On 19 December 2019, the Ministry of Economy published in the Federal Official Gazette the Regulations to the Federal Law on Consumer's Protection (the Regulations), which entered into force on 20 December 2019 and repeal the regulations that were in force since 2006.
The Regulations include several provisions and procedures that were covered in very generic terms by the Federal Law on Consumer Protection (FLCP) or were carried out in practice, but that were not sufficiently explained.
Moreover, several definitions are more specifically explained. For example, Article 2 of the Regulations provides that the reference to "products" shall be understood only as referring to movable goods, and that "new products" are those of first use. In the particular case of cars, they will be considered as new when they are placed on the market for the first time and have not exceeded 1,000 km.
Regarding the procedures detailed in the Regulations, the following are included:
- Consumers' Registry - Through this procedure, consumers who do not wish that their information is used for advertising purposes may register in the Public Registry of Consumers;
- Voluntary review of advertising - Suppliers may submit their advertising to the opinion of the Federal Consumer's Protection Bureau ("PROFECO") prior to displaying it to consumers. This procedure was known as copy advice. By including it into the Regulations, a clear procedure to carry out the voluntary review of advertising is now provided;
- Procedure for alerts on recalls - A new chapter detailing the procedural rules for issuing an alert to consumers for products that may endanger their life, health, safety or economy is included in the Regulations. Recall is defined as the communication by any means informing the consumer of the existence of defective or harmful products, with the purpose of having the product or service reviewed, repaired or replaced;
- Accuracy of information on products- In order for suppliers to be able to demonstrate the accuracy of the information and advertising of their products, they may submit evidence to PROFECO to demonstrate it. Such evidence shall consist of scientific and objective documentation, technical studies, laboratory or research results recognized by national or international organisms with scientific and technical capacity;
Additionally, new concepts are included to define abusive commercial conducts or practices, in addition to the ones already contemplated in the FLCP. Some of these practices are price manipulation as consequence of health contingencies, performing actions without the express consent of the consumer, and charging unauthorized fees to consumers, among others.
Due to recent amendments to the FLCP that allow PROFECO to impose fines, the Regulations set forth that fines will now be considered as tax assessments, which will be subject to an administrative enforcement procedure as provided in the Federal Tax Code.
The Regulations provide that invoicing to consumers must be made, at the consumer's choice, by electronic or optical means.
Likewise, these Regulations define preventive measure as actions that PROFECO needs to undertake to enforce administrative acts that have not been met. Such measures will be applied depending on the gravity of the act, including the lack of attendance to a conciliation hearing, when a supplier does not comply with the suspension of advertising or sale of a product, or when the accuracy of the advertising is not verifiable. These measures include preventive detentions of up to 36 hours.
Finally, the Regulations include a new chapter regarding compensation for flight delays attributable to passenger airlines. PROFECO will create a registry to include airlines' policies on compensation to passengers for flight delays, cancellations or overbooking.
How can we help?
We will be glad to discuss the provisions of the new Regulations with you, to assist you with the analysis of the implications of these changes in your operations, and to support you to implement policies and actions to comply with the relevant provisions.