(New) Turkish Consumer Protection Act 2013 (entry into force May 2014) Samim Unan Aim- Article 1 • In a view to public interest, – – – – – – – to protect the consumer in general Health Security Compensation of losses sustained Protection in respect of the environmental damages To inform the consumer To encourage the consumers with regards to self protecting measures, civil society organizations Scope- Article 2 • The law applies to consumer transactions and practices directed to consumers. (Only b2c and p2c and not b2b or p2b or p2p) • “Consumer transaction” means any contract or legal act (including contract for work, carriage, brokerage, insurance, mandate, banking services or similar contract or legal acts) between consumers and real or legal persons acting for the purposes of their business or profession (including public entities) in the market of goods or services. (Art3(l)). • “Consumer” means real persons or legal entities acting for purposes other than commercial or professional (Art.3(k)). Fundamentals – Article 4 Basic Principles • 4(1)- Where the law provides the written form as form requirement, the contracts and informative documents shall be drafted – not less than 12 points (size), – in an understandable language, clear and simply readable manner. • A copy printed on paper or in a durable medium must be given to the consumer Fundamentals – Article 4 Basic Principles • Durable medium is defined in Art.3(f): • CD, DVD, memory card, e-mail, SMS, internet and similar medium or device • Through which information sent by or to the consumer can be recorded or stored for a reasonable period – in order to be examined later, – Or to be copied without alteration Durable medium in DMD (Distance Marketing Directive of the EU) • "Durable medium" is defined in the DMD as: “any instrument which enables the consumer to store information addressed personally to him in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored”. • Recital 20 of the DMD states: "Durable mediums include in particular floppy disks, CD-ROMs, DVDs and the hard drive of the consumer's computer on which the electronic mail is stored, but they do not include Internet websites unless they fulfil the criteria contained in the definition of a durable medium." Fundamentals – Article 4 Basic Principles • Art.4(1) (continued) • If a contract does not contain a term or terms that should be included, this lack shall not effect its validity. • The gap must be remedied by the trader. Fundamentals – Article 4 Basic Principles • Art. 4(2) • Contract terms cannot be altered during the contract period to the detriment of the consumer Fundamentals – Article 4 Basic Principles • Art.4(3) • No additional charge can be requested from the consumer in counterpart of – The performances of obligations that the consumer may reasonably expect in the context of the contract entered into and that are included in the legal obligations of the trader – Expenses incurred by the drafter in his own interest Fundamentals – Article 4 Basic Principles • Art.4(3) • Any fees, remunerations, commission, expenses (other than interest) that can be collected in exchange of services or products offered by banks, financial institutions granting consumer loans and institutions issuing cards shall be determined by the Banking Regulator. Fundamentals – Article 4 Basic Principles • Art.4(4) • The trader shall give the consumer all information relating to all fees and/or expenses that he will request on paper as attachment of the contract (?). • If the contract is concluded by using distant communication means, information shall be furnished in a manner suitable to the distant communication means used. • The burden of proof in respect of the information duty lies with the trader. Fundamentals – Article 4 Basic Principles • Art.4(5) • In respect of the legal acts accomplished by consumers, as negotiable instrument only bills written to the name of a specific person can be created. • Those bills must be separately created for each installment. • Otherwise they shall not be binding on the consumer. Fundamentals – Article 4 Basic Principles • Art.4(6) • Personal guarantees furnished in respect of consumer transactions for securing the obligations of the consumers shall be considered “ordinary bailment” whatever the expression used may be. • On the contrary, personal guarantees furnished by the other party (trader) for securing the credits of the consumer shall always be considered “joint bailment” Fundamentals – Article 4 Basic Principles • Art. 4(7) • In consumer transactions compound interest is prohibited even in cases of default. Fundamentals – Article 5 Unfair contract terms • Art.5(1) • “Unfair contract terms” means clauses in a contract causing an imbalance between respective contractual commitments of the parties to the detriment of the consumer in violation of the good faith and fair dealing Fundamentals – Article 5 Unfair contract terms • Art.5(2) • Unfair contract terms inserted in contracts concluded with consumers are invalid. • However other terms of the contract remain valid • The trader cannot pretend that he would not have concluded the contract without the invalid terms. Fundamentals – Article 5 Unfair contract terms • Art 5(3) • If the consumer was not in a position to influence the content of a clause because it was drafted in advance and put in the standard contract, it shall be presumed that the said clause was not negotiated. If the drafter alleges that a clause of a standard contract was negotiated with the consumer, he shall bear the burden of proof. • In case an overall evaluation reveals that a contract is a standard one, the fact that a clause or a portion of it is negotiated shall not exempt the remaining parts of the application of rules about unfair contract terms. Fundamentals – Article 5 Unfair contract terms • Art.5(4) • If contract terms are written (?), a clear and understandable language must be used. • If a clause is not clear and understandable or is ambiguous, it will be construed in favor of the consumer. Fundamentals – Article 5 Unfair contract terms • Art.5(5) • Rules about unfair contract terms shall apply also to contracts drafted by persons or institutions pursuing activities on the basis of an authorization granted by public authorities. Fundamentals – Article 5 Unfair contract terms • Art.5(6) • The unfairness of a contract clause shall be determined having regard to the goods sold or services undertaken, circumstances underlying the conclusion of the contract, other contract terms or the terms of another contract related to the unfair clause • „Anknüpfungsmoment“ ist the conclusion of the contract. Fundamentals – Article 5 Unfair contract terms Art.5(7) The determination of unfairness shall not be based on the valuation between • The respective essential contract stipulations (essentialia negotii) • the price of the goods or the service in the market and the price agreed in the contract Provided that the clause is written in a clear and understandable language. Fundamentals – Article 5 Unfair contract terms • Art.5(8) • The Ministry shall be empowered to take necessary action to eliminate unfair terms from standard contracts or to prevent their use • Art.5(9) • The Ministry shall be empowered to determine by regulation contract terms that shall be regarded as unfair without limitation(?). Refraining from selling – Article 6 • Art.6(1) • Goods exposed (in the shop window, on electronic medium, on the shelf or on display) must be sold unless it is expressly stated that they are not for sale • Art.6(2) • It is not allowed to refrain from providing services unless just cause exists. Refraining from selling – Article 6 • Art.6.3 • Persons acting for commercial or professional purposes shall not subject the sale of a good or a service – To the purchase of that good or service at a quantity they unilaterally determine, or – To the purchase of another good or service unless usage or custom to the contrary or reasonable cause exists. Unsolicited goods or services- Article 7 • Art.7(1) • No right can be invoked against the consumer in connection with the sending unsolicited goods or providing unsolicited services. • The silence of the consumer or the consumption of the good or service shall not be regarded as acceptation of the offer destined to conclude a contract. • The consumer is not under the obligation to send back or protect the good. • Art.7(2) • He who alleges that goods or services are ordered shall have the burden of proof in that respect. Defective goods –Article 8-12 • Art.8(1) • Defective are the goods which, at the moment they are delivered to the consumer don’t conform to the contract – Because they differ from the sample or model agreed, or – Because they don’t bear the qualities they should objectively possess. Defective goods –Article 8-12 • Art.8.2 • Goods – Not possessing all the particularities mentioned on the package, label, user instruction, web site or advertisements – not conforming to the quality declared by the seller or determined by the technical rules – Not being equivalent to similar goods for the purpose of use – Possessing material, legal or economic defects reducing or lifting the usefulness reasonably expected by the consumer Shall also be deemed defective. Defective goods –Article 8-12 • Art.8(3) • If the goods which are the subject matter of the contract are not delivered within the agreed period or • If the erection (montage, assembly) is not properly carried out (in case the erection must be carried out by the seller or under his responsibility), the performance shall be deemed defective. • If the erection is incumbent on the consumer, the errors or defaults in the montage instructions shall constitute also defective performance. Defective goods –Article 8-12 • Art.9 (Liability for defective goods) • The seller must deliver the goods in conformity with the contract. • In respect of the declarations made through advertisements, the seller shall not be liable for the their content, if he proves that – He is not aware and should not be expected to be aware of those declarations, or – If the content of the declaration had been rectified before the conclusion of the contract, or – The decision to conclude the contract was taken irrespectively of the declaration (no causal link) Defective goods –Article 8-12 • Art.10 (Burden of proof) • Defects discovered within six months following the delivery shall be presumed to have existed also at the delivery. In such case, the burden to prove the exemption from defect shall lye with the seller. • This presumption shall not apply when inconsistent with the nature of the defect or the good. Defective goods –Article 8-12 • Art.10 (Burden of proof) • In case the consumer is aware or expected to be aware of the defect at the conclusion of the contract, the performance shall not be considered defective. The consumer shall nevertheless benefit of his rights for other defects. Defective goods –Article 8-12 • Art.10 (Burden of proof) • A label easily readable must be put on the defective good when offered to sale to warn the consumer. • This label must be given to the consumer or an informative text (clearly written) must exist on the invoice, sales slip or sales document. • A product not conform to technical parameters cannot be marketed. Defective goods –Article 8-12 • Art.11 (Right of choice) • In case the defect of the good is detected, the consumer may – Avoid the contract (by declaring his readiness to surrender the defective good) – Request a proportional reduction (by keeping the goods) – If repair is not excessively costly, request the repair of the goods (all expenses shall then be borne by the seller) – If possible, request that the defective good be replaced by a sound one. Defective goods –Article 8-12 • Art.11 (Right of choice) • Repair or replacement can be requested also from the producer or the importer. • Seller, producer and importer are jointly liable for repair or replacement. • However the producer or the importer may escape liability if he proves that the defect appeared after he launched out the good. Defective goods –Article 8-12 • Art. 12 (Prescription) • Claims for defective goods are prescribed in 2 years to count from the date of delivery. • In respect of immovable property 5 years. • For second hand sales at least (?) 1 year (for immovable property at least (?) 3 years) • If the defect was hidden by fraud, no prescription(?). Defective service –Article 13-16 • Similar rules (though with necessary alterations) exist for defective services. Consumer contracts-sale on installments-Article 17 et seq. • Sale on installments: • In respect of goods or services. • Consumer pays the price in different portions throughout the period of time agreed. • Leasing contracts are assimilated to sale on installments • Form requirement: written form. But the “Formmangel“ cannot be invoked to the detriment of the consumer. Consumer contracts-sale on installments-Article 17 et seq. • The consumer has the right to avoid the contract (withdrawal right). • 7 days; dispatch is enough • The consumer has also the right to pay the whole amount of debt at once or pay the installments before the due date. In both cases the seller must make a reduction in respect of interest and commission. Consumer loans- Art.22 et seq. • Consumer loan: a contract by which the credit institute assumes the obligation to grant a loan (through postponement of the payment, drawdown facility or similar) against interest or other advantage. • Credit card contracts are deemed consumer loans if they provide postponement for more than 3 months or payment by installments. • Form requirement: written form Consumer loans- Art.22 et seq. • Pre-contractual information duty: information form containing the conditions of the loan must be given to the consumer a reasonable time before the conclusion of the contract. • Consumer can avoid the contract within 14 days. • The lender must inform the consumer about the right of withdrawal. Consumer loans- Art.22 et seq. • Interest rate: • In contracts concluded for a pre-determined period, the interest rate must be fixed at the outset and cannot be altered during the contract. • If the contractual interest rate or the effective annual interest or the total cost of the loan is not indicated in the consumer loan contract, the loan can be used without interest until the end of the contract. Consumer loans- Art.22 et seq. • Alteration of the contract • Alteration of the consumer credit conditions is not possible when the consumer loan contract is concluded for a determined period • In case of a consumer credit contract for an undetermined period, the alteration of the interest rate must be notified (in writing on paper or on durable medium) to the consumer 30 days prior to the entry into force. In no case the increase of the interest rate shall have any retroactive effect. Consumer loans- Art.22 et seq. • The consumer shall have the right to effect payments before the due dates agreed. If he does so, decrease of the interest or commission. • Unless the consumer requests in writing or by means of a durable medium, no insurance relating to the loan shall be taken out for the consumer (?). The insurance taken out must be in conformity with the object of the loan and in case of a fixed sum insurance, with the outstanding indebtedness and with the maturity date (?). Consumer loans- Art.22 et seq. • Tight loans (it is question of a tight loan when a loan is granted exclusively for the purchase of a determined good or service and the loan and sale contracts form an economic entity). • There is economic entity – If the loan is financed by the seller or service provider – Or if the loan is given by a third party lender, when the lender profited from the services of the seller or service provider for the preparation or conclusion of the loan agreement – Or if the loan agreement clearly states the sale of a predetermined good or service. Consumer loans- Art.22 et seq. • If the consumer withdraws from the sales contract, and addresses his withdrawal will also to the lender within the withdrawal period, the tight loan agreement will come to an end. • In tight loans, if the goods are not delivered or the service is not provided properly; the seller, the service provider, and the lender shall be jointly liable upon withdrawal of the consumer or when the consumer avails himself of his right to request a reduction of price. Consumer loans- Art.22 et seq. • In the absence of a stipulation providing that the loan is granted for the purchase of a determined good or service, the mere payment by the lender of the purchase price of a good or service that the consumer freely decides is not a tight loan. Consumer loans- Art.22 et seq. • If a bank account is open in connection with a loan agreement for a determined period and if this account is used solely in relation to the loan, no fee or expense can be charged to the consumer. • A deposit account with credit cannot be opened in relation to a loan agreement for a determined period without the prior request of the consumer. • Institutions issuing cards are not allowed to offer cards to the consumers for which annual membership fee or another similar fee is levied. Home finance • Home finance: – – – – Consumer loan for the purpose of purchasing home Home finance by way of leasing Loan facility secured by a mortgage on home Loan facility granted in order to refinance the above loans • Form requirement: written form • Pre-contractual information duty • Special rules about default, tight loans, interest rate, payments before the maturity date and insurance imposition Home finance with prepayment • Consumer assumes the obligation to pay the price (if agreed by installments) and the seller assumes the obligation to transfer the property over the real state and to deliver after the price is fully paid. • Form requirement, pre-contractual information duty of the seller, right of withdrawal (within 14 days following the conclusion of the contract and until transfer of the property over the real estate) • Security: (insurance or other security to guarantee the sellers’ obligations) Other consumer contractscontracts concluded off-premises Art. 47 • “Contract concluded off-premises” means a contract entered into by the seller or the provider and the consumer – outside the business premises with the physical presence of the parties (irrespective of who has made the offer) – at the business premises of the seller or the provider without the physical presence of the parties or by distant communication means, after negotiations conducted with the consumer outside the business premises – During a travel aimed at promoting or selling the goods or services to the consumer Other consumer contractscontracts concluded off premises Art. 47 • In respect of contracts concluded off-premises • information duty • Form requirement: Qualified written form (the seller or the provider must ensure that the consumer inserts the date with hand writing and signs – wet signature), a copy must be given to the consumer • Right of withdrawal (cooling off period): 14 days. Withdrawal period begins to run after information about this right is furnished to the consumer and extinguishes a year later (?). Other consumer contractsDistant contracts Article 48 • A distant contract is a contract concluded – without the physical presence of the parties, – on a system created for distant marketing of goods or services, – with the use of distant communication means until after the contract is entered into. • The consumer must be informed about the payment undertaking he assumes if he consents to the contract. • The seller or provider must perform within 30 days. Other consumer contractsDistant contracts Article 48 • Right of withdrawal (cooling off period): 14 days. Withdrawal period begins to run after information about this right is furnished to the consumer and extinguishes a year later (?). • Electronic service providers who mediate on the system they run on the Internet between sellers/providers and consumers must keep the records relating to the transactions and provide a copy of these records to the consumer upon his request. Other consumer contracts- distant financial service contracts – Article 49 • Financial services include any service of a banking, credit, insurance, personal pension, investment or payment nature. • Distant contract about financial services are contracts entered into by the provider and the consumer on a system aimed at distant marketing (of financial services), by using distant communication means. Other consumer contracts- distant financial service contracts – Article 49 • Duty to inform the consumer about the cooling off period (withdrawal right) and the contractual obligations he will assume if he enters into the contract with the provider. • The information must include also that the consumer is contacted for a commercial purpose. • Records must be kept: In particular the acceptation of the consumer. Other consumer contracts- financial distant contracts – Article 49 • The provider must furnish the contract terms to the consumer – on paper or – in a durable medium • as a basic principle, before the consumer expresses his consent to the contract, • or if upon the request of the consumer the contract is concluded by using a distant communication means not appropriate to the provision of pre-contractual information on paper, immediately after the contract is entered into Other consumer contracts- distant financial service contracts – Article 49 • The consumer may request at any moment during the contract, a copy of the contract on paper without any charge. • The consumer may ask for the change of the distant communication means (provided that the new means is suitable for the nature of the financial service) • Withdrawal right (cooling off period):14 days Other consumer contracts- distant financial service contracts – Article 49 • The consumer shall have the right to notify his will to bring the contract to an end by “any” distant communication means. • Delegated acts: details will be determined by the Ministry (a serious illness). Other consumer contracts• • • • • • Vacation Contracts Time share vacation contracts – Article 50 Long term vacation service contract- Article 50 Package tour – Article 51 Subscription agreement – Article 52 Promotional organizations by media enterprises- Article 53 Awareness - protection • Price labels Art.54 • Price labels to be put on goods: to include the overall price (including taxes), price per piece (unit), place of production (or lists hung where labels are not possible) • With regards to services: price lists to hang • In case of discrepancy between prices indicated on labels or in lists and the price at the payment desk (cash)- price in favor of the consumer shall prevail • Reduced price offering campaigns (Solde = Ausverkauf): price labels or lists to indicate the price before and during the campaign Awareness - protection • User Manuals and Guides – Article 55 • Goods must be offered to consumers with user manual or guide in Turkish (that shall include information on the use, assembly, installation, maintenance and simple repair) and with labels containing international symbols and signs • Warnings (whether written or oral) about safe use –if they are on the goods- must be in Turkish Awareness - protection • User Manuals and Guides – Article 55 (continued) • In case of goods presenting a risk for human health or the environment, clear warnings must be put on those goods or in the user manual. • The preparation of the user manual shall be under the responsibility of the producer and the importer; the handing over of the user manual to the consumer (and the onus of proof thereof) shall be under the responsibility of the seller. Awareness - protection • Warranty certificate: - Article 56 • The producer and the importer must produce a warranty certificate (content will be determined by the Ministry) in respect of the goods. • The seller shall be responsible for the completion of the certificate and for handing over to the consumer. • The warranty period is at least two years (from the delivery of the goods). Based on the particularities of the relevant good, the duration of the warranty may be expressed otherwise (by the Ministry). Awareness - protection • Warranty certificate: - Article 56 (continued) • In case the consumer has opted for the repair of the defective good, – if the good sustains another breakdown or – the the maximum period for repair is exceeded or – it is revealed that repair is impossible the consumer may exercise another optional right. • The seller cannot refuse the consumer’s request. • The seller, producer and the importer shall be jointly liable for the fulfillment of the consumer’s request. Awareness - protection • Voluntary warranty- Article 57 • Voluntary warranty means additional undertaking of the seller or service provider, producer or importer in respect of the goods or services (such undertaking may relate to replacement, repair, maintenance, price reduction or similar), legal rights of the consumer remain reserved. • The use of the rights deriving from voluntary warranty cannot be subject to the payment of any expense or fees. • The voluntary warranty obligation must be assumed in writing or in durable medium. • The person who undertakes through advertisements shall be bound by his public statements. Such statement must express that the legal rights of the consumer are reserved and include the conditions of benefiting from the warranty and the relevant period in which the warranty will be effective. Awareness - protection • After-sales service: Article 58 • Producers and importers are responsible for providing maintenance and repair service for the goods until the expiry date (use- by date) • For certain goods (determined by the Ministry) they must obtain a license for that purpose • The repair in an authorized service station must be completed before the maximum period officially determined Awareness - protection • After-sales service: Article 58 (continued) • The producers or the importers may create their own service station or use the services of already established service stations or organizations. In the latter case they shall be liable for acts or omissions of those services/ organizations. • İndependent service stations also shall be liable to consumers for defective services rendered. • In case the commercial activity of the importer is ceased, the seller, the producer and the new importer shall be jointly liable for the provision of the the maintenance and repair service during the warranty period. After the expiry of the warranty period, the producer and the new importer shall provide the said services. Awareness - protection • Increasing the consumer consciousnessArticle 59 • In national education programs, new features shall be added in order to increase consumer awareness. • Radios and TV chains: programs of at least 15 minutes per month between 08.00 – 22.00 hours. Awareness - protection • Consumer awards- Article 60 • Consumer awards are awards granted with a view to encouraging the consumer protection or consumer awareness or making use of the consumer rights. • Consumer awards must be given on a “not for profit” basis and in accordance with criteria published in advance. Advertisements • Commercial advertisement- Article 61 • Commercial advertisement means an announcement having the character of marketing communication made in a channel by written, visual, oral or similar means for the purpose of – selling or renting a good or a service – or informing or convincing the targeted group in connection with a commerce, business, artisan or profession. • Commercial advertisements must conform to principles determined by the relevant authority, moral values, ordre public, personality rights and to fair dealing. Advertisements • Commercial advertisement- Article 61 • Advertisements apt to misleading the consumer or exploiting his inexperience or imperfection or putting him in danger of death or bodily injury or property damage, encouraging terrorist acts or criminality, harming public health, exploiting aged persons, children, and disabled persons are prohibited. • Tacit (or implicit or disguised) advertisement is prohibited (omission to mention as advertisement in writings, news, emissions or programs what is in fact advertisement) Unfair commercial practice- Article 62 • Unfair commercial practice means a commercial practice not conform to professional diligence, adversely affecting the behavior of the average consumer (or the member of group) to whom it is addressed, with regards to a specific good or service (or increasing considerably this probability). • In particular, aggressive or misleading practices (and those enumerated in the official list published by the Ministry) shall be deemed “unfair”. • Unfair commercial practices are prohibited. Councils • Advertisement committee: determination of the basic principles relating to advertisement; protection of the consumer against unfair commercial practices • Consumer council: determination of consumers’ problems; consumers’ needs and reporting them to relevant authorities. • Advertisement council: giving advice on advertisement politics. Judiciary on consumer protection • Panel of arbitrators for small claims • Appeal to consumer court possible against arbitrators’ decision • Claims from a certain amount: Consumer courts. Applications are free. • Consumer organizations, relevant public authorities and the Ministry are entitled to request (except in cases of unfair commercial practices and commercial advertisements) in case general consumer interests are involved – precautionary measures for eventual violations, – declaratory relief decisions in respect of a violation or – the cessation of the violation Judiciary on consumer protection • The judicial decisions may be published. • A legal action may be started by the Ministry, consumers or the consumers organizations in order to obtain – a declaratory relief determining that a series of goods offered to public is defective – that the production or sale be stopped – that the defect be remedied – that the goods be collected from those who keep them for offering to sale. Consumer organization means associations or foundations established for the purpose of protecting the consumer. Judiciary on consumer protection • If the defective character of a series of goods offered to sale is determined by a judicial decision, the court may order the provisory cessation of sales or that the defectiveness be remedied. • The producer or the importer shall remedy the defectiveness of the goods in three months from the notification of the court decision. • If defectiveness cannot be remedied due to impossibility, the goods must be recalled by the producer or the importer. • The recalled goods shall be disposed of partially or totally having regard to the risk they present. Judiciary on consumer protection • Penal sanctions • The law provides pecuniary sanctions for most of the violations.