Best Wishes

The Council  of the Consumers’ Association – Malta wishes all consumers a Happy Christmas and a prosperous New Year.

Be Careful! Internet connected toys

Christmas is near and most have already started buying presents.  These when directed at children are usually toys and the latest most advanced are usually the most attractive and the first choice.

This year internet connected toys were introduced on the European Market and though locally, as far as we know, are not available they can be obtained online.   Recently, the Norwegian Consumer Council (NCC) examined three toys Hello Barbie, My Friend Cayla and i-Que.  The first two are dolls and are directed at girls while the third is a robot directed at boys.

In its analysis at the terms and the technical features NCC found that there is a serious lack of understanding of children’s rights to privacy and security.

The toys fail at several points

In their review of the toys, the Consumer Council has found several serious issues:

  1. Lack of safety
    With simple steps, anyone can take control of the toys through a mobile phone. This makes it possible to talk and listen through the toy without having physical access to the toy. This lack of safety could easily have been prevented, for example by making physical access to the toy required, or by requiring the user to press a button when pairing their phone with the toy.

 

  1. Illegal user terms
    Before using the toy, users must consent to the terms being changed without notice, that personal data can be used for targeted advertising, and that information may be shared with unnamed 3rd parties. This and other discoveries are, in the NCC’s opinion, in breach of the EU Unfair Contract Terms Directive, the EU Data Protection Directive and the Toy Safety Directive.
  1. Kids’ secrets are shared
    Anything the child tells the doll is transferred to the U.S.-based company Nuance Communications, who specialize in speech recognition technologies. The company reserves the right to share this information with other third parties, and to use speech data for a wide variety of purposes.
  2. Kids are subject to hidden marketing
    The toys are embedded with pre-programmed phrases, where they endorse different commercial products. For example, Cayla will happily talk about how much she loves different Disney movies. Meanwhile, the app-provider has a commercial relationship with Disney.

Consumer tips

  1. If you do not want the toy, check if the shop accepts returns. You can cancel the purchase within 14 days if you bought the toy online.
  1. Not happy with the toy? Let the shop and the producer know what you think. This might prevent toys with similar shortcomings from entering the market.
  1. Talk to your child about what the toy is and what it can do, and what it means that the toy is connected to the Internet.
  1. Check how the toy responds to questions. The toys come with many pre-programmed phrases, but can also get answers from Wikipedia.
  1. Remember to turn off the toy when not in use, so you have control over who connects to the toy.

You may view the video about the risks of internet connected toys HERE.

The following are the two reports published by the Norwegian Consumer Council.

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BEUC delegation meet Malta Presidency

On the 25th November, the European Consumer Organisation (BEUC) and its Maltese member Ghaqda tal-Konsumaturi met Dr Helena Dalli, Minister for Social Dialogue, Consumer Affairs and Civil Liberties to present their expectations for Malta’s EU Council Presidency. During the meeting, the consumer delegation asked Minister Dalli to advance consumer interests in the Digital Single Market and to make enforcement of consumer rights a top priority for the EU.

In light of the 25,000 deaths attributed each year to antimicrobial resistance, BEUC and its Maltese member organisation stressed that the two pending EU proposals on veterinary medicines and medicated feed should be adopted swiftly in order to tackle the misuse of antibiotics in livestock.

Örjan Brinkman, president of The European Consumer Organisation (BEUC), commented:

“The European Commission wants to make the EU fit for the digital age. This will however only happen if consumers trust the digital economy and can choose from the best offers online. Concretely, consumers should be able to access the online goods and services of any trader in the EU. It is hardly a Digital Single Market if traders can erect artificial barriers to the detriment of consumers.

“It is common knowledge – and not just since the VW scandal – that company misbehaviour usually does not stop at the border. To reign in rule-breaking companies and bring justice to consumers, it is crucial that enforcers work together. We want the Maltese government to help wrap up the pending EU proposal on the cross-border infringements of consumer rights.”

Benny Borg Bonello, president of the Consumers’ Association of Malta, said:

“The EU law that will make everyday consumer protects safer and strengthen market surveillance has been inexplicably stalled for the past three years. The risks of exploding tumble dryers and toxic toys are real. We are counting on the Maltese government to break the gridlock.”

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One can view the document prepared for the Malta Presidency here.

Competition Office lacks will to investigate

At the beginning of October, the Office of Competition of the MCCAA published its decision regarding an investigation on the distribution of diesel. The investigation started after a petrol station in Rabat reduced the price of diesel but had to revert back to the set price after being pressured to do so by the supplier.

The Association in its request to the Competition Office to investigate this incident also asked for an investigation on the distribution of both diesel and petrol since we believe that the incident reported is not an exceptional incident but the current situation. However, in spite of this request and the fact that the Office took more than one and a half year to investigate this incident, the Office did not pronounce itself on this issue.

In our press statement on the decision, we commented that we were disappointed that the Office did not investigate this market. In its comments on our press release to the Times of Malta, the Competition Office spokesman, however, said that “parallel behaviour alone between competitors is normally not sufficient to prove the existence of unlawful anti­competitive behaviour”.  Moreover, the spokesman quoted the legislation to try to justify their lack of action.

The Association believes that the law is there to give authorities direction and not to inhibit them from investigating. Unfortunately, many a time the law is used as an excuse to justify inaction. This is not the first time that Offices within the MCCAA used this tactic. One example was when the Consumers’ Appeal Tribunal decided in favour of the Association when it took action against the Consumers’ Affairs Office because it did not investigate the Association complaints against ARRIVA.   On that occasion, this MCCAA’s Office also used the legislation to justify their inaction.

It seems that the Office for Competition wanted to take us for a ride. Parallel behaviour does not prove the existence of unlawful anti-competitive behaviour. But it does give ground for an investigation. The investigation would not have taken many resources as all it needed to do was to inspect the contracts that the petrol stations have with their suppliers. All it takes is the will to ensure that competition is the order of the day and that its benefits are transferred to consumers – something that this Office does not have.

The seriousness of this decision of not taking any action is not a light one. It should be noted that diesel is the fuel most used by industry and businesses especially to transport goods.   Thus in order not to disturb a few operators and the organisation behind them, this Office is depriving the whole economy, including most businesses, of the benefits that could be reaped if this important market were truly competitive.

Fantasy Tours – From Dreams to Smoke to a Solution

From dreams of a fantasy tour some years ago consumers faced the stark reality that they lost both their dream and the money forked out to make a dream come true went up in smoke when Fantasy Tours closed shop.  This happened because for a period of more than 10 years, in spite that Parliament approved, Ministers responsible for Tourism in two other administrations did not implement a provision which would have set up an Insolvency Fund to protect consumers when a package tour operator goes bust.

Consumers were encouraged to register to the MCCAA as they would be covered by the provider’s insurance.  In spite of this for a long period of time nothing happened and consumers were left in the dark.  Out of the blues, they received a letter from the same MCCAA that there was nothing that the Authority could do and consumers were encouraged to file claims against the Directors.

This was the situation when the Consumers’ Association – Malta decided to help these consumers.  We realised that this was no solution as the chances for redress were not only expensive both in terms of money and time but minimal.  The Consumers’ Association – Malta argued that the situation in which these consumers found themselves in was due to the fact that the State of Malta through these administrations did not implement these regulations and thus was responsible for the damage they suffered.

We organised these consumers who cooperated by providing us with the data of their personal experience.  We contacted the government and also provided this data for the government to assess.  The discussions took months but finally the problem has been solved without any expense to these consumers.

In fact, Minister Dr Edward Zammit Lewis announced this earlier this week in Parliament.  The Association would like to thank the Government especially the Prime Minister, Minister Zammit Lewis and Minister Dalli for their support.

 

We take this opportunity to thank Dr Antoine Grima who was vital in this campaign.  We also thank all the others, particularly a number of University students studying Laws and other volunteers within the CA, who helped to organise this campaign.

 

30.10.16

 

Gas Cylinder Distribution in Malta

On the 4th October the Competition and Consumer Appeals Tribunal issued a decision on the distribution of gas cylinders in Malta which had been pending since January 2013. It should be noted that the Office for Competition within the MCCAA instead of issuing the decision sent it to the Tribunal to decide instead of deciding itself. Probably this was done so as the government would not be pressed to take action on the eve of a general election – an action which would have put it in confrontation with the GRTU.

The Tribunal in its decision agreed to the findings of the Office of Competition namely:

That the standard agreement made between the bulk provider and the distributors were ipso iure null and void as they go against Art 101(2) of Trattat dwar il-funzjonament tal-Unjoni Ewropea and Art 5(2) of the Competition Act as they included a clause which gives exclusive geographical distribution rights with the aim of preventing, restricting or distort the internal market;

During the period between 2004 and 2009 Enemalta was in breach of the above mentioned articles as it was party to these standard agreements; and

That between the period of 2010 and 2013 the GRTU acted in breach of the said articles through its actions which had the intention to prevent, restrict or distort the internal market particularly Malta.

 

This was a very important decision as it showed how the internal Maltese market was and is being manipulated to restrict and distort competition. In 2015, there was a decision taken by government to reward the 31 distributors who were in breach of the law by giving them a subsidy in order to start competing. The positive things that came out of the 2013 decision were that the market was opened to other competitors and that the service to consumers was supposed to drastically improve.

Yet, the Association noted that the service did not improve one iota and thus requested the new Energy and Water Authority to oblige these 31 distributors to improve the service according to the 2015 decision. The Association held a meeting with the Authority but noted the lack of willingness to have the decision implemented. As a result we wrote to the new Authority (vide). The chain of correspondence to date is being attached to this article.

14.10.16

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Bombarded Consumers – Youth

Bombarded Consumers:  Youth

Relentlessly pursued by advertisers, incessantly targeted by the media and at the forefront of every single major promotional campaign going, in a crowded marketplace attracting the attention of young people and compelling them to put their hand in their pocket and paying money for the latest must-have item is of paramount importance. However, consumer societies and associations the world over seem content to neglect and dismiss the thoughts and opinions of this highly-sought yet largely silent section of the purchasing population.

From a very young age, children are subjected to a barrage of adverts and promotional material that leads them to harassing their parents into buying the latest toy, gadget or must-have electronic device. Their parents, in order for their children not to feel left out, succumb to their offspring’s demands and, despite knowing that the product in question will probably end up gathering dust in their child’s bedroom within days, continue to indulge and give in to their son or daughter’s consumer needs. As children grow into young adults, this vicious cycle never breaks. If anything, with the advent of social media and their chronic addiction to sites such as Facebook and Twitter, youths today not only find themselves struggling to keep up with their peers, but with celebrities predilection for selfies and vine videos cluttering up their pages and timelines, young people these days have no qualms about spending all of their savings or a whole month’s wage packet on buying the latest product endorsed by reality TV starlets or hot shot footballers. From copying their clothes to their hairstyles and tattoos, it seems that young people today will stop at absolutely nothing to look like their favourite celebrity – even if it means crippling themselves financially. But who needs savings and pension plans in the age of David Beckham and the Kardashians?

Nights out on the town bring their own financial woes. With limited entertainment options available locally, young people today – already under pressure from their peers to appear cool and financially solvent – must pay exorbitant prices for drinks in bars, clubs and pubs when buying multiple rounds of drinks for their friends. As bringing your own bottle on a night out is strictly forbidden – not to mention illegal and seriously uncool – youths today must pay whatever price is decreed by bar owners for their alcoholic beverages.

Exploiting young people’s vulnerability, insouciance and lack of perception in an uber consumeristic society has now become common practice. Will society persist in taking advantage of them? Are they happy with the way the marketplace is treating them? Do they want a change? Or do they just care about blending in with their peers by buying the latest must-have gadget, copying their favourite celebrity’s hairstyle and not standing out from the crowd?

The customer is always right is an old adage that has been repeated ad nauseum, but does this hold true when the consumer cannot tell – or refuses to tell – right from wrong?

David Bonello

Volkswagen emission scandal

Volkswagen Emissions Scandal

Very few spoke or wrote about this scandal. The only reaction especially from official sources was that we’re monitoring the situation – and that seems also the reaction today. Monitoring and consideration but no action ! (see MCCAA’s reaction) Mind you, this is the reaction of the most of European authorities which have been criticised by the EU Commission for their lack of action about Volkswagen emission scandal.  This contrasts sharply with the action taken by the US, South Korean and Australian Consumer authorities which took legal action against Volkswagen to safeguard consumers’ interests. The EU Commission also ‘concluded that the German car maker Volkswagen broke EU law which cannot be left without consequences’.

What we did: The first step was we contacted the local Volkswagen agent who gave us the number of cars bought in Malta and informed us that the rectification of these cars to reach the specifications given to consumers at the time of selling was expected to be ready by mid-2017.

In the meantime, we were informed that Altroconsumo, the largest consumer organisation in Italy, did a test on an Audi Q5 2.0 TDI 110 KW, both before and after it had taken part in the recall in Italy. When tested using the official test protocol (the NEDC), the NOx emissions of the car were found to be 25% higher than what official Euro 5 limits allow. The results in fact indicated a 13% increase in NOx emissions after the recall had taken place.

Another development was that Volkswagen in the USA was ready to compensate financially those affected by emission scandal up to $10,000 whereas it was denying European consumers, including Maltese consumers, the same treatment.

We also wrote to the local authorities which were involved. In our letter we pointed out three issues:

  • the recall for the rectification of Volkswagen vehicles is expected to take up to mid-2017;
  • the rectification being done does not meet the standards. The test by the Italian consumer association clearly demonstrates that Volkswagen’s solution to deactivate the defeat device is not reliable. We believe that consumers need to be 100% certain that their car would be in conformity with emission thresholds after the recall. We also asked the local authorities to undertake independent testing of the rectification being done in the recall;
  • Maltese consumers cannot be treated as second class consumers and should be treated at par with US consumers and given compensation by Volkswagen.

The following should be noted:

  1. there is an effort to hide the fact that there are serious doubts about the effectiveness of the rectification being done in the recall. Why Maltese consumers are being denied this information is beyond us.
  2. The MCCAA informed us that they are monitoring the situation and are considering taking action.

 

We will continue to press that Maltese authorities change gear from monitoring and considering to ACTION.

Fuel Prices in Malta Investigation Report – Where is it?

Petrol Station

We had always suspected that, with regard to fuels, petrol stations in Malta run a cartel. One indication was that unlike other countries the price of fuel throughout Malta is the same in spite of the fact that petrol stations are privately owned.

However, January 2015 showed that our suspicions were correct. In January 2015 it was reported in the local newspaper that one petrol station owner reduced the price of diesel. It seems that in the days following this initiative, he was informed by the supplier that he would not be furnished with any more with diesel due to his decision.

The Association wrote to the Office of Competition within the Malta Competition and Consumer Affairs Authority to start an investigation. That was on 28 January 2015. To date, we are still waiting for the report. We have recently again contacted this Office to see whether the report would be published soon.

It should be noted that fuel prices have got both a direct and indirect impact on consumers, businesses and the economy in general.

Gas Cylinder Distribution

Gas Cylinder distriba

Previous to 2015, LPG gas cylinder distribution was totally monopolised through exclusive geographical territory agreements with 31 distributors in spite of the fact that this was not within local legal limits and against EU rules.

In 2015, after a public consultation, the government decided to declare this distribution service as a Service of General Economic Interest in order to ensure that this service covers the whole geographical territory of the Islands. It was also decided that these 31 distributors would be given compensation on condition that they improve the service to consumers.  The notice which was published by the Minister for Social Dialogue, Consumer Affairs and Civil Liberties on the 17 March 2015 gave a list of improvements which were supposed to be implemented by the Ministry responsible to Energy.

The Association noted that practically none of these improvements have been implemented in spite of the fact that more than a year elapsed since the publication of the notice and in spite of the fact that these 31 distributors amongst themselves received hundreds of thousands of Euros as ‘compensation’.

Recently, the Association held a meeting with the CEO, Regulator for Energy and Water Services.  However, we were disappointed that there was no plan these improvements.  Consequently, we wrote a letter to the CEO urging him to implement these changes.

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07/19/2016