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  • Consumer Protection Act Amended

    25. 01. 2016

    The Act no. 378/2015 Coll., to amend Act no. 634/1992 Coll., on consumer protection (hereafter referred to as „Consumer Protection Act“). has come into effect as of 28. 12. 2015. The Act is a result of transposition of several EU directives into Czech domestic legislation. These directives generally aim at enhancing consumer protection and at harmonizing the level of consumer protection throughout the EU.

    The said amendment is going to affect mainly disputes between businesses, as sellers or service providers, and consumers. Two new obligations are introduced: an obligation to provide information about alternative dispute resolution (ADR) of a dispute and an obligation to take an active part in the alternative dispute resolution.

    To meet the information obligation the economic operators must inform the consumer, in a clear, comprehensible and accessible manner, about whom to turn to in the event of a consumer complaint to be addresses by way of ADR, including the internet address of the responsible entity. If the operator has its own website, the information must appear also there. The same rule applies to any General Terms and Conditions a contract with the consumer refers to. With respect to these obligations, the amended Consumer Protection Act becomes effective as of 1. 2. 2016. However, the operators are granted a period of 3 months to modify their General Terms and Conditions, i.e. they have until 1. 5. 2016 to do so. A failure to perform the information obligations is subject to a fine of up to CZK 1 000 000.

    As regards the obligation of active participation in ADR, the consumer may initiate an ADR procedure only after he or she has attempted and failed to resolve the dispute directly between parties. The consumer thus must first address the business with their complaint. If the consumer consequently turns to the appropriate body with their complaint, then the operator shall be notified of the motion immediately and has a duty by law to respond to the complaint in a relatively short period of 15 days and provide necessary cooperation. Again, a failure to do so is subject to fine of CZK 1 000 000.

    Further, the amended Act covers some general questions and newly defines terms such as unfair commercial practice and aggressive commercial practice. Previously used term misleading commercial practice was replaced with two terms, namely (i) deceptive acts and (ii) misleading omissions, and these terms are substantially newly defined.

    Misleading omission newly involves a situation when the operator fails to provide to the consumer an essential piece of informationor provides it in an unclear, incomprehensible or ambiguous manner. Essential information means first and foremost the price of the product or service, but also payment terms, delivery terms, terms for returns or complaints. With respect to price, it needs to be noted that it is strictly required that the price of the product or service is quoted including all taxes, fees and other monetary payments. If it´s not possible to quote the price in advance, then the formula according to which it will be calculated must be stated. Failure to quote the price amounts not only to deceptive conduct but also represents a failure of statutory information obligation which carries a fine of up to CZK 5 000 000.

    Section 5c of the Consumer Protection Act has to be highlighted as a novelty whereby the burden of proof has been shifted from the buyer to the seller. The supervisory authority may now demand that the seller proves that the factual claims made as part of their commercial practice are correct. If the seller fails to do so or the evidence fails to convince the supervisory authority, the seller will not prevail in the case.

    Given the new obligations and duties and in view of the high fines, we recommend that operators pay due attention to the amendment and modify their websites as well as General Terms and Conditions accordingly.

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