On 9 September 2021, National Assembly of the Republic of Serbia adopted a new Law on Consumer Protection (“Official Gazette of the RS”, No. 88/2021 ) (hereinafter: Law ), which seeks to change the shortcomings of the previous law and to harmonize rights with European regulations. Application of the Law started on 20 December 202, except for provisions related to the obligation of traders to participate in out-of-court disputes, which will be applicable as of 20 March 2022. The aim of the new Law is to provide consumers greater legal protection as well as to harmonize this area with the law of the European Union.
Below are some of the most important novelties.
Obligation of traders to participate in out-of-court disputes
The previous Law on Consumer Protection proscribed the possibility of out-of-court settlement of disputes, but it was poorly implemented in practice, and the reason for that is the fact that there was no duty of traders to get involved in mediation proceedings initiated by consumers.
The new law prescribes the obligation for traders to participate in out-of-court disputes with customers. In addition, traders are now obliged to inform consumers in a clear and understandable way at the point of sale before concluding a contract for the sale of goods or services, the possibility of out-of-court settlement of the dispute. If you are engaged in electronic sales, make sure that you update your general terms and conditions of business and sales with all the necessary information and notices.
In order for the consumer to be able to initiate an out-of-court dispute resolution procedure, it is necessary to meet certain preconditions. Namely, it is necessary that he/she previously stated a complaint to the trader, as well as that he received the decision of the trader on the stated complaint with which he is dissatisfied. It is important to keep in mind that the consumer loses the right to submit a proposal for out-of-court dispute resolution within one year from the day of (unsuccessful) filing of the complaint.
Therefore, the new law obliges the trader to participate in the procedure of out-of-court settlement of consumer disputes (although it is not specified what participation actually means) before the body for out-of-court settlement of consumer disputes, whose conditions for establishment and work are determined by the Ministry of Trade, Tourism and Telecommunications.
The aim of the introduction of the obligation of out-of-court settlement of disputes is an attempt to reduce the pressure on the courts in connection with consumer disputes, as well as to provide more efficient legal protection to consumers. Therefore, unlike the previous decision, the property census for resolving consumer disputes in out-of-court proceedings was abolished (the previous decision overlooked the limit of up to 500,000.00 dinars).
Therefore, the legislator has provided penalties for those economic entities that refuse to participate in mediation or do not publish a notice that the buyer has the right to out-of-court settlement of the dispute in the amount of 50,000.00 RSD. Out-of-court settlement of consumer disputes in accordance with this law may take a maximum of 90 days from the date of submission of the proposal, and in exceptional cases, when the subject of the dispute is complex, the 90-day period may be extended by a maximum of 90 days. to inform the consumer and the trader.
It should be borne in mind that the obligation for out-of-court settlement of disputes enters into force only on March 20, 2021, unlike other provisions of the Law.
Limit the possibility of direct advertising
It is common practice for retailers to use a variety of marketing methods to promote their products or services. In this regard, in practice, direct calls or emails addressed to consumers, the so-called ” cold calling “, which are obviously the easiest and fastest way to potential customers , are particularly common .
Although the previous Law on Consumer Protection recognized and prohibited such ” aggressive business practices “, until the new Law, there was no real mechanism for combating such practices.
In this regard, the Law prohibits direct advertising by telephone, fax or e-mail and other means of distance communication, without the prior consent of consumers. Anyone who does not want to receive calls or messages will be able to register by filling out the form with the mobile or fixed telephony operator and register in the register ” Do not call ” kept by the regulatory body responsible for electronic communications (RATEL). The register is publicly available, so that traders will easily be able to find out which consumers do not want to be disturbed.
In case of non-compliance with the above provisions, traders will risk paying a fine in the amount of 30,000.00 RSD for entrepreneurs or 50,000.00 RSD for legal entities.
Obligation to make a budget
An additional obligation provided by the new Law is that the trader is obliged to make a budget with the specification of services, if the value exceeds 5,000.00 dinars. Before starting to provide the service, the trader is obliged to obtain the written consent of the consumer to the budget. The consumer is authorized to refuse to pay the price if the service provider does not submit the specification. If the price is agreed without the explicit claim of the trader for the accuracy of the calculation, the trader cannot request a price increase of more than 15 percent of the budget.
Duty to receive complaints instead of delivery duties
As before, consumers have the right to file a complaint regardless of whether the product was purchased at the point of sale or online. The seller has 8 days to respond to the complaint from the day of its receipt, with the fact that it is now explicitly prescribed that the seller must receive the complaint and act on it. In this regard, he is obliged to:
- issues a confirmation of receipt of the complaint,
- submit a response to the consumer to the complaint,
- resolve complaints, ie provide appropriate information to the consumer in case of rejection of the complaint.
In response to the seller’s response, the consumer is obliged to respond to the seller’s response no later than three days from the date of receipt of the seller’s response . However, having in mind that the goal of the Law is consumer protection, by missing the stated deadline, it is assumed that the consumer does not agree with the proposal of the trader.
What is crucial for traders is to adequately regulate internal procedures related to complaint resolution procedures and take into account deadlines, in order to avoid possible out-of-court and court disputes as well as misdemeanor liability.
Exercise of rights related to the warranty
An additional novelty of the Law refers to a more precise regulation of the complaint procedure refers to the exercise of consumer rights under the guarantee after the expiration of two years from the date of purchase. Namely, if the consumer received a guarantee for the purchased product and if the complaint is declared after 2 years from the date of purchase, the consumer is obliged to declare the complaint to the guarantor . The guarantor is usually the manufacturer of the product, not the seller, and in this way the business of retailers who have so far had the obligation to receive consumer complaints related to the exercise of rights under the guarantee is relieved.
The misdemeanor liability of the trader has been aggravated
The law envisages stricter liability of traders, which is reflected in the extension of the statute of limitations and the introduction of the possibility of issuing misdemeanor warrants.
Namely, so far, the general one-year statute of limitations provided by the Law on Misdemeanors has been applied to misdemeanor proceedings related to violations of the Law on Consumer Protection. However, the new Law increased the statute of limitations for initiating misdemeanor proceedings to 2 years as a general rule, or 3 years (only for certain misdemeanors).
In addition to the above, the Law introduces the possibility of issuing misdemeanor warrants, which provides for a fixed fine for certain misdemeanors in the amount of 50,000.00 dinars for legal entities and 30,000.00 dinars for entrepreneurs, so a misdemeanor warrant can be issued for these misdemeanors. This specifically means that if a person pays the fine within 8 days from the day of receipt of the misdemeanor order, he is released from paying the other half of the imposed fine.
This article is for informational purposes only and does not constitute legal advice. If you need additional information related to the subject or assistance in drafting internal acts or taking long measures to implement the harmonization of your business with the new law, feel free to contact us by email office@ncrlawyers.com or by phone +381677049551.
