News & Insights
Significant Changes In Consumer Legislation
Ezgi Karakan | ASSOCIATE22.04.2022
The Law on the Amendment on the Consumer Protection and Property Ownership Law (“Law“) was published in the Official Gazette on 1 April 2022. Amendments were made in the law, especially in the provisions of default, consumer’s right of withdrawal, delivery period for housing, timeshare vacation and other contracts and penalties.
What Have the Changes Brought?
In case of default in paying the installments by the consumer in installment sales, to claim the remainder of the debt, unlike the previous provision, the consumer must not pay the installments constitutes at least one tenth of the agreed sales price in the contract
- Right of Withdrawal – If the consumer’s loan debt is paid in full within the period of the consumer’s right to withdraw in consumer loan agreements, this will be considered a withdrawal from the loan agreement, therefore no notification requirement regarding the exercise of the right of withdrawal shall be sought.
- Interest Rate Change – In event of changes in interest rate in indefinite term loan agreements, the obligation to notify the consumer is limited only to increase in the interest rate. However, to offer credit-linked insurance with the loan, the creditor will have to offer the option of an uninsured loan to the consumer. In line with the amendment the consumer loan agreement cannot be conditional upon purchasing subsidiary financial products and services other than related to consumer loan agreement.
In accordance with the amendment of the law, credit related insurance cannot be made in housing finance contracts without receiving a written or permanent explicit request from the consumer. In parallel with the amendment in consumer loan agreement, to offer credit-linked insurance with the housing finance contract, the house financing institution will have to offer the option of an uninsured agreement to the consumer, and the housing finance contract cannot be conditional upon purchasing subsidiary financial products and services other than related to the contract.
Prepaid housing sales
The maximum delivery period for prepaid housing sales was increased from 36 months to 48 months from the date of contract.
Distance contracts for goods prepared in accordance with consumer’s request or personal needs are excluded from the obligation to deliver in period of maximum 30 days. In addition, intermediary service providers are obligated to establish an uninterrupted system to transmit and follow up the notifications and demands of consumers.
Regarding the distance contracts intervened by those operating as intermediary service providers are responsible for matters stated below;
- Providing, confirming the preliminary information to the consumer, proving this severally with the seller or provider,
- Deficiencies in the preliminary information, except where the data entry is made by the seller or the provider,
- Keeping the records of consumers’ transactions with the sellers or providers and providing the information to relevant public institutions and organizations and consumers upon their request,
- Transactions in which intermediary service providers cause the seller or providers to act in breach of the contract due to their breach of contract,
- In cases where the price is collected on behalf of the seller or the provider, except for the transfer of the cost of the goods or service to the consumer after delivery or performance, as well as the exercise of the selective rights, severally responsible for obligations related to the right to withdraw by delivery or performance with the seller or the provider,
- Failure to perform the contract at all or as required in discounted, promotional sales or sales campaigns made without the approval of the seller or provider,
- Compliance of the matters in the preliminary information with the information in the advertisement and proving that matter.
Time Shared and Long-Term Vacation Contracts
Time share contracts that provide real rights based on ownership share with consumers cannot be established, except for contracts granting timeshare rights established in accordance with the provisions of the Property Ownership Law. In order to sell a timeshare vacation, it is required to have a real right on the property that is the subject to a timeshare vacation. In contracts granting the consumer the right to a timeshare, the price received must be returned immediately if the seller or the provider receive any price from the consumer before the withdrawal period expires. Establishment of prepaid timeshare contracts with consumers including contracts granting timeshare rights has been prevented. Timeshare contracts can be established for a maximum of ten years apart from contracts granting timeshare rights. Another important change is in case the consumer notifies that she/he will not use her/his vacation right for a certain period, ninety days prior the start of the vacation the consumer cannot be charged any price in timeshare vacation contracts.
Informing the Consumer and Protecting Their Interests
The definition of refurbished products is made as used goods that are offered for resale by improving their hardware, software or physical properties. Refurbished products must have warranty period of at least one year from the date of deliver to the consumer. After renewal in the centers authorized by the Ministry of Commerce the goods determined by the regulation can be offered for sale as a renewed product. Verification that the goods with electronic identity information have been used and registered will be made by the Ministry of Commerce, renewal centers and authorized buyer through the records of the Information Technologies and Communication Authority records.
Post Sales Services
Information regarding all authorized service stations must be recorded in the system created by the Ministry of Commerce in addition to after sales services. Service stations must use the phrase “special service” in all their all channel and activities. Consumer may demand compensation from the manufacturer or importer in cases where after sales service is not provided during the lifetime determined by the Ministry after the warranty period expires.
Consumer Arbitration Committee
Applications can be made to the district governor’s office in places where there is no consumer arbitration committee. An objection against the decisions of the consumer arbitration committee can be filed with the consumer court at the location of the committee or in the consumer’s residence. Moreover, in case of the consumer arbitration committee’s decision is annulled due to the submission of information or document to the consumer court which was not presented to the consumer arbitration committees even it was available, no litigation expenses and attorneys fee will be imposed against the consumer.
Administrative fines will be imposed in case of violation of the regulations regarding discretionary warranties and distance contracts, as well as failure to deliver or assemble the goods subject to the contract on time. In cases of violation of certain obligations regarding timeshare vacation, imprisonment from 3 to 6 years can be imposed.
Amendments on the Law on Consumer Protection will enter into force six months after the date of publication, apart from amendments regarding timeshare vacation and certain penalty provisions which entered into force of publication. Please find the full text of the Turkish version of the Law