Consumer Protection Act 2020 – The Most Important Provisions of the New Bill

The new Bill on Consumer Protection, which is currently in Parliament, aims at the consolidation and simplification of certain Laws which regulate issues of Consumer Protection as well as the provision of more effective protection of consumers.

In this article we analyse the main parts of the Bill as well as its most important provisions.

Parts of the Bill

It should be noted from the outset, that the Bill does not include the consolidation of laws relating to financial matters (such as the Law on Consumer Credit or the Law on the Distance Selling of Financial Services) but it includes provisions that may affect financial contracts with provisions relating to unfair contract terms.

Under the Bill, the following laws will be consolidated:

  • Unfair Commercial Practices Law
  • Misleading and Comparative Advertising Law
  • Unfair Contract Terms Law
  • Consumer Rights Law
  • Indication of the Sale Price and the Unit Price of the Products offered to Consumers Law
  • Certain Aspects of the Sale of Consumer Goods and Related Guarantees Law
  • Sale of Products at a Discount Law

Most Important Provisions of the Bill

The Bill is divided in 11 Parts and the essential legal provisions are included in Parts 2 to 7:

  • Part 2 deals with unfair commercial practices and Part 3 with misleading and comparative advertising.
  • Part 4 deals with consumer rights arising from in-store and out-of-store contracts and distance contracts, while Part 5 provides for guarantees relating to contracts for the sale of goods entered into with consumers.
  • Part 6 refers to the indication of prices, ie the obligations of a trader to inform consumers and improve their information as well as to facilitate price comparison.
  • Part 7 provides for unfair contract terms. It is probably the most important part of the Bill, as it also covers unfair terms in contracts of a financial nature.
  • Parts 8 and 9 contain the duties, responsibilities and powers of the Consumer Protection Service in relation to violations of the Law. In relation to unfair contract terms, to date, the Consumer Protection Service could only proceed with an application to the Court for an injunction against their use. It is extremely important to mention that, according to the New Bill, this is the first time that the use of unfair contract terms is subject to a fine.

In accordance with the provisions of the Bill, the Consumer Protection Service will not be provided with extensive powers, including powers of investigation as well as the right to:

  • On-site inspection, seizure of information, requirement for the provision of information by members of the trader’s staff, the taking of photographs, purchasing goods or services even under a covered identity in order to investigate a case concerning the violation of the Law.
  • In case a violation is identified, the Consumer Protection Service may order the termination of the violation, publish its decisions, take court measures to prohibit the violation, impose an administrative fine of up to 5% of the offender’s turnover or a fine of up to 500,000 Euros.
  • One of the most important changes in the legislation is the possibility of accepting commitments by the offender to stop the violation. This is essentially a contract between the Consumer Protection Service as well as the alleged offender under which it undertakes to stop the infringement and the Consumer Protection Service may commit to stop the investigation against the offender etc,
  • Part 9 contains the possibilities for persons who have a legal interest deriving from the Law, to request injunction from the Court. Persons having a legal interest are the director of the Consumer Protection Service, consumer organizations or associations, consumers who are directly affected by the violation of the Law and competitors of the accused person.
  • A consumer whose financial interests have been affected has the right to file a lawsuit individually for payment of compensation, withdrawal from the contract and/or reduction of the price.
  • Part 10 Contains the criminal offences which include:
    • Failure to comply with a decision or administrative sanction of the Director.
    • The obstruction of the Consumer Protection Service.
    • The provision of false, misleading or inaccurate information to the Consumer Protection Service.
    • Refusal to provide information reasonably requested by the Consumer Protection Service.

Perhaps the most important provisions of this Bill are provided in Part 11 of the Bill. These provisions are based on Decision C497/13 – Faber v. Autobedriff Hazet (2015) of the Court of Justice of the European Union. Based on these provisions, the Court dealing with a dispute within the framework of the Law must, if it has at its disposal the necessary information or upon a simple request for clarification to:

  • examine whether a person is acting as a consumer and,
  • to clarify whether any provision of the Law has been violated

In the event of a dispute concerning unfair commercial practices, the Court may also, on its own volition, issue an order or provide redress to any Party.

No provision of the Law may be waived by agreement, contractual term or otherwise.

This article does not constitute legal advice.

The publication of this article is partly funded by the European Union’s “Consumer Programme (2014-2020)”.

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