Roaming, insurance, travels: what Brexit means for consumers

No one knows what the future relationship between the UK and the European Union will be like. But we know that any decision will impact consumers on both sides of the Channel.

Over the years the European Union has established consumer protection rules that cover many aspects of daily life, such as food, mobile communications and travels. Rights are enforced by European authorities or networks of national authorities under the arbitration of the European Court of Justice. So the detachment of the UK from the EU requires to review all these mechanisms. Which guarantees will be in place for EU and British consumers engaging in cross border trade? And how will existing or new rules be enforced in the UK? A paper by European consumer organisation BEUC explains the details.

How consumers are affected

Food safety – There are EU rules on issues such as quality standards, labelling and chemical subtances to ensure that the food bought in Europe is safe. Although these rules are not always applied in a uniform way, they are accompanied by controls and market surveillance systems of which EU consumers will continue to benefit after Brexit. For British consumers, things might change with new domestic rules and if the country leaves the single market, new mechanisms will have to be put in place.

Health care – When on holidays or on a business or school trip in an EU country, people who fall ill or have an accident can use the European Health Insurance Card (EHIC) to access the local health system. The draft withdrawal agreement says that EU nationals currently living in the UK and British residents in the EU will continue to benefit from this system when travelling in the respective territories (the card only covers short stays). Whether this will be allowed for everyone else in the future depends on the outcomes of the negotiations.

Roaming charges – Since June 2017, consumers no longer pay roaming fees when using the mobile phone in another EU country. Again, the continuation of this agreement will have to be negotiated and roaming fees may be reintroduced when travelling to or from the UK, as it is the case between the EU and Switzerland.

Air travel – People flying with a EU-based airline and departing from EU airports are entitled to assistance or compensation if flights are cancelled or delayed. In the future, people travelling with British companies or departing from the UK might not benefit of the same protections. The EU also bans some airlines from its territory on safety ground. It is not clear which conditions will apply after Brexit in situations where a flight originates in a third country and lands in the UK.

Road transport – At present insurance cover taken out in an EU country is valid all over the EU, so EU citizens travelling to the UK, and vice versa, do not need to buy extra protection. Driving licences are also mutually recognised. These conditions might also change depending on the final deal.

Online shopping – There are common rules across the EU regarding contractual arrangements such as returns of faulty goods and refunds. The EU also recently decided to remove unjustified geoblocking (restricting the access to the content of a website based on the user’s geographical location), which allowed companies to offer the same products at different prices in different states. Will this ban continue in the UK in the future?

Credit cards and international payments – As part of the single euro payments area (SEPA) regulation, banks cannot charge more than the domestic fees for payments made within the EU. After leaving the Union, British consumers might face surcharges for certain forms of payments (e.g. international transfers or credit cards) in the EU. Similarly, EU consumers might be exposed to increased charges for payments in the UK.

Insurance and financial products – Financial services by UK-based providers in the EU, and vice versa, depend on the “passporting” system, which allows companies to operate across the EU with the authorization of only one national financial regulator. This will be one of the sticking points in Brexit negotiations and the final outcome might affect insurance products, private pensions and savings investments.

Personal data and privacy – The new EU data protection regulation (GDPR), which allows individuals to have more control on how companies use their data, has just been enforced. Once again, there is a question mark on whether this will be carried in the UK after Brexit and which other guarantees will be put in place to ensure a smooth data flow in Europe.

What is at stake

For all these sectors, the key issues at stake are:

Choice – At present EU and UK consumers can buy products and services from both sides of the Channel without seeing delays in deliveries and at affordable prices. “Ideally, an agreement should enable this to be as free and frictionless as possible, while ensuring the necessary consumer protections,” says BEUC. Otherwise choice might be more limited.

Price – Customs procedures, administrative formalities and possible tariffs and quotas will determine whether access to imported products will still be affordable after Brexit.

Safety and quality standards – The EU has alert systems to monitor the quality of products placed on the market, such as TRACES4 for livestock and food products, RASFF for food and feed and RAPEX for non-food items. In 2017, for example, more than 2,000 non-food items failing safety requirements were notified to RAPEX prompting the withdrawal from the market. “A coherent and efficient system of import checks needs to reassure consumers that the safety of the products imported from the other side corresponds to national standards with minimum disruption,” says BEUC.

Resolution mechanisms – Consumers have to be protected from fraudulent and misleading practices, and if something goes wrong after a purchase, a system needs to be in place to inform them about their rights, solutions or access to justice. BEUC says: “It is key that UK and EU consumers continue to have access to redress mechanisms in cross-border situations.”

How consumers’ rights will be negotiated

The draft withdrawal agreement published in March says that all EU rules will continue to apply in the UK during the transition period, from Brexit day until 31 December 2020.

The UK’s EU withdrawal bill will also transfer EU legislation into UK national law, so all existing rights will remain in place in the UK. However, it is possible that new legislation will change them in the future, diverging from EU’s standards.

As regards the negotiation of a future trade agreement, there is a risk that consumers’ considerations will be minimal, according to BEUC. “There is currently no structure that allows for stakeholder participation in the design of the new EU-UK relationship.”

At EU level, BEUC refers to the Expert Group on Trade Agreements, which discusses consumers issues in the context of EU trade negotiations and includes consumer representatives. In the UK there is a stakeholder advisory group, but it does not include consumer representatives, says BEUC. The task to consider impacts for consumers could be given to the EU Expert Group or to a new dedicated advisory group. But to avoid disruptions, BEUC recommends to start addressing them already in the withdrawal agreement. British consumers’ association Which? also developed a charter of principles, asking that consumers’ rights are respected in Brexit talks.

Claudia Delpero © all rights reserved.
Photo courtesy Pixabay.