Brief regarding the consumer protection situation issues in Latvia

Since year 2004 when Latvia has joined EU, consumer rights protection and market surveillance implementation has developed significantly, but there are still lots of areas and issues to be improved and developed to reach highest standards of produced safety and consumer rights protection.

 • Due to the growth of the budget and human resources the capacity of the main consumer protection institution Consumer Rights Protection Centre (CRPC) has been increased during the recent few years allowing to carry out new approach in the market surveillance and protection of consumer economic interests. It should be admitted that due to the wide scope of the functions of the CRPC the present resources (budget and human) do not allow to ensure consumer protection in fully extent.

• Carrying out market surveillance the main focuses are drawn to the toy safety – around 70 samples have been tested within year 2006, for almost 70% incompliance of standards was found. The majority of them were made in China. The other priorities – children products, personal protection equipment, construction materials, electrical appliances. Many of those products have been tested and in many cases nonconformity of the safety requirements was found.

• One of the most actual areas regarding consumer rights protection is protection of the consumer’s economic interests. Considering the rapid growth of the economy of Latvia, the demand for the crediting and other financial services has increased significantly within latest years, therefore CRPC focused on examination of the contracts, to ensure that traders do not include unfair contract terms in the contracts with consumers. The results of consumer crediting contract surveillance showed that almost all the biggest consumer crediting and leasing companies include unfair contract terms or other unfair issues towards consumer. Very similar situation turned out analyzing consumer contracts for the real estate purchasing and package traveling. Surveillance of the market sectors mentioned above has the highest importance because having significant influence on the financial state of the consumers in long-term period.

• As a very important indicator of consumer activity seeking for their rights protection is remarkable growth of the number of complains in CRPC. Within eleven moth of 2007 CRPC received more then 1200 complains regarding the quality of goods and services, it is 20% more then previous year for the same period of the time. The most widespread issues mentioned in consumer complaints are: mobile phones, electrical appliances, construction services, traveling services and air services. Furthermore there is a tendency that complains become more complicated and sophisticated and it is also more difficult to seek for the positive solutions. CRPC received very few complains regarding product safety.

•  The growth of the number of complaints also indicates the increasing of consumer awareness level of their rights. During recent few years the intensity of CRPC publicity activities has increased attracting media attention and stressing different consumer protection issues, that increases consumer literacy level about their rights. Nevertheless, as data obtained within social researches carried out in 2006 – 2007, almost 60 % of respondents admitted that their knowledge level regarding their consumer rights is poor and insufficient to protect their consumer rights. Very concerning tendency - around 90% has very poor knowledge regarding unfair contracting terms and unfortunately very low financial literacy to understand contracts which they are entering into.

• As the research shows traders has a very awareness level of consumer rights, obligations and requirements those traders should fulfill – around 50% of business sector respondents admitted their poor knowledge about the consumer rights and obligation. Combination of those two factors: poorly informed consumer and trader that do not know consumer rights in many cases is a reason of lack of the dialog between consumer and trader.

In conclusion:

- As experience and practice of CRPC shows in many cases the reason of the consumer rights problems is lack of constructive dialog of consumer and trader that causes conflicts and slows down the solution of the problems.

- Traders are lacking of friendly attitude and openness towards consumer that should be a key factor for the sustainable and successful business.

- There is a lack of strong and capable consumer NGO’s in Latvia that would be a significant actor in consumer rights protection work.