On 20 June 2023, the National Assembly (NA) passed the Law on Protection of Consumers' Rights (amended) ("New LPCR"), with an effective date of 1 July 2024, superseding the current Law on the Protection of Consumers' Rights No. 59/2010/QH12 ("LPCR 2010").The New Law includes 80 articles addressing various issues that will have direct impacts on both onshore and offshore businesses that transact with consumers in Vietnam.
Definition of consumer
The PCR Law 2023 defines a consumer as a person who purchases and/or uses products, goods or services for consumption or daily life purposes of a person, a household or an organisation, and not for a commercial purpose. Under this definition, consumers do not include persons purchasing and/or using goods, services or products for any commercial purpose.
Prohibited acts
Among new prohibitions, the PCR Law 2023 prohibits business entities/individuals to use images, advice or recommendations of influential persons to encourage consumers to purchase or use products, goods or services without notifying them that the content is sponsored; or to request consumers to purchase another product, good or service as a condition to conclude a contract contrary to the consumer’s wishes.
Consumers, organisations and individuals, on the other hand, are forbidden to abuse the protection of consumer rights to infringe upon the interests of the State as well as the lawful rights and interests of other organisations and individuals.
Safety and confidentiality of consumer’s information
Business entities/individuals are required to ensure safety and confidentiality of consumer’s information in accordance with the PCR Law 2023 and other relevant laws. The information protection rules must be publicly displayed at the head office, business locations and published on the website and applications (if any). Business entities/individuals are also required to have measures to prevent the acts of hacking or illegally accessing, illegally using, and illegally altering, updating or destroying consumer’s information.
Standard form contracts
When entering into the standard form contracts or using general transaction conditions, the business entities/individuals must give reasonable time for the consumers to study the standard form contracts or general transaction conditions.
Besides, business entities/individuals doing business on goods, products and services which regularly have a large number of purchasers or users and directly affect the consumers must register their standard form contracts and general transaction conditions with the competent State agency before those documents are entered into by business entities/individuals and consumers. The list of such goods, products and services will be issued and revised by the Prime Minister from time to time.
The PCR Law 2023 introduces a list of the clauses that are not permitted to be used in standard form contracts and general transaction conditions. Some examples of these clauses are: providing sanctions that are more unfavourable to the consumer in case of breach or termination of the contract; allowing the business entity/individual to extend the contract without having a prior notice or a mechanism enabling the consumes to opt for extension or termination of the contract; contradicting the goodwill principle of civil laws causing disadvantages to the consumer.
Recall of defective products and goods
Defective products and goods are classified into two groups: (a) those potentially cause harm to consumer’s health and lives, or cause harm to consumer’s health, lives and properties; and (b) those potentially cause harm to consumer’s properties. Each classification is subject to different procedures for recall. The PCR Law 2023 provides the general procedures for recall of defective products and goods and leaves the details for future regulations.
Prior information provided in distance transactions
The PCR Law 2023 stipulates that business entities/individuals selling products, goods or services to consumers in cyberspace, or via electronic means or other means must provide consumers with certain information prior to the contract is concluded.
The above-mentioned prior information includes the name, business address, contact details of the business entity/individual or its representative in Vietnam (if any); the enterprise registration certificate’s number or equivalent document; the price, quantity, quality, origin, and expiry date of the products, goods or services; the payment and delivery; the conditions and mode of goods exchange or return, the validity period of the offer; tax and fees (if any); functions, usage and warranty; consumers’ rights as stipulated in Article 38.3 of the PCR Law 2023; the process for dealing with the return of products, goods or services or termination of the contract; and receiving and resolving claims.
If prior information is provided incompletely or incorrectly, the consumer has the right to unilaterally terminate the contract within 30 days from the date of the conclusion of the contract and the business entity/individual must reimburse the consumer for the amount paid in proportion to un-used products, goods or services within the timeframe stipulated in the PCR Law 2023.
Source: https://www.vilaf.com.vn/blog/legal-bulletin-august-2023/
