Consumer protection

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(Redirected from Consumer protection laws)

Consumer protection can be defined as a set of measures implemented by governments and companies in order to protect the fundamental rights and welfare of consumers, namely in terms of health, safety, education, as well as in financial and legal terms. In this way, the set of laws implemented aims to provide tools that allow consumers to make better and more informed decisions during their purchasing process, taking into account the volatility and uncertainty of present age.

For consumers to have their rights protected, it is essential that the parties involved cooperate with each other. Thus, governments should implement a set of laws that defend, on the one hand, consumers from unethical behaviour and, on the other hand, encourage companies not to perform fraudulent actions that are harmful to consumers' wellbeing, promoting the highest quality of their products/services.

Benefits for consumers and businesses

Through this protection system, consumers obtain several advantages, as they have access to clear and reliable information, avoiding the possibility of being betrayed by companies. In addition, consumers also gain the ability to claim their rights in a more efficient and effective way. From the organisations' perspective, they will obtain greater profit and notoriety in the market if they opt for strategies that favour consumer welfare. Consequently, their market share increases, making them more competitive in the market where they operate, driving the development of new innovations in order to differentiate themselves from competitors, providing long-term economic growth.

European Union legislation

With the globalisation, trade between different countries has become increasingly frequent. Therefore, in order to protect European consumers fairly, regardless of where the product/service is sold, the European Union (EU) has implemented certain laws in specific areas for all member countries (Valant 2015):

  • Firstly, product safety concerns all the procedures that companies must follow during their production in order to guarantee that the marketed goods do not harm people's well-being. Thus, the EU has defined in its legislation some mandatory measures to be checked in the production and marketing of products. For example, with regard to food products, Loon and Wernaart (2022) mentioned that the EU has defined that companies must inform accurately all the components of the food through the label on the packaging. This enables consumers to take informed decisions about the products they wish to consume, taking into account their characteristics.
  • Another factor that is quite important for consumer welfare is security in the digital marketplace. If before people preferred to go to the shops to analyse, try and buy the products in person, nowadays consumption through digital platforms has increased exponentially. On the one hand, the digital market is advantageous both for consumers, as they can make their purchases more conveniently, and for companies, because they can reach a greater number of potential consumers from different parts of the world, without the cost of intermediation. However, this sector also entails some problems for consumers as, with the development of the counterfeit market, the probability of being swindled is much higher, since consumers do not have the necessary tools to check the authenticity of products. Thus, it is essential to ensure that all consumers of these platforms are protected, creating a more reliable market. With this, the EU has established that all consumers have the right to exchange their products or cancel their purchases within a period of 14 days.
  • This type of occurrence also happens recurrently in financial services, a sector often misunderstood by consumers, leading them to believe whatever the 'professionals' say. The EU has therefore adopted tougher measures so that consumers are protected from unfair activities, such as a lack of information or fraudulent information about financial services.

Conclusion of Consumer Protection

Finally, it is possible to conclude that consumer protection is a very relevant topic and that it should always be one of the main focuses of analysis of the European Union, in order to preserve consumer rights, at the level of health, safety, education, economic interests and information provided.

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Author: Ana Inês Jorge Gonçalves, Inês Espregueira Guerra Teixeira de Morais, Marta Gomes Ribeiro