SIGNIFICANT AMENDMENTS IN THE CONSUMER PROTECTION LAW
The Law on the Amendment to the Consumer Protection and Property Ownership Law (in Turkish, “Tüketicinin Korunması Hakkında Kanun ile Kat Mülkiyeti Kanunda Değişiklik Yapılmasına Dair Kanun”, hereinafter referred to as “Amendment Law”) was published in the Official Gazette dated 1 April 2022 and numbered 31796. With the Amendment Law, there has been significant changes in the field of Consumer Protection Law.
With the amendments, certain new measures for the consumers are put in place and certain new obligations for the providers are imposed which we have compiled and bring to your attention as below.
Apart from the changes related with time share vacation (in Turkish, “devre tatil”) that has been in force as of 1 April 2022, the rest of the provisions will enter into force on 1 October 2022, i.e. six months after the publication of this Amendment Law.
What are the key changes?
1. Consumer loan agreements: With the Amendment Law, if the consumer pays the entire loan within the 14 days withdrawal period, it will be considered as exercising the right of withdrawal and the related fees will be refunded to the consumer.
In indefinite term loan agreements, the obligation to notify the consumer of interest rate changes 30 days in advance will only be required if the interest rate is increased.
To offer credit-linked insurance as a package with the loan, the companies will have to offer the option of an uninsured loan to the consumer. Also, the insurance will only be a guarantee for the repayment of the loan and the conclusion of the consumer loan agreement cannot be subject to the purchase of ancillary financial products and services.
2. Prepaid housing sales (in Turkish, “ön ödemeli konut satışları”): It will be mandatory to deliver the prepaid housing to the consumer within the time envisaged in the contract. In any event, this period of delivery cannot exceed forthy eight (48) months from the date of the contract.
3. Time share vacation (in Turkish, “devre tatil”): With the Amendment Law, it is aimed to prevent sales to front companies in order to protect the consumers from being victimized by prohibiting the sale of pre-paid timeshare sales through cooperatives, trade company or association or membership of a foundation. Accordingly, from 1 April 2022, timeshare sales can only be realized through financial leasing and timeshare contracts.
Time share vacation contracts can be concluded for a maximum period of ten (10) years, and if the consumer is notified at least 90 days in advance that he/she will not use his timeshare right for a certain period, the consumer will be relieved of his obligation to pay a price because he/she does not use his timeshare right.
4. Electronic commerce: In distance sales contracts, intermediary service providers are responsible for the following acts:
- Operating an uninterrupted system for consumers to provide and follow their requests and notifications;
- Providing and confirming preliminary information to the consumer, and demonstrating this severally with the vendor or the provider;
- Apart from situations where the data entry is made by the vendor or the provider, the deficiencies in the obligatory matters to be informed;
- Keeping records of the consumers’ transactions with the vendors or providers and providing this information to the relevant institutions, organizations and consumers, if requested;
- Transactions that cause vendors and providers to act in breach of distance contracts in which the intermediary service provider breaches the contract on the provision of intermediary services;
- In the event that a payment is collected on behalf of the vendor or the supplier, severally responsible with the vendor or the supplier from the obligations regarding the right of withdrawal for the delivery or performance; except for the cases where the payment is transferred to the vendor or the supplier after the delivery or performance of goods and services to the consumer, and the consumers use their optional rights with respect to defective goods and services.
- Failure to perform the contract at all or properly where campaigns, promotions or discounts are organized without the approval of the vendor or provider.
- Compliance and proof of the matters in the preliminary information and the information in the advertisements.
6. After sales services: Information with respect to the after-sales service stations will be recorded in the system to be established by the relevant Ministry and the service stations will use the phrase “special service”) in all their activities and channels. If upon expiry of the indemnity period, after sales services will not be provided during the lifespan determined by the relevant Ministry, consumers shall claim compensation for their damages from the manufacturer or the importer. The (i) products that require after-sales service, (ii) minimum number of authorized service stations to be established, (iii) maximum repair times, (iv) responsibilities of service stations and (v) other application procedures and principles will be determined by regulation.
7. Consumer Arbitration Committee: As per the Amendment Law, the upper limit for disputes in which Consumer Arbitration Committees are authorized has been increased from TRY 15,430 to TRY 30,000 for the year 2022. Should there be no consumer arbitration committee in the place of residence of the consumer or in the place where the consumer makes the transaction, an application can be made to the local district governor’s office. An objection to the consumer arbitration committee’s decision can also be made before the consumer courts in the consumer’s residence.
8. Fines: The Amendment Law increases administrative fines foreseen in the Consumer Protection legislation. In case of violation of the obligations set forth in the Amendment Law on timeshare vacations, a prison sentence from three (3) to six (6) years shall be imposed. If the violation occurs via internet, the Advertisement Board (in Turkish, “Reklam Kurulu”) may determine to block access to the entire website if it is not possible to implement the blocking of such website or if it is technically impossible to block access to the infringing content or to prevent the violation by blocking access to the relevant content.
Pursuant to the Amendment Law, the penal provisions for the breach of the above- mentioned obligations are increased and it is therefore recommended that vendors, providers, manufacturers, and importers who are active in e-commerce and retail services ought to ensure full compliance in this respect.
Our Law Firm remains at your disposal for any further clarifications or assistance you may need about the subject matter.