The Consumer Protection Law of 2021

The Consumer Protection Law of 2021

by George Coucounis

“Aligns with EU law and regulates consumer protection issues

THE new legislation for the protection of consumers entered into force with the enactment of Law 112(I)/2021 dated 12.5.2021 to harmonize with the acts of the European Union. Its purpose is the consolidation, modernization and codification of the Laws that regulate consumer protection issues, as well as the strengthening of the powers of the authorised service, which is the Director of the Consumer Protection Service of the Ministry of Energy, Trade and Industry. The interpretation of the Law states that “consumer” means any natural person who, in relation to contracts or commercial practices covered by the Law, acts for reasons that do not fall within his commercial, business, craft or free professional activity. “Consumer contract” means any contract entered into between a trader and a consumer and “complain” means a statement supported by reasonable evidence that a trader has committed, is committing or may commit a breach of the provisions of the Law.

The Law applies to the unfair commercial practices of businesses to consumers as defined in the Law, before, during and after a commercial transaction. “Average consumer” means the consumer who is reasonably well informed and reasonably observant and circumspect, taking into consideration social, cultural and linguistic factors, as well as consumer characteristics which make him particularly vulnerable to unfair commercial practices. “Commercial practice” means any act, omission, manner of conduct or representation, commercial communication, including advertising and marketing, of a trader, directly connected with the promotion, sale or supply of a product to consumers.

According to article 5 of the Law, unfair commercial practices are prohibited and a commercial practice is unfair when it is contrary to the requirements of professional diligence and is likely to materially distort the economic behaviour of the average consumer, is misleading and or aggressive. A commercial practice is considered misleading if it contains false or untrue information or it deceives or is likely to deceive the average consumer as to: (a) the existence or nature of the product, (b) the main characteristics of the product, such as availability, benefits, risks, composition, geographical origin, results to be expected from its use etc., (c) the extent of the trader’s commitments, (d) the price or method of its calculation, (e) the need for service, spare part, replacement or repair, (f) the nature, characteristics and rights of the trader, and (g) the rights of the consumer, including the right of replacement or return. In relation to the meaning of the term “product”, the Law provides that it means any goods or services, including immovable properties, rights and obligations.

The Law applies to every contract term concluded between the trader and the consumer and its scope of application regarding unfair contract terms is Part VII. “Unfair contract term” means any term which, contrary to the requirements of good faith, it may cause significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. Article 50(2) provides that the assessment of the unfair nature of a term is made after taking into account the nature of the goods or services which are the subject of the contract, or the circumstances surrounding the contract at the time of the conclusion of the contract, as well as all other terms of the contract or other contract on which it depends. In order to determine whether a term satisfies the good faith requirement under article 50(3), particular account shall be taken of: (a) the strength of the bargaining position of the parties, (b) whether the consumer had an inducement to agree to the term, (c) whether the goods or services were sold or supplied to the special order of the consumer, and (d) whether the seller or supplier has dealt fairly and equitably with the consumer.

The consequences of unfair terms are defined in article 51 which provides that an unfair term in a contract between a trader and a consumer does not bind the consumer. The contract will continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair provisions. Annex IV of the Law contains an indicative and non-exhaustive list of terms which may be considered unfair, such as any term that calculates the interest rate and describes how to calculate it on the basis of 360 days or another number of days instead of 365 or 366 in case of a leap year.