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In recent years, together with the pandemic, which has radically changed many commercial practices in the world, electronic commerce has developed in our country as well as the world, and this has led to radical changes in consumption habits. Along with these rapid changes, the need for both the protection of consumer rights and the clarification of the rights and obligations of service providers, especially in online sales has developed. As a result of the legislation’s inability to keep up with changes in consumption habits, various clauses have been identified as problematic. With this article, we would like to draw attention to these changes and how it is expected to prevent these issues.
The Law on the Amendment to the Consumer Protection and Property Ownership Law numbered 7392 (“Law No. 7392”), is published in the Official Gazette on April 1, 2022. The amendments that are introduced regarding the timeshare vacation agreements stated in The Consumer Protection Law numbered 6502 (“Law No. 6502”) have entered into force on the same date. Other changes mentioned below will enter into force on October 1, 2022.
In this article, we will discuss in detail the amendments introduced with Law No. 7392 that will significantly affect consumers. You can access Law No. 7392 here.
A. New Provisions Introduced by Law No. 7392
In sales by installments the consumer’s default in paying the debt and the seller/supplier’s right to demand the fulfillment of all the remaining debt will also be possible in cases where one-tenth of the price in the agreement and two consecutive installments are not paid or if one-fourth of the total price is not paid.
Before the amendments, the right of withdrawal in the consumer loans was only possible in case the consumer informed the creditor of its use. Within the scope of new provisions, if the consumer pays the total loan debt within the 4-day withdrawal period, the right of withdrawal will be considered as exercised, and, in this case, the relevant fees will be refunded. No notice will be required for this refund. As per the amendments, the lender in loan agreements of indefinite term will be obliged to inform the consumer in writing 30 days before only if the interest rate increases. The lender, who was obliged to notify in case of any change in the interest rate, will be released from this obligation after October 1, 2022, and will only have to make the necessary notifications in the event of an increase in the interest rate.
Articles of Law No. 6502 regarding insurance have been completely amended. Accordingly, in consumer insurance, it is no longer possible to make loan-linked insurance either without the consumer’s explicit consent in writing or through a data provider. If the consumer receives coverage from an insurance that is not recommended by the creditor and/or housing finance institution, this coverage is required to be accepted by both the creditor and/or housing finance institution. As regulated in the same article, it will not be possible to
enforce any kind of deed for housing finance agreements rather than loans. As of October 1, 2022, the consumer will have two alternatives regarding insurance and ancillary services unrelated to the loan transaction. This way, banks will no longer be able to force customers to buy insurance; and the consumer will be able to pick an uninsured loan upon request. Before the changes, the delivery period of the house in the prepaid housing agreements could not exceed 36 months as of the commencement date of the agreement.
As per the amendments, the delivery period could not exceed the agreed period and the maximum period stated in the agreement cannot exceed 48 months following the enforcement date.
Pursuant to Law No. 6502, only the seller and supplier were responsible to the consumers in distance sales agreements. Following the amendments, the intermediary service providers also became responsible. Law No. 7392, stipulates that, the seller, the provider as well as the service providers acting as intermediaries should also establish a system through which the consumers can easily communicate their requests regarding the said transaction with the manufacturer/supplier. Additionally, the rights and obligations in the distance sales agreement shall be clearly identified. The obligations of intermediary service providers and the degree of their responsibility are among the subjects that are regulated by Law No. 7892.
Accordingly, in distance sales agreements, intermediary service providers will be responsible for the following matters:
- establishing an uninterrupted system for consumers to send and track their demands and notices,
- being jointly responsible with the seller or supplier, for providing, confirming, and proving the preliminary briefing to the consumer,
- the deficiencies in the obligatory matters to be informed beforehand, except for the cases where the data entry is made by the seller or the supplier,
- keeping records of the transactions between the consumers and sellers or suppliers and, if requested, presenting this information to the relevant public institutions, organizations, and consumers,
- transactions that cause sellers and providers to act contrary to their obligations deriving from the distance agreements by violating the agreement on the intermediary service,
- are responsible severally with the seller or the supplier for the delivery or performance and the obligations regarding the right of withdrawal, except for cases where: (i) payment is made to the seller or supplier upon delivery of the goods or services to the consumer; and (ii) the consumers exercise their optional rights with regard to defective products and services,
- non-performance of the agreement or default in the performance in the campaigns, promotions or discounted sales they organize without the approval of the seller or the supplier,
- compliance and proof of the matters in the preliminary information and the information in the advertisements.
The additional provisions made to Law No.6502, forbid the sales of time-share with a down payment by a cooperative, commercial company, or via the title of membership of any association and/or foundation.
Through this provision, it is planned to prevent potential harm to the consumer via the establishment of shell companies. As of April 1, 2022, timeshare sales can only be made through financial leasing and timeshare vacation agreements. Agreements of this type can only be for a maximum period of ten years. In case the consumer notifies the seller at least 90 days in advance that they will not use their timeshare right for a certain period, the consumer will be released of the obligation of payment for not using this right.
With Law No. 7892, new provisions regarding renovated products were introduced. Accordingly, a clause has been added regarding the used goods that are re-sold by improving their hardware, software, or physical features, in other words, the products that are considered “renovated products”. As per the new provision, the sale of renovated products should provide the consumer with at least 1-year warranty starting from the date of delivery, the products can only be renewed in the units authorized by the Ministry of Commerce (“Ministry”), and authorization certificates should be available, and electronic records of the goods should be made. Related regulations are considered protective of consumer welfare.
In addition to obtaining a service qualification certificate approved by the Ministry, the authorized services providing after-sales services are obliged to register their information in the system of the Ministry. For the purposes of distinguishing the services that are not connected to any manufacturer / importer, it is made obligatory to add the term “special service”.
Compensation has become available for the damage incurred in cases where after-sales service is not provided to the consumer.
New regulations have removed the obligation of having at least one consumer arbitration committee in each district. With this removal, the monetary limits for the application to the consumer arbitration committee in the provinces and districts are lifted as well. Instead, application to the consumer arbitration committee has been made mandatory for disputes up to TRY 30,000.00 for the year 2022, without distinction of any province or district. Applications made to the district governorship will be considered valid for districts that do not have a consumer arbitration committee. Appeal to the decisions of the consumer arbitration committee has become possible to the Consumer Court not only located in the place where the relevant consumer arbitration committee is located, but also in the consumer’s place of residence. The decisions of the consumer arbitration committee will primarily be made by the e-notification method, and if the e-notification is not delivered to the parties, it will be made in accordance with the provisions stipulated by Notification Law No. 7201.
One of the biggest changes made with Law No.7892 is the increase in the penalties. In addition to administrative fines and prison sentences, security measures related to blocking access can be enforced by the Advertisement Board. If it is understood that the decision to block access to the content cannot put an end to the violation, the Advertisement Board may decide to block access to the entire website.
Law No. 7392, regulates effectively and in detail the consumer in default on installment sales, consumer loan agreements, insurance, delivery of residence, distance sales agreements, resale of renewed products, postpurchase services, the duties of the consumer arbitration committee, and penalty provisions. It is expected that the changes will have significant consequences, especially in the retail, e-commerce, banking, and technology sectors.
In addition, Law No. 7892 provides a transition period with Temporary Article 3. The pre-amendment provisions will apply to the consumer transactions that took place prior to the effectivity date of Temporary Article 3, October 1, 2022. For agreements of indefinite period, that will continue to be in force after the
effectivity date, new provisions will be applied as of October 1, 2022.