Written by Ian Cardenas, Paralegal
On 5 September 2023, the President of the Republic of Chile, Gabriel Boric, signed a bill aiming to strengthen the protection of consumer rights: “Sernac Te Protege” (Sernac Protects You).
The main objective of this project is to improve individual consumer solutions and strengthen the work of the National Consumer Service (SERNAC), through a series of tools, including the power to sanction companies that fail to offer timely and relevant solutions to consumers with individual consumer problems.
In addition to the power to impose penalties, the service may order the cessation of infringing behaviour and the refund of undue charges, as well as require companies to take preventive measures against future infringements.
In this regard, the Seremi of Economy, José Zúñiga Verdugo, said
This is a bill promoted by the Ministry of Economy with the idea of giving greater powers to Sernac. These are aimed at being a guarantor of the rights of consumers in our country. It is to give it powers so that it can support and level the playing field a little between companies and consumers, who are often helpless in the face of them.”
On the other hand, the regional director of Sernac, Erick Orellana, explained:
the bill has very clear and marked goals. One has to do with having the power to impose penalties, but beyond that we are concerned with providing solutions to consumers that help them improve their quality of life. And for that we are going to focus on having tools that allow early mediation. This power can be given to consumers to provide them with a solution”
The main objective of this initiative is to streamline the resolution of consumer problems at the individual level and to ensure that companies comply with the law.
Sanctioning Power
SERNAC may, through an efficient, expeditious and duly regulated procedure, apply sanctions to offending companies for individual complaints, in addition to other complementary measures, such as:
- Order them to cease the infringing conduct
- Force the restitution of any undue charges that they have made
- impose measures aimed at preventing further infringements.
An administrative sanctioning procedure is established, which will be in charge of an independent, specialized and centralized sub-directorate of SERNAC, called the Sub-directorate of Sanctioning Procedure. This procedure will be carried out in accordance with the principles of impartiality, publicity, speed, non-formalization and procedural economy. The entire procedure shall be recorded in an electronic file.
Claims management
The bill also strengthens the role of SERNAC in handling the complaints it receives and obliges companies to respond to them.
Infringements of the consumer protection law include the following:
- The unjustified absence of a response to the complaint by the supplier.
- Failure to comply with the terms of the solutions offered during SERNAC’s handling of the complaint.
In the event that the consumer accepts the supplier’s proposal, this understanding will be materialized in an agreement which will have the character of an out-of-court settlement, extinguishing the claimant’s action to pursue the supplier’s liability once its stipulations have been fulfilled.
When will the changes take effect?
The Project establishes rules for its deferred entry into force over time.
Amendments to the Consumer Protection Act that aim to strengthen or recognise consumer rights will come into force 12 months after the publication of the law in the Official Gazette.
The amendments that relate to the creation of a complaints management procedure and the sanctioning procedure will be implemented gradually and by region, with vacancy periods of 18, 24 or 30 months from the date of publication of the law in the Official Gazette, depending on the region.
Conclusion
This bill seeks to allow SERNAC to impose sanctions and corrective measures, such as the cessation of infringing behaviour and the restitution of undue charges. It also seeks to streamline the complaint management process and apply fines to companies that do not resolve problems in a timely manner.
The sanctioning procedure can be initiated by SERNAC or by consumer complaints, ensuring compliance with the law and protecting consumers.
