Consumer Protection Act Amended to Enhance Consumer Rights

The Legislative Yuan adopted the Taiwan Consumer Protection Act as amended by completing the third reading thereof on June 2, 2015, by which consumers’ rights are further reinforced accordingly.  Highlights of this amendment are summarized as follows.

1.  Standard Contracts

(1)  Business operators shall not make consumers, by standard terms and conditions, waive their rights to review contractual terms before signing a standard contract;
(2)  Business operators shall provide consumers with the original of a standard contract after consumers have signed or executed the contract;
(3)  Business operators shall bear the burden of proof if they contend that their standard form contracts signed with consumers are in compliance with the Consumer Protection Act; for example, they have to produce evidence to prove that they have shown consumers the contractual terms or have provided consumers with a reasonable time period for contract previewing;
(4)  Business operators who fail to take corrective action for including mandatory and prohibitory provisions in the standard contracts will be fined in an amount up to TWD500,000.  To implement business operators’ inclusion of the mandatory and prohibitory provisions in standard contracts, the amendment adds that business operators who use standard contracts but fail to include the mandatory and prohibitory provisions therein and further fail to take corrective action within the given time limit should be fined in an amount of no less than TWD30,000 and no more than TWD300,000.  Further, if such business operators continue failing to take corrective action within the given time limit, they will be fined, for each time of such failure, in an amount of no less than TWD50,000 and no more than TWD500,000. 

2.  E-Commerce Transactions and Door-to-Door Transactions

(1)  The terms “mail-order purchase” and “door-to-door sale” are revised as “e-commerce transaction” and “door-to-door transaction”, respectively;
(2)  For e-commerce and door-to-door transactions, business operators are required to provide clear, simple, and understandable consumption information thereof;
(3)  The 7-day trial may not be offered to reasonably exceptional circumstances of e-commerce transactions.  To protect the rights of both business operators and consumers, this amendment adds a proviso that the 7-day trial requirement may not be applicable under reasonable exceptions of e-commerce transactions, and authorizes the Executive Yuan to specify and determine such reasonable exceptions.  It is foreseeable that purchases of fresh produce, audio and video media products, and mobile apps may not be eligible for the 7-day trial period;
(4)  Business operators shall refund the purchase price within 15 days after consumers have returned the purchased goods. 

3.  Consumer Litigation

(1)  Thresholds for bringing class actions by consumer protection groups on behalf of consumers are lowered.  According to this amendment, the requirements of consumer ombudsmen’s consent and prohibition against an attorney’s remunerations are abolished, and the prerequisite that a consumer protection group to bring a class action must have been organized for at least 3 years is now revised as 2 years, which is to make more consumer protection groups eligible to bring class actions for consumers and encourage attorneys to take on class action cases.  Moreover, the central competent authority or the Executive Yuan are required to ask consumer protection groups to initiate actions for consumers to seek damages payment so as to safeguard consumers’ rights when there is any major consumer dispute arising with the necessity of bringing a class action;
(2)  Further to impede business operators’ malicious injury and damage, this amendment raises the maximum amount of punitive damages to be imposed on business operators who intentionally cause injury or damage up to 5 times the loss or damage suffered by consumers, rather than 3 times.  Also, consumers can seek payment of punitive damages in an amount up to 3 times the loss or damage caused by business operators by gross negligence.  The regulation governing punitive damages to be imposed on business operators who cause damage by negligence remains the same that the consumers can demand punitive damages in an amount up to 1 time the loss or damage suffered by consumers.  (June 2015)
/CCS