On January 11, 2018, the Ministry of Economy published in the Federal Official Gazette a Decree amending provisions of the Federal Law on Consumer's Protection (the "Decree").
The Decree mainly refers to a broadening of the authorities of the Federal Consumer's Protection Agency ("PROFECO") for the application of enforcement measures and sanctions The Decree also includes amendments to the regulation of transactions by electronic means, advertising, doorstep sales, standard contracts, timeshares, warranties, among others.
Among the principal amendments are the following:
- PROFECO is now expressly empowered to publish, through any means, information of products or services that have been considered as risky or that do not comply with the law; issue alerts to consumers and provide information to other authorities about defective or harmful products or those that put consumers' health or safety at risk; instruct recall procedures and make them of public knowledge; withdraw and instruct the destruction of products that, by irrefutable means, put at risk consumers' life or health.
- In advertising matters, it is forbidden to use a legend that indicates a product is recommended or approved by a professional association, without having the scientific evidence necessary to support that claim. The results of investigations and monitoring activities published by PROFECO, may be used by the suppliers with advertising purposes, provided that the means and date of publication are visible, clear, complete and verifiable.
- Regarding transactions made by electronic means, the Decree includes the minimum requirements that suppliers must comply with, such asproviding information regarding specifications, conditions and terms applicable to the offered product or service and establishing mechanisms for consumers to verify their purchase intention, purchase acceptance, proof of purchase, claims, identity, payment and delivery mechanisms, among others.
- The minimum term for warranties is extended. When a good or service is offered with a warranty, it shall not be less than ninety days. The previous term was of sixty days.
- Standard agreements registered before PROFECO must be used in every commercial transaction and be consistent with the agreements registered with the authority. Any modification made in detriment of consumers will be sanctioned and considered as a serious misconduct. PROFECO will publish on its website a list of suppliers and intermediary services providers that have registered their standard agreements.
- Commercial intermediaries (brokers) are included as co-responsible for the commercialization of timeshares.
- The definition of pawnshops is adjusted by replacing the traditional concept of corporations with that of legal entities, to also include non-profit organizations.
- Finally, PROFECO now has the power to directly execute the fines it imposes. When the infringer pays the fines within thirty business days following the date in which it is served, a discount of fifty percent of the amount will be applied, provided that the fine is not challenged.
It is important to mention that the corresponding amendments became effective the day after the publication of the Decree, i.e. on January 12, 2018.