(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 itsvalidity. • The gap must be remedied by the drafter.
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 drafter • 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 drafter 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 drafter.
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. • Otherwisethey 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 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 drafter of the contract 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 (essentialianegotii) • 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 protectthe 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 consumerdon’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 declaredby 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 montageinstructions 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 whereby 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 rulesabout 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 deliverafter 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 contracts- contracts concluded outside: Article 47 • “Contract concluded outside (of the business office)” means a contract entered into by the seller or the provider and the consumer • outside the business premises withthe physical presence of the parties (irrespective of who has made the offer) • at the business premises of the seller or the providerwithoutthe 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