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El Salvador: increased consumer protection

Thursday, March 21, 2013

Salvadoran cconsumers have a higher level of protection, following the entry into force last month, of amendments to the Consumer Protection Act.

Among the new rules is the prohibition for the seller of a product or service, to charge hidden amounts, typically called commissions for the granting of financing or credit.

Contracts cannot renew automatically, on the contrary, consumers have to confirm in writing, as to whether or not they want to continue or not with the service.

Other standards are intended to reduce the impact of misleading advertising, including the obligation to honor guarantees applicable in the case of the purchase of property.

The new rules include a right of withdrawal, giving the buyer a period of eight days to cancel a contract.

An important change has to do with the consumer's right to force the seller to refund money already paid, in the case of a claim approved by the Consumer Ombudsman.

Under the previous regime, the Ombudsman only had the power to fine the trade, which did not help the consumer directly.

Given these changes to consumer sales practices, companies need to prepare and adapt to these new rules, in order to avoid claims and fines.

For more information, please contact Luis Vega at [email protected], or (503) 2209-1600.