President of Russia Dmitry Medvedev: Good afternoon, colleagues,
It is an important subject that we are examining in Saransk today, important for our country and for our ordinary individual citizens. I am referring to protection of consumer rights and the relevant legislation and state guarantees in this area.
It is my view that over the last twenty years we have created what is essentially a new field of law or at least a new legal institution regulating the various aspects of consumer relations. We have created a national consumer rights protection system that coordinates the relevant federal, regional and municipal executive bodies and the public organisations. The law governing relations in this area was drafted back in 1992 and at that time was seen as a big achievement in legal regulation. I can still remember the discussions that took place back then. Since then, along with the law itself we have also built up a large body of legal practice, varied in nature, some of it positive and some of it not entirely so. Most important of all, however, is that this practice continues to develop and permeates relations in which consumers and citizens take part. This body of practice is built up in the courts and other organisations involved in protecting consumer rights, including public organisations.
The legislation in this area applies now not just to everyday services and commerce, which was its purpose as understood back at the beginning, but covers many other areas too now, including the housing and utilities sector, construction, transport, tourism infrastructure, and financial services.
”We need to speed up the drafting of provisions on federal state supervision of consumer rights, annual reports on this area, and procedures for creating state resources in this area that are open and accessible to the general public.“
As I said, many provisions have proven their worth, but there are also complaints in this regard too. This is only natural in some cases because life continues to develop and laws do not always manage to keep up with the modern trends that should shape consumer protection in our country. I therefore propose today that we concentrate on these issues, though this is not a complete and exhaustive list. I will name a few issues that I think require priority attention.
First of all, there is a need for additional measures to protect the rights of consumers of financial services. This has always been a problematic area, including the consumer loans sector. This is because although individuals and banks or other financial organisations are formally equal parties in relations in this area, as in any other civil law relations, in reality it is clearly one side that dominates, while the other side often ends up either with no rights or concludes agreements in associative form. I gave instructions back in 2010 on this matter and would like to hear a report on what has been done in this area since then.
Aside from financial services, there is another issue that has become much more urgent of late, and that is postal services. Regulation of postal services requires our attention, as does the coordination of the relevant rules in this area with general provisions of consumer protection law.
A number of specialists think we need a special law on bankruptcy of individuals that would set limits on individual liability in cases of failure to meet obligations and set out other measures protecting individuals from applicable contractual penalties. I already spoke about this issue, spoke about the particularly harsh terms sometimes imposed on consumers by the contracts they conclude with banks or other financial organisations.
”We need to step up work on developing public supervision of consumer rights. Public consumer organisations have significant resources that they could put to use for helping to develop legal culture and improve people’s financial literacy through educational and information work.“
The second matter we need to focus on is consumer rights in the housing and utilities sector and also the problems encountered in cases where people have invested to become stakeholders in a building’s construction so as to receive a future apartment there. This perhaps does not entirely come under consumer protection-related issues, given that individuals in these cases are acting in two different capacities at once, but considering subsidiary application of laws and a number of other aspects, I think this is something we do need to look at, as a huge number of complaints come in about inadequate consumer rights protection in the housing and utilities sector. I am instructing the Government to draw up a report on the effectiveness of supervision in the housing sector and in shared construction of housing, and to draft proposals on improving the legislation in this area.
Among the issues most in the headlines of late, the third matter I think we need to focus on is protecting the rights of people who buy tourism services. We usually hear about problems in this area when something goes wrong, especially when it is abroad, but also here at home too. There is usually an outcry in such cases, but often there are either no real measures that can be applied to the organisations concerned or they are ineffective. We therefore need to define the limits of travel agents’ liability, set out the list of grounds for paying compensation and the procedures for payments related to provision of medical services for tourists in the country of their stay and also a number of other issues that come up in this sector of the consumer market.
Fourth, we need to speed up the drafting of provisions on federal state supervision of consumer rights, annual reports on this area, and procedures for creating state resources in this area that are open and accessible to the general public.
”Consumers must have full protection from dishonest manufacturers and sellers. These are the main issues as far as the current consumer rights protection system in our country is concerned. We now have the chance to modernise it further and make it more effective.“
Fifth, we need to step up work on developing public supervision of consumer rights. In general this has been a fairly active sector here, but the public consumer organisations have significant resources that they could put to use for helping to develop legal culture and improve people’s financial literacy through educational and information work. I just visited an auto service centre and this was one of the matters we discussed there. In general, the intensiveness and persistence with which public supervision in this area is carried out is decisive for consumer rights overall. A lot is in the hands of these public organisations that often do have the range of instruments they need to be able to not just help particular individuals but also develop court and other practice in consumer rights protection cases.
One other subject I wanted to mention is that consumer rights is not a war against companies or against businesspeople. Anyone who sees it this way is wrong. Relations involving consumers and citizens are based on a special law but are, as I said, civil law relations between equal parties. We must not oppose the interests of business and citizens, but as far as consumers go, we all know that throughout the world there are special regulations in this area because consumers are usually the weaker party even if the relations are formally equal. We therefore need to establish effective legal mechanisms, but this must not involve head-to-head confrontation between the employers, businesspeople and commercial companies on the one hand and citizens on the other. This must be accomplished by creating modern mechanisms for reacting to conflicts and modern means of resolving disputes in this area. I want to draw this to the attention of all of the supervision and control agencies.
Consumers must have full protection from dishonest manufacturers and sellers. These are the main issues as far as the current consumer rights protection system in our country is concerned. This system is still not perfect, but it has developed over these last twenty years and we now have the chance to modernise it further and make it more effective.
Let’s begin our work.