A bill with substantial amendments to Consumer Protection Law No 24,240 has been submitted to Congress recently.
A bill to amend Consumer Protection Law No 24,240 (CPL) has been submitted to Congress. This bill includes several previous bills. It was developed by, among others, Representative Stella Maris Córdoba (of the Frente para la Victoria party), the Under Secretary of Consumer Protection, the Federal Consumer Counsel (COFEDEC) and the Consumer Consultive Counsel (CCC).
According to the bill’s written justifications (Fundamentos), it aims at updating the present Consumer Protection Law, ten years after going into effect. It replaces 25 of CPL’s 63 sections, and incorporates 5 new sections. The modifications are substantial, since they incorporate punitive damages, penalties for direct damage, class actions, a broading of the enforcement of the law and a cost-free process for plaintiffs.
We provide below the main amendments in the bill:
It broadens the purpose and definitions of the law: it refers to goods (and not to things as before), including goods received freely. The definition of consumer/user excludes those who are not end users and the supplier who is not covered by Law No 25,300 (for promotion of “MIPyMES”).
It broadens the definition of supplier: it includes liberal professionals (which before were expressly excluded) and contracts over used goods. It also broadens to include those who carry out activities related to design, creation, development and use of a trademark.
It defines the consumer relationship as the tie between supplier and consumer or user.
It establishes the priority of the CPL over any other specific laws.
It includes the duty to inform the terms of sale, the name and address of the manufacturer and additional costs.
For home services, it establishes the possibility for the user rescind the contract in the same way as it was entered into (by telephone, electronically, etc).
It eliminates the exclusion of these services from the scope of the CPL and establishes a new proceeding that grants more protection to the consumer.
It extends in favor of the consumer the majority of the terms: the indemnity for defects or malfunction goes from three to six months; the term to go back on a purchase at a distance goes from five calendar days to seven business days.
It incorporates the concept of punitive damages in case of non-compliance by the supplier of its contractual or legal obligations. Liability is joint and several in case of more than one supplier. It establishes a maximum civil fine of AR$ 5 million, adjustable annually according to the Consumer Price Index published by the INDEC. The fine must be applied by a court, independently of other fines that may apply.
It incorporates compensation for direct damages in favor of the consumer, up to a maximum of AR$ 3000 adjustable annually according to the Consumer Price Index, to be applied by the enforcement agency.
The enforcement agency is a local agency, in each jurisdiction, without prejudice to a National Authority (Secretary of Technical Coordination of the Ministry of Economy). Each local authority may: investigate and try by consumer claims, issue precautionary measures and injunctions.
It modifies the proceeding, adding a conciliatory stage for actions filed by individuals (which is not applicable to actions filed by the enforcement agency or by associations); it increases fines in case of failure to respond and permits court fines (astreintes).
It includes judicial actions within the 3 year statutes of limitation set forth in the CPL, and in case of other terms in other laws, the term most beneficial to the consumer will prevail.
It includes collective actions. It broadens the scope of actions by consumer associations, establishes that individual consumers may depart from what is agreed; associations are not liable for costs and do not require prior mediation.
It proposes a process cost-free for all plaintiffs. In the case of individual consumers, those who are denounced may demonstrate the solvency of the consumer through an ancillary proceeding (which reverses the burden of proof). It establishes that courts must, when imposing court costs, evaluate the economic capacity of the parties.
It provides for the creation of courts in the City of Buenos Aires and in all the capital of the provinces.
