a bill that "establishes measures to incentivize the protection of consumers' rights" was launched in a message by the President of Chile, Bulletin No.12.409-03 ("Bill"). This amends the relevant aspects of Law 19.496, which establishes rules on the protection of consumers' rights ("LPC").
On 20 April 2021 the Bill was submitted to the Joint Committee because the Chamber of Deputies had not approved the amendments proposed by the Senate regarding Article 15 bis being included in the LPC (see below). The current status of the Bill implies that it is likely to become law soon. It is therefore worth reviewing the main changes in order to assess their potential impact on consumer relations and to adopt appropriate measures.
What are the main amendments that the Bill incorporates into the Law to Protect Consumer Rights?
- It incorporates the pro-consumer principle as an interpretative rule of the meaning and scope of the Law to Protect Consumer Rights (LPC) "always in favour of consumers" (Article 2nd ter of the LPC), and the clauses of adhesion contracts "(...) when there are contradictory clauses [in adhesion contracts], the clause or part thereof that is more favourable to the consumer shall prevail" (Article 16 C of the LPC).
- It incorporates Article 15 bis that establishes that the rules relating to all personal data processing for consumers, including those established in Law 19.628 on the protection of private life ("LPD"), are considered special consumer protection rules.
What would be the consequences of incorporating this rule into the Law to Protect Consumer Rights? (a) class actions could be brought against any suppliers responsible for non-compliance with the rules on personal data processing, and (b) the National Consumer Service ("SERNAC") could exercise any of its powers with respect to suppliers that process personal data in a consumer relationship. For example, it could check and enforce compliance with the Law to Protect Consumer Rights, administratively interpret such rules, or initiate voluntary collective proceedings.
Furthermore, Article 15 bis establishes that (a) all rulings and sanctioning resolutions that involve personal data protection issues must be sent to SERNAC, (b) suppliers must "implement sufficient measures to ensure that data processing is secure and confidential, particularly that it is only used for the purposes authorized by the owner of that data", and (c) suppliers must also digitally report any security breach to any of their databases that contain consumer information within 24 hours of it being reported. If it cannot be communicated digitally, the supplier shall report the security breach by physical, telephonic or other suitable means within a period of 72 hours.
- It includes new requirements for adhesion contracts. (a) these contracts must be adapted to ensure that they will be understood by people with visual or hearing disabilities (Article 17 of the LPC), (b) they must also be sent to the appropriate supervisory body (Article 17 of the LPC), and (c) when a supplier signs an adhesion contract, it must tell consumers about the mechanisms and conditions for terminating it, and may not limit that process to those who pay outstanding debts or restitutions (Article 17 A of the LPC).
- It includes new rights for the consumers of financial products. What are these new rights? They include (a) the possibility of pursuing any breach of the LPC in the appropriate courts, (b) the option of submitting any disputes to (i) mediation, reconciliation or arbitration, where the supplier must report how these mechanisms function, or (ii) the Dispute Resolution System described in Article 56 A and the following articles of the LPC (the supplier may offer this), (Article 3 g) of the LPC), and (c) the ability to exercise the other rights established in the laws that refer to consumers' rights and especially the rights in Law 18.010, which establishes rules for loan transactions and other liabilities (Article 3 h) of the LPC).
- It incorporates the obligation to report the cost of the delivery service and how long it will take. This information will be considered basic commercial information (Article 1 No.3 of the LPC).
- It ensures that the consumer may terminate the consumer contract "without cause", within 10 days of receiving the product, or for any of the reasons in Article 3 bis of the LPC.
- It establishes the obligation of higher education institutions, professional and technical training institutes to grant certain study certificates free of charge to students or former students who request them, within 10 days of that request (Article 3 quater of the LPC).
- It extends the right to the legal guarantee (known as "3×3": repair, replacement or return) from three to six months (Article 21 of the LPC).
- It incorporates the obligation for motor vehicle suppliers to explain the voluntary warranty, mandatory maintenance, authorized technical services, and any other services. They must also provide the consumer with another vehicle similar to the one purchased when repairing it, provided it is still within the terms of the legal or voluntary warranty (Article 12 C of the LPC).
- It establishes that airlines must tell consumers in writing of their rights, if they are denied boarding due to airline tickets being oversold (Article 23 bis of the LPC).
Accordingly, the Bill proposes new wide-ranging obligations for suppliers in different markets, but it also establishes personal data protection obligations for all suppliers, which will significantly change how they sell their products and services. We therefore believe that it is necessary to study this Bill in detail and closely follow its passage, in order to carefully and efficiently prepare for its new requirements.