World Consumer Rights Day: the right of withdrawal

The evolution of consumer legislation has focused on designing a system of reinforced protection of consumer rights that is reflected in the European Union, both in the New Consumer Agenda, comprising the measures applicable between 2020 and 2025 to protect European consumers, and in the directives issued and which must be transposed by each of the member states into their own legal systems.

In Spain, for this purpose, Royal Decree-Law 7/2021, dated April 27, entered into force on January 1, 2022 and amends Royal Legislative Decree 1/2007, dated November 16, which approves the revised text of the General Law for the Defense of Consumers and Users.

The changes in consumer regulations will have a direct impact on the operations of product manufacturers and retail companies in their relationship with consumers and users, with a new definition of the scope of the legal guarantee being particularly significant. 

In this article we will focus on the right of withdrawal, what it is, what it consists of, how consumers should exercise it and the penalties applicable in the event of non-compliance with the obligations incumbent on producers and sellers to make this right effective.

-What is the right of withdrawal?

The right of withdrawal from a contract is the power of the consumer and user to cancel the contract concluded, notifying the other party within the period established for the exercise of this right, without having to justify their decision and without penalty of any kind. In any case it will be considered validly exercised by sending the withdrawal document or by returning the products received.

Any clauses that impose a penalty on the consumer and user for exercising his right of withdrawal shall be null and void; however, the consumer may have to bear the costs necessary to return the product to the seller, provided that the seller has previously informed him of this.

The consumer has the right to withdraw from the contract in the cases provided for by law or regulation and when so recognized in the offer, promotion, advertising or in the contract itself.
 

The right of withdrawal is closely linked to the right of information that corresponds to consumers. Thus it is foreseen that commercial practices that, in a manner appropriate to the means of communication used, include information on the characteristics of the good or service and its price, enabling the consumer to make a decision on the contract, and provided that it cannot be clearly deduced from the context, must contain certain information, including information on the existence of the right of withdrawal. 

How should the consumer be informed about the exercise of the right of withdrawal?

When the law attributes the right of withdrawal to the consumer and user, the contracting entrepreneur must inform him in writing in the contract document, in a clear, understandable and precise manner, of the right to withdraw from the contract and the requirements and consequences of its exercise, including the modalities of restitution of the good or service received. It must also deliver a document of withdrawal, clearly identified as such, expressing the name and address of the person to whom it should be sent and the identification data of the contract and the contracting parties to whom it refers.

It is up to the entrepreneur to prove compliance with the obligation to inform the consumer. 

Within what period of time can the right of withdrawal be exercised?

The consumer and user will have a minimum period of fourteen calendar days to exercise the right of withdrawal, although nothing prevents that, commercially, can be offered a longer period than provided in the applicable regulations. 

Provided that the entrepreneur has complied with the duty of information and documentation, the term will be computed from the receipt of the good that is the object of the contract or from the conclusion of the contract if the object of the contract is the provision of services.

If the entrepreneur has not complied with the duty of information and documentation on the right of withdrawal, the period for its exercise shall end twelve months after the date of expiry of the initial withdrawal period, counting from the date of delivery of the contracted good or the conclusion of the contract, if the object of the contract is the provision of services.

If the duty of information and documentation is fulfilled during the aforementioned period of twelve months, the period legally provided for the exercise of the right of withdrawal shall begin to run from that time.

Can the right of withdrawal be exercised in contracts concluded at a distance or away from business premises?

Yes, and, in fact, we must emphasize that the applicable regulations provide for specific regulation of these modalities. 

There are some exceptions to the right of withdrawal in distance purchasing and contracting which, among others, are the following:

• The provision of services, once the service has been fully executed, with prior express consent of the consumer and user.
• Goods or provision of services whose price depends on financial market fluctuations that the entrepreneur cannot control and that may occur during the withdrawal period.
• Goods made to the specifications of the consumer and user or clearly personalized (e.g. custom-made clothing).
• Goods that are likely to deteriorate or expire quickly.
• Sealed goods that are not suitable for return for reasons of health protection or hygiene and that have been unsealed after delivery.
• Sealed sound or video recordings or sealed computer programs that have been unsealed by the consumer and user after delivery.
• Daily newspapers, periodicals or magazines, with the exception of subscription contracts for the supply of these publications.
• Contracts concluded by means of public auctions.
• Accommodation services (for purposes other than housing), transportation of goods, car rental, food or services related to leisure activities, if the contracts provide for a specific date or period of performance.
• Digital content that is not provided on a tangible medium, where performance has begun with the prior express consent of the consumer and user.

-What are the penalties applicable in case of non-compliance?

The refusal or obstruction of the exercise of the right of withdrawal implies the commission of a consumer infringement, classified as serious, which entails the imposition of a penalty of between 10,001 and 100,000 euros and may exceed these amounts up to four to six times the illicit benefit obtained.

Likewise, as an accessory sanction, the publication of the resolutions issued that have become final in administrative proceedings may be applied, although, for this purpose, there must be a risk to the health or safety of consumers and users, recidivism in infringements of a similar nature or proven intentionality in the infringement.

Regardless of the applicable sanction, we must make special mention of the reputational damage that can be caused by a company policy that breaches the regulations and that is so detrimental to the interests of consumers.

Our team of expert lawyers in Consumer Law can help you with your doubts. Contact them here.

Mónica Muñoz

Manager expert in Consumer law