ZAGREB, 5 May 2022 - Delivering a ruling on the right to compensation for overpaid interest for loans pegged to a foreign currency after conversion, the EU Court of Justice has found that these loans fall outside the scope of the consumer protection directive.

The court published a decision on Thursday saying that the directive of 5 April 1993 on unfair terms in consumer contracts should be interpreted in such a way that contractual provisions that reflect national law under which the seller or service provider was obliged to propose to the consumer an amendment to their original contract by means of an agreement the content of which was determined by those provisions and which the consumer was able to accept, fall outside the material scope of the directive.

This refers to the case of A.H. vs Zagrebačka Banka regarding the reimbursement of the amount the bank allegedly unduly gained pursuant to the unfair provisions that were initially contained in the loan contract that the parties concluded and were subsequently amended via an annex that contained the amendments foreseen in Croatian law.

Franak: Decision to be made by Supreme Court

The ruling, in this case, has been pending since October 2020 when the Municipal Civil Court in Zagreb applied to the EU Court and independent attorney Juliane Kokott said that the matter did not fall within the jurisdiction of the EU Court.

The Franak association of debtors with loans pegged to foreign currencies said on Thursday that the court did not rule that it was not competent for this case, yet it did not answer the questions asked. That means the decision on the right to compensation of all consumers with converted loans will now be passed on to the Supreme Court, the NGO said.

"We have not been compensated for and the Supreme Court has to adopt the only just decision and that is to determine our rights based on expert evaluation," because without a proper calculation it is not possible to determine whether the balance between the rights and obligations of consumers and banks was achieved by the loan conversion, the NGO concluded.

HUB: EU Court confirms Croatian case is specific

The Croatian Banking Association (HUB) said that the ruling of the Court of Justice of the European Union confirmed HUB's position that the Croatian case of CHF-indexed loans was specific compared to other EU countries because the conversion was carried out in accordance with a law that was binding on banks but voluntary for consumers.

HUB cited the court's finding that Directive 94/13 on unfair terms in consumer contracts is not applicable to contractual provisions that reflect the mandatory provisions of national law or, in the Croatian case, the provisions of conversion agreements concluded in accordance with the provisions of the Act amending the 2015 Consumer Credit Act.

It is assumed that the national legislature has, through its intervention, established a balance between the rights and obligations of the contracting parties and such a decision is in conformity with the case law, HUB said, recalling that 94 per cent of CHF loan holders voluntarily converted their obligations.

HUB noted that under the amended law the banks bore the full cost of the conversion, which totalled HRK 7.5 billion (€1bn), and that the conversion ensured that CHF loan holders had equal status to that of euro loan holders.

"Bearing this in mind, any further compensation of one category of debtors would be discriminatory and would distort the balance established by the law," HUB said..

It also noted that the Croatian Supreme Court has found that conversion agreements concluded pursuant to the amended Consumer Credit Act are valid and have legal effect where the provisions of the basic loan contract concerning the floating interest rate and foreign-currency clause have been found null and void, and that CHF loan holders have the same status as euro loan holders.

HUB said that this position was now additionally confirmed by the EU Court and that the validity of the conversion and its effect on the reimbursement of consumers should no longer be a matter for the courts.

For more, check out our business section.

ZAGREB, 31 January 2022 - The majority of citizens are compelled to buy a new electric appliance because the cost of the repair is not worth it, according to the latest results of a survey commissioned by MEP Biljana Borzan's (S&D/SDP) office, which she presented in Europe House in Zagreb on Monday.

The majority of citizens, or 81%, bought new appliances because repairs were not worth it, 72.9% opted to buy a new appliance because it was not possible to repair the old one and 43.4% did so because repairs were not available, according to the survey conducted in November 2021 by the Hendal agency on a sample of 800 respondents.

"I consider this to be truly sad because, on the one hand, we want to protect consumers so they do not have to spend money on new appliances, and naturally considering the fact that the European Union is exceptionally green orientated, which is an absolute priority in all our laws," said Borzan, who is a member of the European Parliament's  Committee on Internal Market and Consumer Protection.

When buying new appliances, consumers look at the price first (90.6%), then at the expected lifespan (89.6%), guarantee duration (82.8%), availability of servicing and spare parts (80.3%), and lastly care for the environment (56%).

Citizens trust institutions the least

"When adopting laws we endeavour to build in this green, ecological part and take the environmental impact and future of the planet into consideration," she added.

"As many as 94% of citizens think that appliances should last longer, and the life span and the availability of repairs are the most important aspects to them when they are buying a new product," she said and explained that a new resolution calls for the introduction of a new feature, repairability. She said that each appliance should bear an indication of the life span of the appliance and the availability of spare parts and servicing, adding that 78% of citizens expect this, said Borzan.

When it comes to complaints, citizens have the most faith in consumer protection associations, followed by traders and manufacturers, while they have the least faith in state institutions, which only 18.4% of citizens trust.

Resolution on the right to repairs in March

Borzan believes that the resolution will be put to the vote in March, after which she expects a prompt response from the European Commission so that work on preparing the law can begin in the spring.

Borzan added that Croatia was near the bottom of the EU ranking as far as consumer protection is concerned.

For more, check out our lifestyle section.

ZAGREB, 2 Sept 2021 - The Croatian government on Thursday agreed on amendments to the Consumer Protection Act and sent them to parliament for consideration.

Under the proposal, consumers will be able to address their comments and objections to retailers via chat, and retailers will be required to display both reduced prices during discount sales and the lowest price of the same product that applied 30 days before the discount sale.

The proposal also extended the list of circumstances constituting unfair commercial practices, including dual quality of products.

Bill ratifying guarantee agreement with IBRD

Also sent to parliament was the bill ratifying a guarantee agreement with the International Bank for Reconstruction and Development to provide Croatian companies with liquidity. The agreement was signed on 7 June this year, along with a loan agreement between the International Bank for Reconstruction and Development and the Croatian Bank for Reconstruction and Development for this project.

The purpose of the €200 million loans is to provide funding for private companies, for permanent working capital and financial restructuring of exporters, for companies with limited access to financial services, and for underdeveloped regions. The repayment period is 15 years, including a 4.5-year grace period, and the interest rate is the 6-month Euribor plus a variable interest margin.

Amendments to Micro and Small Loans for Rural Development scheme

The government also adopted amendments to the Micro and Small Loans for Rural Development scheme, increasing the amount available for financing small loans from the present €50,000 to 100,000. The aim of the amendments is to alleviate the difficulties faced by final recipients in the agriculture, processing, and forestry sectors in accessing capital.

Small Loan for Rural Development is the most sought-after financial instrument under the Rural Development Programme, Economy Minister Tomislav Ćorić said.

From its launch in September 2018 to the end of June 2021, a total of 1,137 applications for financing had been received, of which 721 applications, worth HRK 240.6 million, had been granted, he said, adding that new applications were being received and processed on an ongoing basis.

(€1 = HRK 7.5)

For more on politics, follow TCN's dedicated page.

US fashion brand Guess is the first "victim" of the new EU geographic blocking regulation, which came into force at the beginning of the month. The European Commission has fined Guess with almost 40 million euros for discriminating consumers in Croatia and a number of new EU member states in its online store, reports Jutarnji List on December 19, 2018.

The Brussels investigation has shown that Guess had fragmented the EU single market by setting 5 to 10 percent higher prices for buyers from Bulgaria, the Czech Republic, Estonia, Croatia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. Simply put, if someone from the aforementioned new members of the European Union bought a Guess product over the internet, they automatically paid for it more than buyers from old EU members, according to the EU findings. The European Commission has assessed that this is improper business practice, which is the result of consumer discrimination on the basis of the geographical location. It is also considered to be an obstacle in the development of internet commerce and the single EU digital market. Therefore, Brussels has fined Guess with 39,821,000 euro. The penalty which was initially supposed to be issued has been cut in half because Guess was "cooperating," explained the European Commission.

"There are many illogicalities in online trading, and consumers are suffering. After Guess has been punished, we hope that it will be a warning to others,” said Biljana Borzan (SDP), a Croatian Member of the European Parliament. Similar examples abound in the package delivery business, which is closely related to online retail.

The EU now intends to prevent such practices because the Union wants to encourage the development of online retail trading, which grows at an annual rate of 22 percent. However, according to EC data, only 15 percent of Europeans buy online products from other EU member states, and one of the main reasons is geoblocking.

Ilija Rkman, the former president of the Croatian Consumer Protection Society, agrees with Borzan. “Our statistics show that our consumers mostly complain about material failures of products they have bought, as well as about their warranties. It is hard to believe that a new smartphone or a home appliance can break down so very soon after the purchase. This is an indicator of double standards for consumers in the old and new EU member states,” warned Rkman.

Because of all this, Rkman says that the consumer protection situation in Croatia is not as good as it should be. It has improved somewhat, but Croatia is still at the bottom of the EU. “Consumer protection should be a priority for the government. Today, it is considered a part of the protection of human rights,” Rkman said.

Borzan agrees that there is still much work to be done to strengthen consumer protection. “Our consumers complain less often than those from more developed countries, who fight for their rights,” concluded the Croatian MEP.

More news on the activities of Croatia’s MEP Biljana Borzan can be found in our Politics section.

Translated from Jutarnji List (reported by Adriano Milovan).

According to Ipsos research, at least one negative shopping experience was reported by 29 percent of the respondents so far. In line with EU rules, a new Croatian Central Consumer Portal may provide the answer for consumers to be able to access everything they need to know about their rights.

As Darko Bicak/Poslovni Dnevnik writes on the 25th of November, 2018, a new set of European Union rules will soon be incorporated into domestic consumer protection legislation with the adoption of proposals sent to the Croatian Parliament.

Despite the generally welcome move, practice hasn't reflected theory so far, and information has shown that consumers tend to find it very hard to deal with the proverbial "forest" of regulations that exist when it comes to consumer rights and protection, and want easier access to information about their rights, as well as clear instructions to find out exactly who to contact when they feel that their rights have been denied, violated, or otherwise infringed upon.

The Ministry of Economy is therefore preparing a unique, Croatian central consumer portal entitled "Everything for Consumers" (Sve za potrošače) which should kick off with work by the end of this year, or just a little later at the very beginning of 2019.

"Our goal is that consumers no longer have to waste their time to first get the information [they need] about which competent body they require, then [spending more time] on just how to get to the [required] information from that body, but instead to have everything they need to know at their disposal - from how the product needs to be labelled in order for them to get all the information they need, and how it's necessary to point out the retail price to the possibility of the termination of the contract and the return of the goods, to what to pay attention to before they make purchases online,'' they state from the Ministry of Economy.

For the launch of the Croatian central consumer portal, inspiration drawn directly from field experience was used, and this year, campaigns across the country were organised, in March, September, and even on this coming Saturday another one will held at Zagreb's Zrinjevac.

The research conducted into this by the Ipsos agency back in September for the aforementioned Ministry shows how just a very small number of those over the age of 16, a mere 16.7 percent, believe they are somewhat or completely acquainted with their consumer rights. As many of 33.5 percent of consumers are totally unaware of what their rights as consumers are, and at least one negative customer experience was experienced by as many as 29 percent of the respondents, and most of them, as much as 71 percent, had a problem with a purchased product, followed then by public service irregularities (20 percent).

The move on creating the Croatian central consumer portal, and generally on placing greater emphasis and concern on consumer rights has been welcomed by Croatia because it ensures the continued proper functioning of the market, and the customer's satisfaction is very much in the interest of business people working in this field because transparency and fair rules often work as a trustworthy condition for returns, with re-purchases often then being made.

Make sure to stay up to date with our dedicated business and politics pages for more information like this.

Click here for the original article by Darko Bicak for Poslovni Dnevnik

ZAGREB, March 18, 2018 - The number of queries and complaints made by Croatian consumers exceeds 25,000 annually and is increasing, the head of the Croatian Consumer Protection Association Ilija Rkman told Hina in an interview on the occasion of World Consumer Rights Day, which is observed on March 15.

Real-life House of Cards and Games of Thrones are not enough for Croatian users.