he concluded.3.4.3 Scope of applicationDoorstep selling contract is under the Albanian law defined as a contract under whicha trader supplies goods or services to a consumer and which are concluded:‐ during an excursion organized by the trader away from his business premises, or‐ during a visit by a trader • to the consumer's home, or • to the home of another consumer, or • to the consumer's place of workwhere the visit does not take place at the express request of the consumer. 53

December 2017The rules on doorstep selling contract will also apply to:‐ contracts which were negotiated out of trader’s business premises;‐ contracts in respect of which an offer was made by the consumer out of business premises of trader.Distance selling contract is defined as a consumer contract that concerns any type ofcontract concluded between a consumer and a trader through prevailing use of oneor more means of distance communication. Accordingly, for application of the ruleson distance selling it is not mandatory required that the contract is exclusivelyconcluded through means of distance communication, but it is just required that thismeans was prevailingly used.The means of distance communication are characterized by the fact that the traderand the consumer are not, at the time when the contract is negotiated and/orconcluded, simultaneously present at the same place. As means of distancecommunication particularly used are the following means:‐ mail order catalogues,‐ phone,‐ fax,‐ email‐ SMS‐ internet,‐ television,‐ personalised direct mailing• door-to-door distribution of leaflets.Financial services are not excluded from the scope of application, but specific rulesapplicable to the marketing and sales of financial services are, to a large extent,subject to a separate law, the Law on protection of users of financial services. Theexamples of financial services include: electronic or home banking, getting credit atdistance, buying insurance via internet, making investments or buying personalpension schemes at distance.The Albanian law provides a broad set of obligations for a conclusion of distanceselling contract. These not only relate to the information dimension of therelationship, i.e. requiring that relevant information be given to the consumer in orderto ensure his actual consent, but they also regulate the content itself of the contract,i.e. certain contract terms in order to protect the consumer against possible abusesresulting from the fact that there is no physical presence of the trader and thereforeno chance of and no chance either to view the product.3.4.4 Consumer’s right to informationConsumer’s right to information was recognized as a fundamental right of consumerby the European Court of Justice. Equally, since its early development, consumerpolicy was focused on how to secure that trader will provide consumer with allrelevant information in order the remedy the information asymmetry that exists in therelationship between trader and consumer. The Albanian law imposes the sameinformation obligations for distance selling and doorstep selling contracts. Besidesgeneral information duties that apply for all types of consumer contracts, trader 54

        Guide through the Albanian consumer lawneeds to disclose an additional set of information prior to the conclusion of thecontract with consumer. These pieces of information are:1. the main characteristics of the goods or services concerned;2. the identity and address of the trader;3. the price of the good or service, including all taxes;4. the arrangements for payment, delivery and performance;5. the existence of consumer’s right of withdrawal;6. after sales services and existing commercial guarantees;7. the period for which contract is concluded and if it is concluded for an indefinite period of time, the conditions under which it can be terminated;8. the minimum duration of contractual obligation of consumer;9. the existence of obligation of consumer on any kind of pledge or mortgage;10. information on the procedures for exercising the right of withdrawal;11. the geographical address (the use of P.O. boxes is not allowed) of the supplier’s place of business to which complaints can be addressed;12. the existence of code of conduct and the manner in which that code may be checked;13. the price of using the means for communication on distance;14. the fact that consumer is protected by the Law on consumer protection;15. the fact that consumer will use his right of withdrawal in case trader starts providing his services, with an explicit consent of consumer, before the expiry of cooling-off period;16. possibility of out of court settlement of disputes.All these pieces of information trader do not only have to disclose, but have topresent them in a manner that consumer will enable to properly and fully understandthem and profit from them. Otherwise, it will be considered as if trader had notpresented at all that information. That would be the case, for instance, withpresentation of the address of trader in a very small, illegible font that consumer canhardly read.The burden of proof that all relevant information has been provided is always ontrader. Consequently, in case of any suspicion, trader needs to prove that hedisclosed all required information in a proper and timely manner. Failure to provideinformation represents one of the grounds on which consumer may ask for contractrescission within the period of one year (objective period) in case trader failed toprovide any of these pieces of information. Moreover, trader’s failure to provideconsumer with information will represent a form of misleading omission and thus willalso be sanctioned under the rules on unfair commercial practices.This confirmation of all information must always be in writing or on another durablemedium (for example, a web page an email) and provided in plain and intelligiblemanner and in good time during the performance of the contract and at the latest atthe time of delivery, unless it has already been given to the consumer prior to theconclusion of the contract in writing or on another durable medium available andaccessible to him.3.4.5 Consumer’s right of withdrawalThe second most important right consumers is granted in case of contractsconcluded on a distance or away from business premises of trader is the right of 55

December 2017withdrawal within the so-called cooling-off period. Accordingly, the consumer hasthe right to renounce the effects of his undertaking within a limited period. A generalperiod for withdrawal is the period of fourteen days.In order to make the right of withdrawal effective, traders are always required togive consumers a written notice informing them about the existence of their right towithdraw from the contract, so that consumer gets familiar with the content of thisright of his. This notice must be dated, identify the contract concerned and includethe name and address of a person against whom the withdrawal right may exercise.It must be given to the consumer prior to conclusion of the contract. Trader issupposed to give consumer a form for contract withdrawal on a durable medium(paper, disc…). Provision of an Internet address, for instance, cannot be consideredas provision of information on a durable medium since Internet address is not aconstant, but changeable category.The consumer who is party to a doorstep telling or distance selling contract isallowed to terminate the contract without being obliged to give any reason, andwithout having to pay any cost. He simply must send a written notice to the traderbefore the end of the fourteen days period. The notice must be sent to the addressindicated by the trader. The only condition is that the expression of will has to be inwriting since this is the only manner that can prove its existence.The giving of the notice has the effect of releasing the consumer from any obligationsunder the cancelled contract. Proof of sending the notice will be sufficient evidencethat due notification was made and of the date when it was made.3.4.6 Impact of withdrawal on linked contractsConsumer’s withdrawal has also impact on linked contracts where particularlyimportant is a consumer credit contract. Namely, what happens in practice is that forcertain products, especially those which are more expensive, consumer demandsfrom a bank or some other institution a credit in order to pay his product, for instancea car. In case when consumer decides to withdraw from a contract on the ground ofwhich he acquired his car where such a contract was concluded using a distancecommunication medium or outside of business premises of trader, all relatedcontracts, such as those on consumer credit with purpose of buying that car shallalso terminate automatically once consumer has decided to withdraw.The trader is obliged to inform the creditor of consumer’s decision to withdraw from acontract. In case trade omits to do so, he is responsible for all damage arising fromhis failure to inform creditor that consumer would suffer. Moreover, the failure oftrader to do so will also represent a form of unfair commercial practice. The creditoris obliged to immediately return the money to consumer and within thirty days atlatest, together with all interest rate.The same rules apply also to other possibly linked agreements, such as leasingcontract or after-sales services contract. Moreover, it is irrelevant whether the otherparty in linked contract is the trader or a third party: contract gets terminated in anyway. This is fully in accordance with the main objective of right of withdrawal which isconsumer’s possibility to get rid of all kinds of obligations related to a distance sellingor doorstep selling contract. Only with releasing consumer from obligation, the right 56

        Guide through the Albanian consumer lawof withdrawal can reach its objection and consumers get to be motivated to use.Therefore, it shall be secured that all linked contract also gets terminated.3.4.7 Contract law rules on unsolicited delivery and supplyInertia selling or unsolicited supply is forbidden both under the rules on unfaircommercial practices and under the rules on distance selling contracts of theAlbanian law. Whereas the rules on unfair commercial practice define inertia sellingas one of the thirty-one practices which are always to be considered as unfair, theprovision on inertia selling established in the part of the law on distance sellingcontracts are rather focused on consequences of inertia selling.Inertia selling means that consumer is provided by goods or supplied with serviceswhich have not been ordered beforehand. Trader uses these commercial tactics tomake consumer acquire their products in such a manner. However, Albanian law isclear on two issues. First, in case when consumer does not make any response inrelation to the goods or services trader offered to him, this in no case may representconsumer’s consent of the offer, i.e. consumer silence can in no case be consideredas his acceptance of the offer and in such a manner conclusion of a consumercontract.Second, in case of inertia selling, such consumer is exempted from performance ofany consideration in the case of unsolicited supply. In other words, consumer isallowed to keep the goods or to freely use services he was sent or offered by traderwithout consumer asking for it, thus acquiring full ownership over such goods and theright of usage of services.The examples of inertia selling would include:‐ Sending a book or a record or a sample of a new food product to a consumer and asking for payment, without any order being placed by the consumer;‐ Trader coming to consumer’s home and after cleaning it with a vacuum cleaner he was offering, asking consumer to pay for the cleaning unless consumer decides to buy the vacuum cleaner;‐ Continuing to supply a good or a service to a consumer after the contract was terminated.However, this general rule has two main exceptions:The first exception is the case when, instead of the goods or services whichconsumer ordered, trader sends or supplies consumer with different goods ordifferent services of the same price and quality as the one required by consumer.That would be the case when consumer ordered a camera of one brand and gets thecamera of the other brand of the same quality and price since trader has run out ofthat particular brand.Importantly, this rule only provides that in such cases consumer does not have theright to keep the goods free of charge, and it does not in any manner interfere withthe applicable rules on conformity and trader’s responsibility for occurrence of anylack of conformity within the period of two years. Consequently, consumer will nothave the right to keep delivered camera free of charge, but he will certainly have theright to ask for camera replacement, since he was delivered a type of camera he didnot order, or, eventually, to ask for contract termination of price diminution. 57

December 2017The second exception will be the case when trader informs consumer that he is notobliged to accept the offered goods or services and that consumer will not bear anycosts of product return. This will be the case, for instance, when trader sends aparticular goods but he clearly and timely informs consumer that he is not obligedthese goods and that trader will cover all expenses of product return. Importantly, thissecond exception is only exception to the potential consequences of inertia sellingunder Albanian law, but does not affect the fact that such a behaviour of trader willbe in any case sanctioned under the rules on unfair commercial practices.3.4.8 How should the Albanian Consumer Protection Commission check thefulfilment of the withdrawal obligation?A general rule is that the given period of fourteen days for withdrawal is counted asof the date when consumer signs the order form in case of contracts concluded outof business premises of trader. In case of distance selling contract, the period iscounted as of the date when consumer has received the product he ordered. It isconsidered that consumer has timely used his right if he dispatches his decision towithdraw within the prescribed period of fourteen days, being absolutely irrelevantwhen trader receives it.If the consumer exercises his right of withdrawal, the product which is the object ofthe contract must be returned to the trader within fourteen days from the day after theday on which the consumer has notified the trader of his decision to renounce. Onthe other side, any sum paid by the consumer to trader in the name of contract fromwhich consumer withdrew shall be reimbursed to consumer immediately and withinthe period of thirty days at latest. Only the costs directly related to returning theproduct may be put on his charge under the condition that consumer was previouslyduly informed about the existence of these costs.It is essential that consumer gets informed about the existence of his right ofwithdrawal. The presumption which under the Albanian law cannot be proven wrongis that consumer is not aware of his right and that trader must provide him with suchinformation. Otherwise, in cases when trader fails to provide consumer with suchinformation, the withdrawal period shall be extended for an additional period of oneyear as of the date on which the period of fourteen days expires. Again, thisprolongation shall always apply irrespectively of the fact whether consumer couldhave or should have known about his right of withdrawal, since, for instanceconsumer in an experienced on-line buyer or he is a University professor ofconsumer law. This does not and cannot change anything in that aspect.3.4.9 Relevant ECJ case lawIn Buet (Case C-328/87 Buet v Ministere Public [1989] ECR 1235), the ECJ pointedout that the consumers with lower level of education as particularly vulnerable to thesale of inadequate language learning materials, where the purchase of this kind ofmaterials would not only cause financial loss to the consumers but would also havelong-term negative effects on their employment prospects.Hence, the Court considered the French measure of total prohibition of the sale ofthis kind of education materials as being in accordance with article 30 TEU. Such adecision was adopted despite the existence of the right of contract termination by the 58

        Guide through the Albanian consumer lawconsumer as provided by Directive 85/577/EEC, which consumers could use toremedy its decision. However, vulnerable consumers in Buet represented anexception in which the right of rescission was considered as an insufficient tool forprotection.3. Consumer OrganisationsThe basic requirements for a consumer organisationIn Albania, as it is the case in all Member States of the European Union, consumerorganisations are expected to be one of the main pillars of the system of consumerprotection. An efficient system for consumer protection cannot exist without adeveloped and independent consumer movement. This is particularly true when itcomes to enforcement. Even the best consumer legislation remains ineffective ifthere is no developed consumer movement. Consumer legislation is supposed just toprovide an adequate legal basis for establishment and activities of consumerorganisations as key players of consumer protection system.The main requirements that any organization willing to be a consumer organisationinclude:‐ Establishment on a voluntary basis, i.e. that it was not established by the State, apolitical party or by the Law itself, but that it represents a free union of consumerswho want to fight for protection of their rights and interests‐ Independence from traders, i.e. that it cannot be established, dependent on, orfinanced by a trader or group of traders since this would be contrary to its foundingideas and philosophy where traders and consumers are seen as opponents when itcomes to their interests. The prohibition of financing is subject to a very limitedexception which includes that financing may be, exceptionally, accepted from tradersas a compensation for diverse form of education and training of consumer protectionthat consumer organisations may perform with the aim of familiarisation of trader withconsumer protection and alignment of their behaviour with consumer legislation.‐ Independence from the State bodies, i.e. these organizations must be non-Stateorganization in order to be guaranteed their independence, accordingly State officialsare not allowed to have leading functions in such associations, but they can certainlybe members in their capacity of consumers. Financing of activities of consumerorganisations represent an exception to this, since the State may play a particularlyimportant role when it comes to financing of consumer movement, but this financingprocess has always to be transparent, just and fair.‐ Establishment of organizations whose aim is to protect the interests of consumers,i.e. the main objective shall be consumer protection since major efforts of anorganization which tends to be a consumer organisation shall be directed towardsconsumer protectionConsumer organisations do not necessarily need to be organized on national orState level, but they may also be organized regionally or locally and concerned withthe defence of regional, local or neighbourhood interests. Moreover, consumer 59

December 2017organisations may freely decide to get united in diverse forms of consumerassociations in accordance with the law that regulates freedom of organizations.The activities of consumer organisationsThe activities of a consumer organisation include:‐ consumer information, education, counselling and provision of aid to consumers‐ carrying out of independent comparative testing activities‐ cooperation with the State and other institutions and bodies in Albania and abroadThese activities are to be performed by any consumer organisation, irrespectivelywhether it is registered or not. However, as pointed out above, certain rights areexclusively reserved for registered consumer organizations, in particular thoserelated to financing and representation. These rights are limited to the registeredconsumer organisation since it is presumed that they possess adequate level ofknowledge, experience and skills and thus are representative models of consumermovement which has been verified by the competent State authority.4. Education and information of consumersEducation of consumersThe activities of consumer organisations particularly include the activities related toeducation and information of consumers. Consumer’s rights to education andinformation have been identified as two fundamental rights of consumer since thevery beginning of development of consumer policy. Education means the need toconstantly put efforts on education of all citizens about their rights and obligations asconsumers, as any citizen is automatically also a consumer, and educationrepresents a necessary prerequisite that consumers get acquainted with their rightsand obligations.A general observation is that consumers are not sufficiently aware of their rights andobligations as consumers and the general idea and concept of consumer protection.For instance, consumer shall be educated about the existence of its right ofconformity with the contract, i.e. a fridge that the consumer has bought stopsworking, consumer is entitled first to ask for its replacement or repair and, if that isnot possible, to ask for contract termination (or price diminution). Similarly, consumermust be taught how to behave properly at the market and to provide an adequateresponse to commercial tactics of consumers.This is why efforts directed towards education of consumers need to be put, so thatthey can get familiar where particularly important is the role the consumerorganisations may and shall play together with the State. In that sense, differentactivities are to be organized by consumer organizations and the State, separately orsometimes even jointly, such as education campaigns, programmes and particularlyimportant introduction of consumer education in the primary and/or secondaryeducation system of Albania. Besides education of consumers, another importantelement of education process is education of all persons in the system of consumer 60

        Guide through the Albanian consumer lawprotection, in particular of judges, civil servants, arbiters or mediators. In that sense,it is very important to underline that only person or institutions, in particular aconsumer organisation, which possess an adequate level of knowledge of consumerpolicy, independence, impartiality, skills, education and qualification may be allowedto perform education of consumers.Information of consumersBesides education, provision of consumers with all relevant information about aproduct, market or trader represents a significant task that consumer organisationshall also perform. Importantly, providing consumer with information as understoodherein shall be distinguished from information requirements in the context of one ofthe main pre-contractual obligations of traders. Namely, information’s requirementsimpose on trader a duty to disclose to consumer all relevant information in hisadvertisements and before conclusion of a consumer contract, where a provision ofinformation as a task of consumer organization understands the obligation ofconsumer organizations to provide objective, impartial, independent and fairinformation to consumers about certain products, market, traders and otherconsumer related and relevant topics.In that aspect, the task of consumer organisations to provide information is closelylinked to their tasks in the area of consumer education since again through informingconsumer about some consumer relevant topic, consumer organisations are alsoeducating consumer. That would be the case, for instance, with presentation of theresults of a survey that a particular consumer organisation performed in relation togeneral satisfaction of consumers with a particular type of services, such as forinstance water supply in diverse Albanian cities or with the quality characteristics ofcertain product, such as milk products of diverse producers. Such information hasalways to be objective.Public presentation of this information may have a material impact on consumerbehaviour, particularly bearing in mind that they typically perceive consumerorganisations as institutions which are independent, impartial and which fight forprotection of consumer interests. Therefore, such information must be, also, alwaysindependent, impartial and not to be used as an advertisement for particular trader orproduct and all tests and surveys shall always be performed in a manner whichwould guarantee such a quality of information that consumer organisation isproviding. Otherwise, a consumer organisation will breach the founding principle onwhich consumer movement is grounded.6. State vs. not state – enforcement of consumer lawThe significance of injunctions procedureEU Consumer Law when it comes to enforcement provides very scarce rules. Onlythree pieces of legislation are adopted to provide common European legal frameworkfor enforcement: Directive 2009/22/EC on injunctions, Regulations 2006/2004 oncooperation of competitive authorities and Directive 2013/11/EC on alternativedispute resolution. Otherwise, Member States, as well as Albania as a candidatecountry, are left with their procedural autonomy to establish systems of enforcement 61

December 2017that suit best to the particularities of their national legal systems under the conditionthat they secure efficient application of consumer law in practice.The system provided by Directive 2009/22/EC on injunctions is aimed to protectconsumers from the potential occurrence of negative consequences of trader’sbreach of consumer legislation which hinders collective interests of consumers. Inthe Member States of the European Union, the right to initiate the injunctionprocedure is given to competent administrative authorities (e.g. the Ministry in chargeof consumer protection of a Consumer Ombudsman) and/or consumer organisationand even in certain cases to individual consumers. In that aspect, there is no unifiedapproach, but unanimity is respected when it comes to the fact that all MemberStates have an established and operation system of injunction procedure.Through injunction procedure what is basically required is that trader ceases with itsbreach of consumer law which endangers or likely to endanger consumer rights andinterests. This is why efficiency of the competent authority is particularly required inthe injunction procedure. Cessation orders are not aimed at obtaining compensationfor damages caused to consumers as a result of the unlawful practice; their objectiveis rather to prevent further violation of the law by requiring from the trader to stop toact unlawfully.Relevant ECJ cases for the enforcementIn Köck (Case C-206/11 Georg Köck v Schutzverband gegen unlauteren Wettbewerb[2013]), the ECJ had to assess the legality of provision on clearance sales as definedby the Austrian Federal Law on Unfair Competition through which Austria transposedthe provisions of the UCPD in its national legal system. This provision represented aform of preventive measure requiring traders to acquire permission from relevantstate authority in case of their intention to initiate clearance sales previous to thecommencement of the sales. Namely, in case of clearance sales, ex ante system ofprotection from the unfair commercial practices seems to be relevant since ex postseems inefficient due to the fact that one clearance sale has ended, trader willprobably not exist anymore, and so no sanction could be effective.In its judgement, the Court pointed out that it is true that the anticipatory orpreventive measures can be in some cases more adequate and more appropriatethan subsequent measures, but this shall only apply in case of such commercialpractices „whose nature makes such measures necessary with a view to combatingunfair commercial practices“. Moreover, these measures must not simply prohibitcommercial practices under the assumption that they are unfair without assessingthem in accordance with the assessment system provided by the Directive.Despite the fact that Court left the possibility to national legal systems to introduce ormaintain national rules that would ex ante verify whether a practice is unfair, such apossibility in practice, after this decision, is very limited indeed. Through introductionof such limitation, the Court diminishes the scope and impact of inevitableconsequences of procedural autonomy which result in a divergence of approachesamong Member States.In its judgement in Crédit Lyonnais, the ECJ provided some clarification to themeaning of these provisions, in particular what shall be understood as dissuasive(Case C-565/12 LCL Le Crédit Lyonnais SA v Fesih Kalhan [2014]). In that aspect, 62

        Guide through the Albanian consumer lawthe ECJ has already established a rather general principle in relation to the breach ofcompetition law that is always required to be followed by a dissuasive sanction. Thesubject of Crédit Lyonnais was the wording regarding required sanctions for breachof the rules on consumer credit. The question referred to the ECJ by a French courtwas whether sanction provided by French law for creditor who failed to assessdebtor’s creditworthiness before conclusion of a credit agreement shall beconsidered as dissuasive.According to the French law, the provided sanction was that in such a case, acreditor looses the right to contractual interest rate, but once he has lost it, thecreditor becomes entitled to a statutory rate which was, in this particular case, evenslightly higher than the stipulated contractual rate. In other words, it may be noticedthat creditor actually profited from his failure to fulfil the obligation. In order to reachits decision, the Court compared the seriousness of the sanction established byFrench law with the severity of the infringement, in particular verifying whether such apenalty is of genuinely dissuasive effect. Eventually, the ECJ came up with anunsurprising conclusion that this particular sanction does not fulfil the requirement ofbeing genuinely dissuasive as required by EU Law.Moreover, the ECJ also gave some clarification on how fulfilment of requirement ofdissuasiveness shall be interpreted by the national courts. Accordingly, a sanctionwill not be considered as genuinely dissuasive and thus it will not be in line with EULaw in case when the amount that a creditor should receive in case of his failure tofulfil the obligation is not significantly smaller than the amount which creditor wouldhave received if he had fulfilled his obligation. This judgement of the Court iscertainly useful for better understanding of what shall be required for penalties forbreach of consumer law.7. Out of Court Settlement of Consumer DisputesThe forms of alternative resolution of consumer disputesBesides the settlement of consumer disputes before diverse State institution, inparticular the court or an administrative authority, a tendency in the European Unionmay be noticed of a rise of significance of non-State manners of resolution ofconsumer disputed, through a so-called alternative mechanism for resolution ofconsumer disputes. The European Commission in particular supports theestablishment of such schemes. Accordingly, national legislation may adopt rulesunder which the access to the State institutions in charge of consumer protection issubject to the condition that there was the attempt to resolve first particular consumerdispute through a prescribed out-of-court mechanism for resolution of consumerdisputes. However, in no case the existence of such a mechanism may permanentlyblock the access of consumer to the court.Among all possible schemes of alternative resolution of consumer disputes, inpractice two are most common. The first one is through meditation led by a mediator,as an independent and impartial person, both from the consumer and the trader. Themain task of mediator is to reach the settlement through the process of mediation ofconsumer and trader, that they discuss mutually the problem and see how to find asolution that would be acceptable for both parties. The mediator himself cannot adopt 63

December 2017any decision, but only the parties may do so through reaching an agreement. Therole mediator is to secure a peaceful and correct discussion as a prerequisite toreach the agreement and to give some directions to the negotiation process.The second model is consumer arbitration, where the person in charge of resolvingconsumer dispute is one or more arbitrators, chosen either independently or by theparties. Differentia specifica to mediation is that arbitrator, unlike mediator, resolvesthe dispute himself, by adopting an arbitrary decision through which consumerdispute is supposed to be solved. Again, the adoption of such a decision does notpreclude consumer to fight for his rights before the court or other competent Stateauthority.The alternative resolution of consumer disputes brings many advantages not only toconsumers, but also to traders. Namely, it is typically more efficient, more discrete,cheaper and accessible than the system provided before a State administrativeauthority or before the Court. This is the reason why particular efforts are invested indevelopment of these schemes.The existing schemes throughout Europe vary significantly as to their status, form,rules of operation and impact of their “decisions”. Some are just marketing toolspromoted by traders, while others are simple, low-cost and effective arbitration,conciliation or mediation systems. Some result from a one-sided initiative of trade orindustry, others offer a balanced dispute resolution panel ensuring equalrepresentation of both trade and consumers. Some involve the administrationauthorities in charge of consumer affairs, while others remain strictly private. Somehave a decision-making authority, while others issue recommendations.Basic requirements for bodies in charge of alternative resolution of consumerdisputesThe European Commission has developed common criteria likely to guarantee thatalternative dispute resolution systems actually work in the interest and to the benefitof the consumer. A first Commission Recommendation of March 30, 1998 coversout-of-court systems which involve a third-party as arbitrator or mediator. This wascomplemented by a similar Recommendation adopted on 4 April 2001 applicable toout-of-court bodies involved in the consensual resolution of consumer disputes.Eventually, in 2013, the European Commission adopted Directive 2013/11/EU whichregulated in details the alternative resolution of consumer disputes that shall alsoapply in Albania.Accordingly, it is required that all bodies with in charge of out-of-court settlement ofconsumer disputes are established and respect the following principles: the independence of the person or decision-making body, making it impartial and independent from the influence of trader and consumer; the transparency of the decision-making procedures and of the decisions rendered: decisions rendered shall be made public; the adversarial principle, i.e. that all parties must be allowed to present their viewpoints before the competent body and to hear the arguments and facts put forward by the other party, and any experts’ statements; 64

        Guide through the Albanian consumer law the effectiveness of the procedure, implying namely that the consumer has access to the procedure without being obliged to use a legal representative, that the procedure is free of charge or of moderate costs, that only short periods elapse between the referral of the case and the decision, and that the competent body is given an active role in the investigation process; the legality of the decision taken: this may not deprive the consumer of the protection afforded by the mandatory provisions of the Albanian legal system, such as his access to the court; the principle of voluntarism: no one –neither the consumer nor the trader – should be forced to use the out of court scheme; in addition, the decision taken by the body may be binding on the parties only if they were informed of this binding nature in advance and specifically accepted this; the principle of representation, i.e. the right for the parties to be represented or assisted by a third party at all stages of the procedure 65

December 2017ANNEX I: Albanian Consumer Law in PracticeFirst decisions of the CPCAAs already mentioned, one of the most notable aspects of the enforcement ofAlbanian consumer law is the growing practice by way of decided cases of theConsumer Protection Commission of Albania (“the CPCA”). In the period 2009-2012,the CPCA has adopted more than two dozen decisions dealing with specificconsumer complaints. The existence of these decisions is a very promising sign ofactivity of the CPCA as the main institution in charge of enforcement of consumerlaw in Albania. Particularly when compared to other similar jurisdictions in theWestern Balkans, this number of adopted decisions can be described as quiteimpressive, since in the case of the majority of neighbouring EU aspirant countries,the results of the work of competent national authorities in charge of enforcement ofconsumer law are far less remarkable.An examination of the decisions of the CPCA reveals both the common consumerproblems in Albanian markets and the ways in which the Commission can attempt toresolve them. A particularly notable aspect of its practice is that the CPCA hascondemned for breach of Albanian consumer law not only small or medium, privatelyowned enterprises, but also large and powerful market operators, such as banks, theprincipal Albanian suppliers of mobile telecommunications and electrical energy, aswell as state entities. Such decisions seem to suggest that the CPCA is not timid inits consumer law practice and that it is willing to enforce the provisions of theconsumer law even against powerful players.A substantial number of decisions of the CPCA deal with the question of legality ofadvertising practices of traders that may be considered unfair. Unsurprisingly, it is notonly consumers that complain of unfair advertising in Albania, but also competitorswho are also protected by the rules of the CPCA. The rules on unfair commercialpractices are also frequently invoked in cases before the CPCA. This likely reflectsnot only the very wide scope of application of the provisions of Directive 2005/29/ECon unfair commercial practice as confirmed in several decisions of the ECJ, but alsothe lack of any prior general legal framework of general obligations of fair trading ontraders in business-to-consumer relations and sanctions for trader misbehaviour.Commonly the defendants are from sectors where market operators have significantmarket power (and were former state monopolies) and where there are substantialinformation asymmetries between suppliers and consumers, including thetelecommunications and electricity sector, public transport and tertiary education, aswell as financial intermediaries.TelecommunicationsIn Albania, as in the other Western Balkan countries and the EU Member Statesmore broadly, providers of telecommunication services frequently face complaintsabout inappropriate practices towards consumers and are thus the targets ofconsumer protection enforcement. This is both due to the lack of competition in the 66

        Guide through the Albanian consumer lawsector, the consequent imbalances in power and because of the weaknesses in theregulatory scheme for protection of private parties. At least four of the recentdecisions of the CPCA relate to companies operating in the telecommunicationssector.In fact, the very first decision of the CPCA (Decision 1 of 7 October 2009) was basedon a complaint about the permissibility of comparative advertising by an Albaniantelecommunication company AMC, which was initiated by one of its competitors. The2008 CPL includes the provisions on comparative advertising as defined by Directive2006/114/EC on misleading and comparative advertising which establishes the legalframework for fair advertising of comparable products of competitors. The competitorcomplained to the CPCA on the ground that the defendant was violating thecomparative advertising rules and in its decision, the CPCA identified a breach of therelevant law and ordered the cessation of the advertising practice in question.However, the CPCA decided not to impose a pecuniary fine or some other applicablesanction on the defendant, pointing out instead that additional information on thecase was necessary.Given the scarcity of the provided information, it remains unclear whether thisrepresents the CPCA’s final and definite decision or whether it was an interimmeasure because the parties were required to provide additional information on thecase. In fact, if it is the latter, this could be a welcome procedural innovation by theCPCA. The question of interim measures to protect rights under EU law has oftenarisen in various Member State jurisdictions. Similarly, for an efficient system ofconsumer protection, where a quick response may be necessary to avoid on-goingharm, the availability of an interim measure until the adoption of final decision on itslegality can be quite useful.In Decision 8 of 6 August 2010 of the CPCA, the object of the complaint was anothertelecommunications company, namely Vodafone as one of the major providers ofmobile telecommunication services in Albania. The claim was that Vodafone actedunfairly and misled consumers. The complaint was based on two advertisements byVodafone which were ultimately found to omit relevant material information that anaverage Albanian consumer would require in order to make an informed commercialdecision. Vodafone was condemned by the CPCA for engagement in unfaircommercial practices, primarily through advertising of two of its mobile phonepackages. This approach appears to be in accordance with EU consumer law wherethe duty of information represents the most important instrument for consumerprotection.By way of remedy, Vodafone was requested by the CPCA to immediately stop withits unfair advertising practices. However, no pecuniary fine was imposed onVodafone apart from the cessation order, though from the available information it isnot clear why the CPCA opted not to fine the company.A later decision (Decision 14 of 17 November 2011) of the CPCA also dealt with theprovision of information by a telecommunications company to consumers, under therubric of unfair commercial practices. The facts of this decision are quite similar tothe Vodafone decision, in that a telecommunications services provider, Eagle Mobilewas claimed to have breached the rules on unfair commercial practices by theomission of material information from its advertisements. It appears that all or most ofthe material information was in fact provided by the company, but in English and not 67

December 2017in Albanian, which is the only official language in Albania. As a result, Eagle Mobile’sdisclosure of information was useless to any Albanian consumer who does not speakEnglish. The CPCA found that Eagle Mobile’s advertising practice in disputerepresented a form of misleading omission since the required information wasprovided in an unclear, unintelligible, ambiguous or untimely manner.However, in disposing of this case, the CPCA not only ordered Eagle Mobile tocease with the unfair commercial practices as in the case of Vodafone, but alsoobliged the defendant to pay a pecuniary fine. From the available material, it is notpossible to explain the apparently inconsistent approach of the CPCA in the twocases, given that they have very similar facts. One possible explanation for thediverse approaches of the CPCA may lie in the time gap between the cases and thequestion of notice to operators. At an early stage of development and application ofthe 2008 CPL it would be important to put traders and other actors on notice of whatmight be examples of breaches of the consumer law, rather than to start immediatelywith the imposition of more severe sanctions.The question of the legality of the advertising practices was the subject of CPCAaction in Decision 10 of 25 October 2010 in which AMC, the first and still the biggestmobile telecommunication companies in Albania, was sanctioned with a pecuniaryfine and was ordered to cease with a commercial practice that was found to be bothan aggressive and a misleading practice (persistent and unwanted solicitations overthe phone is one of the explicitly listed aggressive practices in Annex I of Directive2005/29/EC on unfair commercial practices). Moreover, the fact that materialinformation was omitted from the advertising was found to represent a form ofmisleading omission in accordance with the transposed article 7 of Directive2005/29/EC on unfair commercial practices.Education and municipal servicesIn the sector of services that were formerly exclusively provided by the government,the CPCA has been active both against new entrants to these markets, as well asagainst the incumbents, even where they are still operated by public entities.The question of misleading advertising was at the centre of a case (Decision 11 of 25October 2010) brought by a complaint of the Tirana State University against itscompetitor, the privately owned European University of Tirana due to its televisionand newspaper publicity campaign. The argument was based on misleadingadvertising both in the business-to-consumer context (i.e., that the publicity misleadsthe consumer in such a way that s/he would not have performed a transactionaldecision had s/he known that the information provided in the advertisement wasfalse) and in business-to-business relations (that such an advertising practice harmsthe competitor).While finding a breach of the 2008 CPL, the CPCA eventually held that no sanctionwas to be imposed on the European University of Tirana since the defendantconcluded an agreement with the CPCA to substantially modify its advertising so thatit is fully aligned with the law. The absence of a sanction may be questioned from theperspective of EU consumer law, given that the breach of the law was confirmed andin such cases the EU standard for breach of consumer law ordinarily envisagesapplicable sanctions that are dissuasive, efficient and proportionate. 68

        Guide through the Albanian consumer lawThe rules of Directive 1993/13/EEC on unfair contract terms were also applied tocontracts between a student as consumer and the managers of universityaccommodation. Decision 23 (22 February 2012) of the CPCA dealt with a complaintby a consumer who was a student in Shkodra against the student residence in whichshe lived alleging that the lease agreement contained two terms which were unfairand contrary to the 2008 CPL.The first contract term allowed the university accommodation to keep the total sum ofthe paid rent in case when a student decides to rescind the contract on universityaccommodation. According to the second contract term, the registration fee ofboarding student was considered as non-refundable, so trades was entitled to keep itif student decides to rescind the contact.The CPCA concluded that these terms of the lease agreement were unfair andcontrary to law. In accordance with the 2008 CPL, the CPCA annulled the two unfairprovisions of the contract and ordered the trader not to use them in their standardforms of lease agreements anymore. Moreover, the CPCA required that thedefendant compensate the student for the damage she suffered because of theannulled unfair contract terms. This decision demonstrates that apart fromidentifying, removing and sanctioning the unfair behaviour of traders, the CPCA alsogrants compensation for damages to individual consumers, again quite an importantenforcement feature in a country in which access to ordinary civil courts may bedifficult.In Albania, thus, not only private entities, but also the economic activities of stateentities, such as the municipalities or cities, towards consumers are subjected to therules of consumer law. In the CPCA’s Decision 12 of 8 November 2010, thedefendant, in its capacity as trader, was also a state entity. Specifically, theMunicipality of Tirana was accused of breaching the rules on unfair commercialpractices and the information duties imposed on traders by the 2008 CPL. Theprecise facts of the case are unclear from the available information, but they relatedto the issuance of a monthly bus ticket for public transportation by the Municipality.Thus, the basis of the CPCA’s decision is difficult to discern, including itsmethodology for concluding that the conditions in the two limbs of the general clauseon unfair commercial practices (transposed article 5 of Directive 2005/29/EC) werefulfilled. In any event, the policy significance of the case it that the CPCA has soughtto enforce the consumer law even against public entities where they interact and sellproducts and services to consumers.Financial and credit institutionsIt would not be a surprise that Albanian consumers, as in the majority of the newMember States of the EU, have been subjected to unfair commercial practices andunfair contract terms by banks and other credit institutions. Such cases have beendealt with by the CPCA. In fact, consumer protection in the financial sector hasparticular salience in a country in which the collapse of informal lending and pyramiddeposit schemes led to a near collapse of both political and economic institutions inthe mid-1990s.Decision 15 of 4 February 2011 of the CPCA dealt with a dispute over a consumercredit contract that an Albanian consumer concluded with Alpha bank. According tothe stipulated consumer credit agreement, the bank had the right to change the 69

December 2017agreed interest rate without the approval of its customers, in an ambiguous and non-transparent manner, resulting in a material increase of the consumer’s debt. Basedon the available English version of the decision it cannot be deduced how the CPCAdealt with the mutual relationship between the rules on unfair contract terms and therules on unfair commercial practices and whether breach of one set rules ledautomatically to the breach of the other set of rules, or whether these two parts ofconsumer law were assessed separately.Nonetheless, the CPCA held that Alpha bank had breached both the provisions onunfair contract terms and unfair commercial practices of the 2008 CPL and annulledthe disputed contract term. In addition, a pecuniary fine was imposed on Alpha bankas well as an obligation not to incorporate in the future similar provision as theannulled one in consumer credit agreements. Importantly, the remedy not onlydisposed of the case at hand, but it had a prophylactic effect in future contracts bythe defendant bank, while also putting other market players on notice.ElectricityAs is commonly the case in the countries of the Western Balkans, and as can beseen from the cases discussed above, Albanian consumers are particularlyvulnerable in their contractual relationships with providers of services of generaleconomic interest. Apart from the telecoms cases already discussed, Decision 17 of7 November 2011 dealt with the CPCA investigation of an alleged breach of the 2008CPL by one of the most powerful Albanian companies, which oversees thedistribution of electrical energy. The proceedings were commenced because theCPCA had received numerous complaints by Albanian consumers against CEZDistribution for a severe breach of Albanian consumer law through failures to provideenergy supply to consumers for an extended period or failures to inform consumerson time about the transfer of wickets to another place.In an interim measure, the CPCA imposed a pecuniary fine on CEZ Distributionfinding that it had not provided the required information on its economic activity thatthe CPCA had previously requested. The CPCA found that this information from thedefendant was necessary to be able to duly assess whether the rules on services ofgeneral economic interest of the 2008 CPL were breached or not. Again, thisdecision is particularly notable given the complete absence of competitive pressureon the operator in electricity distribution and given the CPCA’s willingness to take onthe case as a form of discipline on the contracting behaviour with consumers. It isalso important as a demonstration that the CPCA expects and requires from alltraders to participate and cooperate in the investigations of the alleged breach ofconsumer law and that it will sanction traders, including powerful monopolies, incases where they refuse to do so. 70

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Harmonisation of Albanian economic and trade legislation with the EU acquis Rruga Ismail Qemali, No. 3, 3rd floor. Tirana - Albania T +355 (0) 42273424 / +355 (0) 42234365 E [email protected] I www.giz.de/albania