EU to boost cross-border e-shopping for Europeans

[Maciamo]

Euractiv : Consumers turned off by e-shopping, EU report shows

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Originally Posted by Euractiv Online cross-border shopping is still too burdensome for both consumers and traders, an EU report found yesterday (22 October). The case for savings in cross-border shopping is an easy one to make: the wider the net, the more likely a consumer is to find a bargain. But current conditions for both the consumption and the sale of online goods across borders are turning Europeans off the idea, according to an EU report. 60% of online purchases failed in an EU-backed test of 11,000 separate orders on cameras, CDs, books and clothes. Shoppers participating in the EU survey found that transactions failed because traders refused to sell to the consumer's country, largely due to technical problems or because a particular payment option was not available. ...

Expatica : Europe vows to liberate online shopping

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Originally Posted by Expatica Belgium, Bulgaria, Latvia and Romania were the worst offenders in terms of denying access to cross-border online wares. Two thirds of all products sought -- everything from books to washing machines -- were not even available online from retailers in the Belgian home of the EU. Other online retail black spots were Cyprus, Estonia, Finland, Ireland, Latvia, Lithuania, Luxembourg, Malta and Portugal. Only Austria and Spain had success rates above 50 percent.

The main problems for cross-border shopping were payment and delivery.

It is hard to see why big e-commerce websites would not provide a solution for international payment. Most of the online shops use credit card payment, which is as international as it gets. Smaller sites that are not equipped for such transactions could still offer payments by international bank transfers. After all, the new Single Euro Payments Area (SEPA) regulations makes wire transfers within the EU as easy (and often faster) than domestic transfers.

Delivery is a bit trickier. National post offices are not always very reliable. But private delivery companies like DHL, UPS or Fedex are good alternatives when the postal system fails to satisfy.

Personally I have never encountered any problem to purchase products from other countries, except from small sellers from Amazon market place that often do not provide international shipping.

[jgombos]

The article you referenced that indicates a 60% failure rate on consumer tests actually puts a different spin on the story than the article I read. I think it was BBC that said the failures weren't technical, but rather failures in meeting European standards for consumer rights. That is, not offering warranties, exchanges on DoA items, and the like.

I'm not the least bit surprised. It's expected that the dodgier online vendors would target Europeans, because Europeans are so vulnerable. Specifically:

1. Belgian credit cards are not protective. Although disputes are possible, disputes are ignored for all but the most extreme cases of fraud.
2. Wire transfers are extremely insecure, and are bread and butter for scams. A wire is effectively an electronic cashiers check, with no means to recover. And the cost of simply getting a trace is hindering in itself.
3. Litigation is not practical in Europe. You must speak the official language of the court, court costs are high, court costs themselves are not generally awarded to the plaintiff (even when the plaintiff wins), and the amount you can sue for strictly limited to direct and provable damages, not incidental damages.
4. Class actions are virtually non-existent in Europe (for a number of reasons).
5. B&M return policies of local European merchants generally suck. You can rarely return things in Europe, and the few stores that accept returns will only issue store credit (minus their restocking charge). So online merchants don't have to work very hard to compete against local business.

If I were a dodgy fly-by-night online retailer, I would not want to deal with Americans, for example, because they would all use credit card, and simply get a chargeback. But I would quite gladly accept European wires, because I could always claim the wire got lost. The consumer would have pay 25€ just for the trace, on top of court costs. It would amount to a lot of risk and cost on the part of the consumer to recover a small loss in comparison, so Europeans would just have to take the loss. I would also welcome purchases from a European credit card if I were a dodgy merchant, knowing that chargebacks on European cards are rare.

Ironically, European consumers have better rights (in principle) than Americans (for example) considering laws that mandate 2 year warranties on all electronics, but the European laws have no teeth. Europeans have no means to enforce the high level policy that's intended to benefit consumers. Implied warranties in the US are as little as 90 days, but US consumers have several legal instruments by which they can protect themselves, along with payment options that favor the consumer.

The article comments on the proposed solution to the issue:

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Originally Posted by article Proposed changes include an updated consumer rights charter and more Internet sweeps, "to stamp out illegal practices and boost consumer confidence in cross-border shopping" amid fears over an explosion in counterfeit goods and concerns over the storage of personal data.

That sounds like more of the same high level policy that doesn't go far enough. Europe needs to empower their consumers to protect themselves - to be able to actually do something when they get burned.

[Maciamo]

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Originally Posted by jgombos The article you referenced that indicates a 60% failure rate on consumer tests actually puts a different spin on the story than the article I read. I think it was BBC that said the failures weren't technical, but rather failures in meeting European standards for consumer rights. That is, not offering warranties, exchanges on DoA items, and the like.

This is not just a cross-border problem. It can happen if you buy in your own country too.

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Belgian credit cards are not protective. Although disputes are possible, disputes are ignored for all but the most extreme cases of fraud.

I know people who did not receive what they had ordered, told the credit card company, who asked a proof to the vendor; as the vendor couldn't prove that the goods were sent, the customers got an immediate refund.

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Wire transfers are extremely insecure, and are bread and butter for scams. A wire is effectively an electronic cashiers check, with no means to recover. And the cost of simply getting a trace is hindering in itself.

It's more secure than cash. You can always prove that you made a payment with a bank statement. In Belgium, tracing a wire transfer is free of charge.

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Litigation is not practical in Europe. You must speak the official language of the court, court costs are high, court costs themselves are not generally awarded to the plaintiff (even when the plaintiff wins), and the amount you can sue for strictly limited to direct and provable damages, not incidental damages.

In Belgium, court costs have to be paid by the losing side. Most Europeans seem to agree that damages awarded by American courts are usually exorbitant and ridiculous.

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sClass actions are virtually non-existent in Europe (for a number of reasons).

It's not common, but it sometimes happen, even at the European level.

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B&M return policies of local European merchants generally suck. You can rarely return things in Europe, and the few stores that accept returns will only issue store credit (minus their restocking charge). So online merchants don't have to work very hard to compete against local business.

That's why it's important to choose wisely the seller. Big websites like Amazon have the same return policy in every country, as far as I know. So in the case of Amazon (still the number one online retailer), there should be no difference between the US and Europe.

If I ever have a problem with customer service somewhere, not only will I never purchase there again, but I will make sure that my family and friends be informed and also boycott the place. This is not just true for online shops, but brick-and-mortar retailers as well.

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If I were a dodgy fly-by-night online retailer, I would not want to deal with Americans, for example, because they would all use credit card, and simply get a chargeback. But I would quite gladly accept European wires, because I could always claim the wire got lost.

I don't trust online merchants that do not accept credit card, and I wouldn't pay by bank transfer unless I know the merchant can be trusted. Paying via Paypal is a safer alternative because they use American laws and will provide a refund in case of fraud.

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The consumer would have pay 25€ just for the trace, on top of court costs.

In which country ?

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That sounds like more of the same high level policy that doesn't go far enough. Europe needs to empower their consumers to protect themselves - to be able to actually do something when they get burned.

What do you suggest, concretely ?

[jgombos]

I responded to this, but was apparently logged out while I was writing, so my lengthy response was lost after the login screen interruption. I'm not sure I want to take the time to rewrite it. Is there any log of it?

[edit]
Nevermind. After the 2nd iteration of hitting 'back' several times, I was able to recover the post:

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Originally Posted by Maciamo This is not just a cross-border problem. It can happen if you buy in your own country too.

What can happen? Getting ripped off? It doesn't make sense to try to rip off an American, because of all the protections and recourse in place. Vendors may unwittingly net some Americans, but it's not an issue because American consumers are empowered with real options - options that puts the money back in their hands.

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Originally Posted by Maciamo I know people who did not receive what they had ordered, told the credit card company, who asked a proof to the vendor; as the vendor couldn't prove that the goods were sent, the customers got an immediate refund.

The refund came from the vendor or the card issuer? Belgian card issuers like Bank Card Company are notorious for ignoring attempts to dispute. My colleagues have been in Belgium for the past 10+ years, and the consensus is that credit cards do not protect. British cards are an exception though, because British banks follow in the footsteps of the US.

I bought Skyeurope airfare just before they announced bankruptcy. Indeed it was a very poor choice on my part to buy airfare with a Belgian card (my colleagues agreed). I immediately requested to dispute the charge. Skyeurope even went as far as making a public statement on their website advising consumers outright to dispute the charge with their credit card issuers. So it was quite clear that the vendor would accommodate that remedy. Even with the merchants cooperation, the Belgian card issuer still failed to reply to any of the six letters requesting the dispute.

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Originally Posted by Maciamo It's more secure than cash. You can always prove that you made a payment with a bank statement.

Being more secure than cash isn't good enough. And the proof isn't of much use without a mechanism to act on the proof.

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Originally Posted by Maciamo In Belgium, tracing a wire transfer is free of charge.

Which bank? Fortis charges €25, as well as other banks I've checked. I've never encountered a bank that has free wire investigations.

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Originally Posted by Maciamo In Belgium, court costs have to be paid by the losing side.

That's not the case with British courts. Do the Belgian courts award the process service fees to the winner too?

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Originally Posted by Maciamo Most Europeans seem to agree that damages awarded by American courts are usually exorbitant and ridiculous.

That's a shame, because this is why the Europeans are left with a system that doesn't fix problems for consumers. Do you think if McDonald's had to simply buy a new pair of pants for a customer scalded in hot coffee that they would be compelled to adjust their policy in thousands of branches? The policy change would cost more than a pair of pants. Not to mention the cost of bringing the action would far outweigh the cost of a pair of pants, so the consumer would never have gotten a remedy in europe, and someone else would have gotten burned.

If a telemarketer calls you illegally, how do you prove irrefutable damages in exact amounts? If a telemarketer calls you illegally in the US, tort law entitles you to sue for $500 without showing damages. And rightly so, because you couldn't possibly prove any damages if your phone is a flat rate plan. A European consumer is helpless against the intrusive telemarketer who seeks to deliver an on demand and immediate advertisement to the privacy of their home abusing the phone as a broadcast device, and without compensation.

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Originally Posted by Maciamo It's not common, but it sometimes happen, even at the European level.

That's a shame, because with no recourse on behalf of a group, there's little means to stop widespread scams that hit large numbers of victims. The absence of class actions enables reputable companies operating on the table and even within the border to scam consumers. Eg. a large bank like NatWest is able to implement a wire siphoning scam right in the UK.

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Originally Posted by Maciamo That's why it's important to choose wisely the seller.

I agree. The lack of protection in Europe forces consumers to be very careful who they buy from. In the US, I could jump on every good deal I encountered, knowing full well that I'm safe if it turns out to be too good to be true. In Europe, we're vulnerable, and I choose to walk away from any transaction that has any question not concretely answered.

And sometimes even that's not good enough. I was buying a router at Fnac, and a salesperson told me it came with a switching power supply. I asked another salesperson just to be sure (because they won't allow the package to be opened). I stressed that it's important that it have a switching psu. They were both wrong. I get home, and it had a big 220-only transformer brick - not returnable.

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Originally Posted by Maciamo Big websites like Amazon have the same return policy in every country, as far as I know. So in the case of Amazon (still the number one online retailer), there should be no difference between the US and Europe.

Indeed, that's what I do, because so many vendors are dodgy.

Ebay is even more trustworthy than local retailers, because the feedback reports keep merchants in line, and paypal offers some means for dispute resolution.

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Originally Posted by Maciamo If I ever have a problem with customer service somewhere, not only will I never purchase there again, but I will make sure that my family and friends be informed and also boycott the place. This is not just true for online shops, but brick-and-mortar retailers as well.

The tribal word of mouth approach has marginal impact. You can only influence so many people, and not everyone acts on the advice when there are only a couple games in town. If you have an issue with fnac or mediamarkt, there aren't any other worthy competitors.

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Originally Posted by Maciamo I don't trust online merchants that do not accept credit card, and I wouldn't pay by bank transfer unless I know the merchant can be trusted. Paying via Paypal is a safer alternative because they use American laws and will provide a refund in case of fraud.

It's a shame there is a strong dependence on consumers being cautious and street wise. Acquiring the street wisdom is in part a matter of getting burned a couple times first, or witnessing it happen to others.

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Originally Posted by Maciamo In which country ?

Belgium.

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Originally Posted by Maciamo What do you suggest, concretely ?

Normally credit card protections would become a standard offering given enough competition, but Belgians don't have the addiction to credit that would stimulate that market. So there are only a couple players (ICS and BCC), and no incentive to compete for quality service. Legislation would be needed to twist their arm. Something like the US Fair Credit Billing Act would be a good start. Billers who do not at least respond to written challenges within 30 days would automatically lose the right to collect on that charge.

A tort law would be useful. If a bank siphons money from wire sent by an account holder of a different bank that they don't have a direct contract with, the account holder has an automatic right to sue for triple the amount that was siphoned without disclosure.

A transparency law requiring banks to produce a receipt for every non-free wire transfer, itemizing their fee. And a tort law to go with it, awarding account holders 100€ if no good faith effort was made to send the receipt.

[Maciamo]

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Originally Posted by jgombos What can happen? Getting ripped off? It doesn't make sense to try to rip off an American, because of all the protections and recourse in place. Vendors may unwittingly net some Americans, but it's not an issue because American consumers are empowered with real options - options that puts the money back in their hands.

It's true that European consumers have to be almost as careful as if they were buying from a souk in Morocco. Well, maybe not, but somewhere half-way between that and the USA. Better consumer protection would be a good thing.

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The refund came from the vendor or the card issuer? Belgian card issuers like Bank Card Company are notorious for ignoring attempts to dispute.

From the card issuer, and it was BCC.

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That's a shame, because this is why the Europeans are left with a system that doesn't fix problems for consumers. Do you think if McDonald's had to simply buy a new pair of pants for a customer scalded in hot coffee that they would be compelled to adjust their policy in thousands of branches? The policy change would cost more than a pair of pants. Not to mention the cost of bringing the action would far outweigh the cost of a pair of pants, so the consumer would never have gotten a remedy in europe, and someone else would have gotten burned.

I think that most Europeans would agree that it is the customer's responsibility to handle their coffee cups carefully. Americans like to be supervised and that everything is done for them so that they don't have to think about it. Europeans like to do things themselves.

American tourists and business people coming to Europe are notorious for being "high-maintenance". There are special services just for American expats to take care of everything they could think of, from finding a restaurant to renting a car, and from finding an appartment exactly fitting their needs to buying concert tickets for them. I personally would be ashamed to ask someone to do this for me (it would implicitly mean that I am not up to the task) and disgusted to have to pay someone to do it for me.

Europe is not a service society like the US, and people usually prefer to take care of everything they can themselves. Indeed I know few Europeans who would disagree with the motto "one is never as well served as by oneself" (translated from the French "on n'est jamais aussi bien servi que par soi-même").
All this to say that Europeans are highly individualistic, which may explain why they do not often resort to class action.

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If a telemarketer calls you illegally, how do you prove irrefutable damages in exact amounts? If a telemarketer calls you illegally in the US, tort law entitles you to sue for $500 without showing damages. And rightly so, because you couldn't possibly prove any damages if your phone is a flat rate plan. A European consumer is helpless against the intrusive telemarketer who seeks to deliver an on demand and immediate advertisement to the privacy of their home abusing the phone as a broadcast device, and without compensation.

It would be nice to be able to fine telemarketers 500 euro when they call you at home. There are so blacklist service which will sue companies that call people who joined the service, but it only works when the phone call is made from your country of residence. That's why Belgian homes usually get telemarketing calls (+ scams) from France rather than Belgium. There is indeed a lot to be done to harmonise consumer protection EU-wide. Laws too often apply only to one member-state and do not make provision for cross-border scams. That's a very serious issue.

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That's a shame, because with no recourse on behalf of a group, there's little means to stop widespread scams that hit large numbers of victims. The absence of class actions enables reputable companies operating on the table and even within the border to scam consumers. Eg. a large bank like NatWest is able to implement a wire siphoning scam right in the UK.

I agree that class actions could be useful against big corporations, as long as they do not fall in the excess of granting millions in damages to a single individual for mishandling a cup of coffee. The EU is doing the job protecting the population against some of the most obvious abuses - from cutting roaming fees from mobile phone operators to fining companies who do not respect the EU's competition laws. But that's not enough.

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I agree. The lack of protection in Europe forces consumers to be very careful who they buy from. In the US, I could jump on every good deal I encountered, knowing full well that I'm safe if it turns out to be too good to be true. In Europe, we're vulnerable, and I choose to walk away from any transaction that has any question not concretely answered.

The question is, would you sue a seller for not sending you a $10 book in the US ? Suing is time-consuming, annoying and costly. Even if you win and get your money back, is it really worth all the trouble for small amounts of money ?

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And sometimes even that's not good enough. I was buying a router at Fnac, and a salesperson told me it came with a switching power supply. I asked another salesperson just to be sure (because they won't allow the package to be opened). I stressed that it's important that it have a switching psu. They were both wrong. I get home, and it had a big 220-only transformer brick - not returnable.

Lesson 1 : never trust a shop assistant working for a chain like Fnac or Mediamarkt. Based on my experience they know very little once you ask technical questions, and they will tell you anything to get rid of you. There is indeed nothing you can do if they misinformed you as there is no proof that they indeed told you so. Even if you recorded them, the shop would say that they are not responsible because the employees are not supposed to know everything.

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Ebay is even more trustworthy than local retailers, because the feedback reports keep merchants in line, and paypal offers some means for dispute resolution. The tribal word of mouth approach has marginal impact. You can only influence so many people, and not everyone acts on the advice when there are only a couple games in town. If you have an issue with fnac or mediamarkt, there aren't any other worthy competitors.

I wish there were websites like Yelp that allowed consumers to rate and review sellers, tradespeople and professionals in each European country. I especially wish that a rating system would exist for construction workers (like plumbers) or medical doctors in Belgium, two of the categories of people I have found to be the most unreliable and excessive in their tariffs compared to the service provided.

I have met doctors who were not ashamed to ask me 70 euro just to tell me that they didn't know what I had or couldn't do anything about it, after a 2-minute examination. I once had a hospital appointment cancelled by the doctor (for an emergency) after they made me wait for over an hour, and they sent me the bill anyway ! I refused to pay and they threatened to sue me if I didn't pay ! I threatened them back and they gave up. They wanted to make me pay for wasting my time, and didn't admit that they were wrong. That's Belgium for you.

Plumbers here will charge a fixed fee of 200 euro if you ask them to come for an emergency (like unclogging a toilet) in the evening or at the weekend. Most often they will refuse to provide an invoice as it is not a legal tariff. I have tried calling many companies but the price was identical everywhere, as if they had rigged it between themselves. But there is no recourse for this kind of scam. They will say that if you find it too expensive you can try to find someone else.

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It's a shame there is a strong dependence on consumers being cautious and street wise. Acquiring the street wisdom is in part a matter of getting burned a couple times first, or witnessing it happen to others. Belgium.

Unfortunatley it's the way it is here. It makes people mistrustful of others. Maybe that's why Europeans, unlike Americans, don't talk so easily to strangers .

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Normally credit card protections would become a standard offering given enough competition, but Belgians don't have the addiction to credit that would stimulate that market.

Debit cards are much more common in Belgium, because people never think (or even imagine) that they could ask for a refund from the card company if the vendor refuses. Transactions are between the seller and buyer. People here don't see the need for the bank (issuers of most debit and credit cards in Europe) or card company to play the sheriff.

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Legislation would be needed to twist their arm. Something like the US Fair Credit Billing Act would be a good start. Billers who do not at least respond to written challenges within 30 days would automatically lose the right to collect on that charge. A tort law would be useful. If a bank siphons money from wire sent by an account holder of a different bank that they don't have a direct contract with, the account holder has an automatic right to sue for triple the amount that was siphoned without disclosure. A transparency law requiring banks to produce a receipt for every non-free wire transfer, itemizing their fee. And a tort law to go with it, awarding account holders 100€ if no good faith effort was made to send the receipt.

These are all good ideas. We need to submit that to politicians for legislation.

[TheCaptain]

First of all, don't lump all European countries together! I can't speak on behalf of the entire continent, but I know for sure that the Scandinavian countries are by no means like a Moroccan street market, when it comes to consumer protection. On the contrary, Scandinavia is a pretty well-organized and well-regulated corner of the world, and consumer rights are no exception.

Let me explain why. I believe there is a fundemantal cultural difference between the United States and many European countries. While most Americans object to government intervention and regulation, Scandinavians (especially) tend to have a much more postive view on the government. For that reason we have many laws that protect consumers whenever we buy a product in a store or online. For example, if you buy electronics, furniture, major appliances etc and it breaks down or there is a manufacturing defect, you have the right (up to two years after you bought it!) to go to the store and change it for a new one. When you buy things online, you have the right to return it within 2 weeks and get it refunded, and the list could go on... We have "consumer protection agencies" and "consumer councils" to help us if we feel that we are treated unfairly. The purpose is to protect the "little" man against the big corporations, so it's pretty much in keeping with Scandinavian social democratic traditions.

By the way, The Guardian wrote an article about our system:
http://www.guardian.co.uk/money/2009...ffairs-denmark

On the other hand, as Americans don't want the government to interfere with the free market, the legal system is the only useful tool a consumer has in order to take action against dishonest and irresponsible companies. And as Maciamo points out, the damages awarded are exorbiant and ridiculous. The United States has developed into a country where you must sue your neighbour before he sues you! A reality that makes many lawyers very rich, at the expense of the rest of the society. Companies and individuals spend incredible amounts of money on lawyers, just in case they get sued by somebody. This leads me to another problem: Unlike many European countries, the losing side don't pay the costs of the lawsuit. It means that sueing somebody is free, so people don't waste any opportunity to take legal action against somebody else, because they might win a fortune. Whereas, when the losing side pays, people think twice before they take somebody to court.

Furthermore, I agree with Maciamo that Europeans, in general, are better at taking rensposibility for their own actions, which benefits society on the whole. The American mentality on this issue does more harm than good.

[Maciamo]

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Originally Posted by TheCaptain First of all, don't lump all European countries together! I can't speak on behalf of the entire continent, but I know for sure that the Scandinavian countries are by no means like a Moroccan street market, when it comes to consumer protection. On the contrary, Scandinavia is a pretty well-organized and well-regulated corner of the world, and consumer rights are no exception. Let me explain why. I believe there is a fundemantal cultural difference between the United States and many European countries. While most Americans object to government intervention and regulation, Scandinavians (especially) tend to have a much more postive view on the government. For that reason we have many laws that protect consumers whenever we buy a product in a store or online. For example, if you buy electronics, furniture, major appliances etc and it breaks down or there is a manufacturing defect, you have the right (up to two years after you bought it!) to go to the store and change it for a new one. When you buy things online, you have the right to return it within 2 weeks and get it refunded, and the list could go on...

These are not laws proper to Scandinavia, but EU laws applying everywhere. The issue raised by jgombos is different. Even when such laws exist, what can you do when you purchase a product from a small online seller, pay online (by credit card or bank transfer) and never get your order delivered ? If the company's name and address is fictitious, how do you get your money back ? Laws won't protect you against upright fraud. His argument is that American consumers are better protected because the bank or credit card company will immediately refund you in case of fraud, while he claims that it is rarely the case in Europe (although I have my doubts).

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We have "consumer protection agencies" and "consumer councils" to help us if we feel that we are treated unfairly. The purpose is to protect the "little" man against the big corporations, so it's pretty much in keeping with Scandinavian social democratic traditions.

Same everywhere in Western Europe, as far as I know. But that's beyond the point.

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The United States has developed into a country where you must sue your neighbour before he sues you! A reality that makes many lawyers very rich, at the expense of the rest of the society.

This is also how I feel, and I think most Europeans as well. Hollywood does not do anything to contradict this image either.

[jgombos]

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Originally Posted by Maciamo I think that most Europeans would agree that it is the customer's responsibility to handle their coffee cups carefully.

Americans would agree, although I'm not sure that any American would take it as far as to conclude that careful handling guarantees no spills. The real difference here is that Americans believe suppliers have responsibilities too. It's careless to serve liquids meant for drinking at higher than drinkable temperature - and reckless regard for public safety on the part of those positioned to affect safety is quite rightly a liability. It's a foolish risk to escalate the danger of a product when there's no benefit.

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Originally Posted by Maciamo Americans like to be supervised and that everything is done for them so that they don't have to think about it.

The political stunt of printing "this cup is hot" has worked wonders. It doesn't matter in the slightest if there's a disclaimer, because their failure was not in failing to inform, but rather failing to serve a drink in a drinkable range. You can write disclaimers all you want, but it won't excuse the recklessness of creating an unnecessary health and safety risk. Serving the coffee at a drinkable temperature is indeed the significant change that came out of the court case. The effect of the disclaimers merely deceives consumers from understanding the real issue. Coffee served in the drinking range doesn't need a disclaimer, because it's at the expected temperature, and doesn't create a needless safety risk.

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Originally Posted by Maciamo Europeans like to do things themselves.

On the contrary, the European way is to let the government take actions for the people. The EU legislates, and the states mirror the legislation, and prosecute and fine violators. European consumers are dependent on their governments for protection. Americans are equipped with tools to handle problems on their own. In the US, it's up to the individual to take actions, and they have a number of options: lodging a dispute report with the card issuer, making a fair credit billing act inquiry, writing a dispute report to the better business bureau, suing directly as an individual, participating in a class action, all of which actually result in a solution that puts the losses put back in their pocket.

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Originally Posted by Maciamo All this to say that Europeans are highly individualistic, which may explain why they do not often resort to class action.

A class action is so much more individualistic than simply hoping the government will do something. Court cases of that magnitude require extensive commitment and preparation, and the representative class member commits a lot of their own time to case - and in the end is not awarded any more than others in the class, which is often a small fraction of the loss. A few people make a substantial effort to benefit others - which is driven more by anger than compensation. It requires considerable more motivation to participate in a class action than to do nothing. Class members not testifying often have to take some sort of action to declare their right to be a claimant. In the end, the participation of everyone involved is much higher than that of a community that hopes for government action.

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Originally Posted by Maciamo I agree that class actions could be useful against big corporations, as long as they do not fall in the excess of granting millions in damages to a single individual for mishandling a cup of coffee.

A class action that is not scalable to market share is completely useless. It would be pure waste. What you're advocating is a system that promotes what Ford did with an exploding Pinto issue:

http://www.engineering.com/Library/A...ord-Pinto.aspx

In short, the calculated cost of reimbursing the loss of human life was LESS than the cost of recalling the cars - so there was no recall.

Of course you sue for enough to more than offset the suppliers gain in connection with the reckless action.

If McDonald's only had to replace a stained pair of pants, they would still be serving drinks too hot to drink; hot enough to create substantially more risk.

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Originally Posted by Maciamo The question is, would you sue a seller for not sending you a $10 book in the US ? Suing is time-consuming, annoying and costly. Even if you win and get your money back, is it really worth all the trouble for small amounts of money ?

Generally, Americans have better options than suing. The difficulty with suing is court operating hours, and collecting on the judgment. It's still a last option when others fail - but it's a good last option.

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Originally Posted by Maciamo Lesson 1 : never trust a shop assistant working for a chain like Fnac or Mediamarkt. Based on my experience they know very little once you ask technical questions, and they will tell you anything to get rid of you. There is indeed nothing you can do if they misinformed you as there is no proof that they indeed told you so. Even if you recorded them, the shop would say that they are not responsible because the employees are not supposed to know everything.

In the US a verbal contract is as legally binding as a written one. There are also specific laws against fraud (including false advertising), and I believe there's also a general law that makes it illegal for corporations to lie. And that's just reinforcement if there's an issue. In most stores, there's a competitive return policy - usually accepting returns for any reason, and generally without a restocking fee.

[jgombos]

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Originally Posted by TheCaptain On the other hand, as Americans don't want the government to interfere with the free market, the legal system is the only useful tool a consumer has in order to take action against dishonest and irresponsible companies.

Americans have many tools to use against unscrupulous companies, including the government. The attorney general keeps tabs on trends of scams, and directly goes after offenses that affect many people. There are a number of other government agencies, each regulating different markets. That alone achieves the European standard of protection. There isn't an overextending implied 2 year warranty, but the more competitive markets more than bridge the difference, because sales tax is so much lower than VAT. Then there's all the tools available to american consumers who are motivated to act independently (only two of which involve the court).

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Originally Posted by TheCaptain A reality that makes many lawyers very rich, at the expense of the rest of the society.

That's Hollywood. Lawyers earn just 20k/yr more than programmers (and programmers only make 2x per capita). Some are even near poverty, and a few get rich. You see these sensational headlines of big figures, but you don't realize that's not just one lawyers pay, it must pay the whole staffed office, for the years spent on the case, and all the claimants.

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Originally Posted by TheCaptain Companies and individuals spend incredible amounts of money on lawyers, just in case they get sued by somebody.

Legal compliance in advance is money well spent. How can you consider it wasteful to ensure an organization isn't acting unlawfully, or putting someone at excessive risk in some way? I find it backwards indeed that someone would rather see damage done, and have regrets. Preventative law is about as forward thinking as preventative healthcare.

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Originally Posted by TheCaptain This leads me to another problem: Unlike many European countries, the losing side don't pay the costs of the lawsuit. It means that sueing somebody is free, so people don't waste any opportunity to take legal action against somebody else, because they might win a fortune. Whereas, when the losing side pays, people think twice before they take somebody to court.

Natwest bank stole 40€ from me. There is no governmental protection to prevent a british bank from stealing from a belgian resident. My only option is to sue. I can sue for 40€ if I'm willing to give up over a hundred pounds in fees. Your stance enables Natwest to continue ripping off consumers.

Even if I were to win the court fees, it still would not be enough of a win to compel Natwest to make their business model ethical. But at least I would be empowered to acquire a remedy for myself, as an individual.

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Originally Posted by TheCaptain Furthermore, I agree with Maciamo that Europeans, in general, are better at taking rensposibility for their own actions, which benefits society on the whole. The American mentality on this issue does more harm than good.

The European system stimulates irresponsibility. There is no incentive for Natwest act responsibly under your concept of an ideal system (where plaintiffs are always at a loss, and cannot recover damages on top of the cost of action). You're advocating a broken system that doesn't solve problems. There's inadequate incentive for suppliers to act ethically to begin with. Hence why European consumers are navigating a mine field when it comes to shopping.

[jgombos]

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Originally Posted by TheCaptain A reality that makes many lawyers very rich, at the expense of the rest of the society.

Americans have decided that having ethical trustworthy vendors is worth something. It's an expense that more than pays for itself. The beneficiaries includes everyone not trying to run a scam.

[Maciamo]

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Originally Posted by jgombos Americans would agree, although I'm not sure that any American would take it as far as to conclude that careful handling guarantees no spills. The real difference here is that Americans believe suppliers have responsibilities too. It's careless to serve liquids meant for drinking at higher than drinkable temperature - and reckless regard for public safety on the part of those positioned to affect safety is quite rightly a liability. It's a foolish risk to escalate the danger of a product when there's no benefit. The political stunt of printing "this cup is hot" has worked wonders. It doesn't matter in the slightest if there's a disclaimer, because their failure was not in failing to inform, but rather failing to serve a drink in a drinkable range. You can write disclaimers all you want, but it won't excuse the recklessness of creating an unnecessary health and safety risk. Serving the coffee at a drinkable temperature is indeed the significant change that came out of the court case. The effect of the disclaimers merely deceives consumers from understanding the real issue. Coffee served in the drinking range doesn't need a disclaimer, because it's at the expected temperature, and doesn't create a needless safety risk.

I have never been served a cup of tea or coffee that was at drinkable temperature, in any country, and I have travelled a lot. But I cannot drink anything above 50 degree Celsius (120 Fahrenheit) without burning my tongue. I know many people who will drink tea at 70 or 80°C, just after the boiling water has been poured into the cup. I have to wait between 5 and 10 minutes. You cannot make tea without boiling water, and in good tea houses and restaurants they will either pour the hot water at the table in front of you, or let you do it yourself. In any case it isn't and cannot be served at drinkable temperature, unless you add cold water afterwards.

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On the contrary, the European way is to let the government take actions for the people. The EU legislates, and the states mirror the legislation, and prosecute and fine violators. European consumers are dependent on their governments for protection. Americans are equipped with tools to handle problems on their own. In the US, it's up to the individual to take actions, and they have a number of options: lodging a dispute report with the card issuer, making a fair credit billing act inquiry, writing a dispute report to the better business bureau, suing directly as an individual, participating in a class action, all of which actually result in a solution that puts the losses put back in their pocket.

The difference between Europe and America is that Europeans adopt a preventive approach, with laws forbidding things to take place, while the US has generally few laws and courts have to rule case by case whenever damage has been done. That's why Americans sue so much.

In Europe, if a company does something that harms someone; it will usually already be illegal, and you can simply report them to the authorities (at no cost), who will punish the offenders. In the US, as few things are explicitly illegal and the rules are very broad and vague, and possibly contradictory in some cases (such as the famous Constitution amendments), courts have to rule whether the action was indeed illegal and estimate the extend of the damages.

Western Europe has 4 main legal models : English law (UK & Ireland), Roman and Napoleonic law (in Latin countries + Benelux), German law (Germany, Austria, Switzerland) and Scandinavian law. There is a major split between the British and American system, which fall under the Common law category, and all other systems in Europe, which are called Civil law.

The major difference is that Common law let the jury rule who wins the case, and often also what are the damages (hence the name "common" as ordinary people with no legal qualifications have the power normally attributed to career judges in continental Europe). The problem with the common law system is that ordinary people are generally not qualified to rule on technical cases and are almost always more influenceable than a judge. This is why lawyers are so important in America. A good lawyer can obtain almost anything from jurors.

In Belgium and France, judges tend to be very moderate and lenient in their rulings. This means that damages are usually low, especially if the convicted side is an individual or a small company (as opposed to a big corporation). Very often, people who break the law get a small sentence with heavier suspended sentence in case of recidivism. Once again, the accent is more on prevention and giving people a second chance in life.

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A class action is so much more individualistic than simply hoping the government will do something. Court cases of that magnitude require extensive commitment and preparation, and the representative class member commits a lot of their own time to case - and in the end is not awarded any more than others in the class, which is often a small fraction of the loss.

Exactly. It is very time-consuming and requires a "team spirit" mentality, which is why individualistic Europeans generally prefer not to bother.

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A class action that is not scalable to market share is completely useless. It would be pure waste. What you're advocating is a system that promotes what Ford did with an exploding Pinto issue:

Ok, I understand that. I suppose that Europeans see big American cases as often excessive because they are not used to dealing with huge corporations. Until the merger frenzy of the last decade there were relatively few European companies the size of big American companies.

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If McDonald's only had to replace a stained pair of pants, they would still be serving drinks too hot to drink; hot enough to create substantially more risk.

I think that another major divergence between Europeans and Americans is the source of responsibility. Americans only see McDonald's; the big corporation. Europeans will say that the people working in their restaurants do not associate much with the company. For them it's just a job and they don't care if their employer is McDonald's or a rival company. Because it is a low paid job with little qualification required, they often don't care about their job. It's just a means to an end (making some money). As people are just people, with their shortcomings, if one of the staff mistakenly serves a coffee over the allowed temperature, Europeans will say that it's just a human mistake (the human factor). It's not McDonald's or really anybody's fault. It just happens. With this kind of thinking you can't just sue the corporation for an individual's occasional and understandable mistake. We are not robots. Employees aren't the company. Again, the difference is Individualism. Persons are persons, not a cog in a company.

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In the US a verbal contract is as legally binding as a written one.

Here it is not, because there is no proof. Actually, even if there is a proof, like a recording, it is still not binding unless it was formalised as a verbal contract. A shop assistant's word isn't a contract. It's just information (correct or erroneous)

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There are also specific laws against fraud (including false advertising), and I believe there's also a general law that makes it illegal for corporations to lie.

If that is so, most companies could be sued for whatever they say in their ads. The line between opinion and fact is often thin in advertising. Claiming than a car offers "pure driving sensations" (whatever that means) would be a lie if it is presented as a fact, but not if it's just a person's opinion. Saying that a washing liquid will take away any stain is almost always a blatant lie. Yet most companies use that kind of advertising on TV and none are sued for it.

[Maciamo]

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Originally Posted by jgombos Natwest bank stole 40€ from me. There is no governmental protection to prevent a british bank from stealing from a belgian resident. My only option is to sue. I can sue for 40€ if I'm willing to give up over a hundred pounds in fees. Your stance enables Natwest to continue ripping off consumers. Even if I were to win the court fees, it still would not be enough of a win to compel Natwest to make their business model ethical. But at least I would be empowered to acquire a remedy for myself, as an individual.

I totally agree with you that a class action is necessary against the long series of small abuses committed by some banks. I have also been cheated by a French bank (no need to name it, they all do it) when I transferred money from France to Belgium. They charged me about 5€ for every single transfer, even though I used the IBAN and BIC in accordance with SEPIA regulations. European laws prohibit banks to charge more for SEPIA transfers to another EU country than they would for a domestic transfer. French banks always do, because they know that individuals aren't going to go through all the trouble of a costly lawsuit for just a few euro.

But if a class action did take place, I would want that the court order that the bank(s) pay back 3 times the cheated amount to all customers who ever had to pay these fees since EU regulations are in place. I would be unfair to grant millions to the few people who sue on behalf of everybody else.

[jgombos]

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Originally Posted by Maciamo I have never been served a cup of tea or coffee that was at drinkable temperature, in any country, and I have travelled a lot.

Perhaps, but conventional wisdom and appeal to common practice are not a valid arguments.

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Originally Posted by Maciamo I know many people who will drink tea at 70 or 80°C, just after the boiling water has been poured into the cup.

That's both an excessive safety risk (spilling) and a health risk. 80 degree tea is a carcinogen for cancer of the esophagus. Although I wouldn't go as far as to prevent people from drinking it, I do consider it foolish for a business serving tea to carelessly serve it that way systematically to unwitting consumers. It's something that should at least require the request of the client.

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Originally Posted by Maciamo You cannot make tea without boiling water,

You can, and in fact you should not use boiling water unless you're brewing rooibos tea. Some teas are cold brewed. Anyway, brewing temps are a red herring. The brewing temperature does not have to be the same as the serving temperature, unless you're brewing at the table, or serving it as it brews.

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Originally Posted by Maciamo and in good tea houses and restaurants they will either pour the hot water at the table in front of you, or let you do it yourself.

That's quite a bit different than handing a cup through a car window. The safety risk is considerably lower, and since customers are obviously aware that they're brewing the tea right there, the risk is reasonable and the customer accepts it.

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Originally Posted by Maciamo In any case it isn't and cannot be served at drinkable temperature, unless you add cold water afterwards.

How do you figure? The serving temperature doesn't have to match the brewing temperature, unless it's still brewing. Coffee is not still brewing as you hand it through a window, so there's no reason to serve it at the brewing temperature.

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Originally Posted by Maciamo The difference between Europe and America is that Europeans adopt a preventive approach, with laws forbidding things to take place, while the US has generally few laws and courts have to rule case by case whenever damage has been done. That's why Americans sue so much.

Lawsuits do not imply an absence of a crime. Both Europe and the states have preventive statutes in play, and it fails in both places. Like Europe, financial crimes in the US often go unenforced. Lawsuits are a means to get an immediate remedy to the victim, regardless of whether the state takes criminal action.

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Originally Posted by Maciamo In Europe, if a company does something that harms someone; it will usually already be illegal,

Is it legal to serve 88 degree coffee through a drive through window? I suspect it is. Perhaps rightly so - it would be unreasonably ambitious to try to create a law for every possible imaginable foolish safety risk merchants can create.

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Originally Posted by Maciamo and you can simply report them to the authorities (at no cost), who will punish the offenders.

That's hard to accept. I'm a bit skeptical of this claim. Every time I'm scammed the locals tell me nothing can be done. Why would the Brits be motivated to take actions against Natwest bank for a small 40€ theft?

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Originally Posted by Maciamo I think that another major divergence between Europeans and Americans is the source of responsibility. Americans only see McDonald's; the big corporation.

There is not a single source of responsibility in the US. Responsibility is distributed to everyone involved, including mcdonalds. I'm not sure why Europe would exclude companies from responsibility, and focus on what the victim did wrong.

It may have been a bad idea for the driver to hold coffee between her knees, but that doesn't exempt McDonalds from their role in increasing the damages needlessly. McDonalds serves their coffee 50-70 degrees higher than other establishments, and had 700 documented severe coffee spill incidents before Liebeck got burned.

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Originally Posted by Maciamo Europeans will say that the people working in their restaurants do not associate much with the company. For them it's just a job and they don't care if their employer is McDonald's or a rival company. Because it is a low paid job with little qualification required, they often don't care about their job. It's just a means to an end (making some money). As people are just people, with their shortcomings, if one of the staff mistakenly serves a coffee over the allowed temperature, Europeans will say that it's just a human mistake (the human factor). It's not McDonald's or really anybody's fault.

This is not a case of an employee making an error. If it were, McDonalds would have had a considerably stronger case in the US. McDonalds policy required employees to serve coffee at 82–88 °C. An employee would actually have to break the rules to have served it at a reasonable temperature. The employee complied with the policy, so the company is clearly at fault.

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Originally Posted by Maciamo It just happens. With this kind of thinking you can't just sue the corporation for an individual's occasional and understandable mistake. We are not robots. Employees aren't the company. Again, the difference is Individualism. Persons are persons, not a cog in a company.

A US company is responsible for what its policy is, and how its policy is enforced. Of course employees acting outside the policy would weaken a case against a company.

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Originally Posted by Maciamo Here it is not, because there is no proof.

Proof is completely separate. The difficulty in showing proof of a verbal contract is a matter of enforcement; but it does not reduce the affect of the contract terms. At least, as I understand it.

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Originally Posted by Maciamo If that is so, most companies could be sued for whatever they say in their ads. The line between opinion and fact is often thin in advertising. Claiming than a car offers "pure driving sensations" (whatever that means) would be a lie if it is presented as a fact, but not if it's just a person's opinion. Saying that a washing liquid will take away any stain is almost always a blatant lie. Yet most companies use that kind of advertising on TV and none are sued for it.

Ads use weasel wording to steer clear of measurable and provable fact. They will claim to be "better" than brand X. A statement of fact is enforceable. If a liquid claims to take away any stain from any surface, and it doesn't, it would be easy to establish a false advertising claim.

[Maciamo]

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Originally Posted by jgombos You can, and in fact you should not use boiling water unless you're brewing rooibos tea. Some teas are cold brewed. Anyway, brewing temps are a red herring. The brewing temperature does not have to be the same as the serving temperature, unless you're brewing at the table, or serving it as it brews.

Let's not argue over details. Most teas have to be made with water too hot to be drunk safely immediately (over 80°C).

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That's quite a bit different than handing a cup through a car window. The safety risk is considerably lower, and since customers are obviously aware that they're brewing the tea right there, the risk is reasonable and the customer accepts it. ... Is it legal to serve 88 degree coffee through a drive through window? I suspect it is. Perhaps rightly so - it would be unreasonably ambitious to try to create a law for every possible imaginable foolish safety risk merchants can create. ... This is not a case of an employee making an error. If it were, McDonalds would have had a considerably stronger case in the US. McDonalds policy required employees to serve coffee at 82–88 °C. An employee would actually have to break the rules to have served it at a reasonable temperature. The employee complied with the policy, so the company is clearly at fault.

I wasn't even aware that the customer who sued McDonald's got her coffee through a drive through window. I didn't even think of it as a possibility as this system is extremely rare in Europe, even at McDonald's (I only know one McDonald's that has a drive through window in Belgium or no other company that have one). I also didn't know that McDonald's required employees to serve coffee at 82–88 °C. This makes a big difference. But unless it was an employee who spilt the coffee while giving it through the window, I still don't see why it was McDonald's fault. Coffee is supposed to be hot. It's common sense. If she drove with the coffee between her legs, as a judge I would have fined her for irresponsible driving (same fine as driving while talking on a mobile phone).

McDonald's might be a major coffee seller in the US due to its ubiquitousness, but in countries such as Belgium, France or Italy, where 99% of the people would buy coffee from a café rather than a fastfood chain, it would have been nonsensical to force only McDonald's to serve coffee at moderate temperature. If hot coffee prevents a safety hazard there should be a law for all establishments, not just forcing one company to change its policy because of a lawsuit.

If a Belgian court had forced McDonald's to do this and not local cafés, I am pretty sure it would have been seen as an anti-American measure (after all there are only 3 McDonald's in Brussels for a day-time population of about 3 million people - and thousands of cafés).

[jgombos]

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Originally Posted by Maciamo Let's not argue over details. Most teas have to be made with water too hot to be drunk safely immediately (over 80°C).

The fact that brewing temperature need not be the same as the serving temperature is not a detail in the slightest. That single fact makes the whole difference in the case - the difference between winning and losing. If coffee had to be served at the same temperature it brews at for some strange reason, McDonalds could not have been deemed to be careless. It would not have been a reckless policy if someone could somehow prove that serving temp necessarily matches the brewing temp.

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Originally Posted by Maciamo I wasn't even aware that the customer who sued McDonald's got her coffee through a drive through window. I didn't even think of it as a possibility as this system is extremely rare in Europe, even at McDonald's (I only know one McDonald's that has a drive through window in Belgium or no other company that have one). I also didn't know that McDonald's required employees to serve coffee at 82-88 °C. This makes a big difference.

Indeed the media loved distorting this case, because the headlines were so sensational. Revealing all of McDonalds screw ups makes the result less spectacular.

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Originally Posted by Maciamo But unless it was an employee who spilt the coffee while giving it through the window, I still don't see why it was McDonald's fault.

Actually an employee accidentally spilling coffee on a customer would have yielded a much lower figure, because in that case it would not be a premeditated reckless corporate policy, but rather simply an understandable accident that we expect humans to have. We're talking about a case here where McDonalds had 700 earlier severe burn reports. They knew their coffee was too hot, they knew their coffee was 30-50 degrees higher than what's typical, and proactively chose not to correct it - like Ford knowing about the Pinto flaw, and choosing not to do the recall.

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Originally Posted by Maciamo Coffee is supposed to be hot. It's common sense.

This is a false dichotomy. Coffee is not simply hot, or not hot. How hot, at what point in time, is the question. It's supposed to be boiling *in the kettle as it brews*. When it's served, there's no reason it has to be hot enough to cause burns to the third degree. Third degree burns is the most severe burn classifaction there is. The victim in this particular case needed a skin graft, and medical oversight for two years following the incident. (her medical bill was $11k, and mcdonalds offered to pay $800 of it)

"Common sense" is what the average joe believes. The knowledgebase of the McDonald's corporate machine is considerably better than common sense - it's scientific and statistical knowledge, coupled with a full-time legal department with a good understanding of law, risk, and liability. And quite rightly, McDonalds is expected to act responsibly to the extent of their knowledge.

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Originally Posted by Maciamo If she drove with the coffee between her legs, as a judge I would have fined her for irresponsible driving (same fine as driving while talking on a mobile phone).

She did not spill the coffee while driving. She actually went straight to a parking spot. It was after she was parked that she tried to remove the lid, and add sugar. It works against McDonalds that she was driving, because they know the risk, and chose to systematically deliver 82+ degree liquids to people that are driving - enforced by corporate policy.

Perhaps a traffic citation would be reasonable, even though she didn't spill while driving. But so what? That's separate. McDonalds role was to add to the damage; to escellate what would normally just be stained pants and a bad day, to third degree burns requiring surgery.

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Originally Posted by Maciamo McDonald's might be a major coffee seller in the US due to its ubiquitousness, but in countries such as Belgium, France or Italy, where 99% of the people would buy coffee from a café rather than a fastfood chain, it would have been nonsensical to force only McDonald's to serve coffee at moderate temperature.

No one forced McDonald's not to serve liquids at an insane temperature. It's a poor business choice to do so, because the liability of taking such a stupid risk is too costly, and rightly so.

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Originally Posted by Maciamo If hot coffee prevents a safety hazard there should be a law for all establishments, not just forcing one company to change its policy because of a lawsuit.

We can invent safety hazards all day - more than all legislative bodies in the world could possibly keep up with. It's simply not practical to generate mass legislation on a micro surgical detailed scale. It would be a task that would never approach completion, and the legislative process itself cannot be meticulous enough to avoid over-imposing prohibitions where in some scenarios there's no risk. Eg. if you're not careful, you would outlaw the sale of 88 degree coffee in a well sealed thermos designed for consumption at some later destination.

It's much more effective to empower both the consumers and suppliers with some responsibility, and put in place a means for remedy when someone does something stupid. Dictating policy to everyone through legislation has it's own inherent flaws, part of which is loss of freedom to think for yourself.