The Serbian Parliament has just enacted a new Consumer Protection Law (the “Law”), which is to become applicable on 20 December 2021, following a three-month transitional period.
The key changes focus on ensuring better protection and enforcement of consumer’s rights in practice, by fine-tuning and tightening some of the provisions that already existed under the current law, while only a handful of real novelties have been introduced. The scope of the changes made was perhaps better fitted for a partial amendment of the existing law, rather than for enacting a completely new one, as most of the existing provisions were simply copied into the new Law. That being said, some of these changes may have a more significant impact on the day-to-day activities of consumer-oriented companies, as summarized below.
To address the key problematics in applying the existing law, namely the lack of effective dispute resolution mechanisms and inefficiency of misdemeanour prosecution for violations, the following solutions have been implemented into the Law:
- As opposed to the current law, the companies will be required to engage in an out-of-court resolution of consumer disputes, if the consumer decides to initiate such a procedure. Moreover, the consumers must be clearly and visibly informed about this company’s requirement at any point of sale. This procedure will be conducted before an impartial dispute resolution body, free of charge, and may be completed by reaching a settlement between the parties or (in its absence) by the body’s non-binding recommendation on how to resolve the dispute. Although the company’s mandatory participation may improve the consumer’s chances of resolving the dispute without going to court, the companies are still entitled to take an entirely passive position in this process and simply wear out the consumer, and therefore it is questionable if this change will bring any tangible results in practice.
- The statute of limitations for the authorities to initiate a misdemeanour proceeding against the company has been increased to two years, as the current one-year deadline often enabled the companies to avoid being prosecuted at all.
- For many violations, the trade inspectors have been provided with an option to directly impose fines to companies on the spot, by issuing the so-called misdemeanour orders, instead of initiating the misdemeanour proceedings to the court. Although these fines are relatively small – EUR 425 or, if paid within eight days, only half of that amount – the threat of being directly and quickly fined should work wonders for pushing companies towards compliance.
- Consumers have now been relived from paying not only the court fees for filing a claim before the court (as was the case so far) but also the court fees for the rendered judgment, which should further encourage them to bring the companies to court whenever their complaints have not otherwise been addressed.
On the other hand, the Law has also introduced a couple of new solutions, the key one being the implementation of the so-called Do Not Call Registry. This is a public registry of consumers who declared themselves as unwilling to receive telemarketing calls or messages on their designated phone numbers, which the companies would need to check before contacting the consumers. This register will be maintained by RATEL, the electronic communications watchdog, while the registration requests will be submitted by consumers to their own electronic communications providers, free of charge.
Although the initial draft of the Law indicated that consumers would also be able to register whether all their previously provided direct marketing consents have been withdrawn, or are still active, the last-minute amendments made by the Government removed this wording and added that any such prior consent would need to be withdrawn individually, by notifying each relevant company. Such a concession significantly limits the practical effects of this registry, since the companies are anyway permitted to contact only those consumers who have provided their consent in the first place, and is likely a major lobbying success for Serbian telcos engaged in the public consultation on the draft.
In addition, the traders offering services to consumers will now have to prepare an estimate of the service cost price for each service of value greater than RSD 5,000 (approx. EUR 40) and receive written consent from the consumer to such an estimate, before providing the service (which will mostly affect manual workers).
Finally, the most extensive novelty relates to a comprehensive regulation of travel services and related consumers’ rights when booking package holidays, such as in terms of cancellation, liability, and refunds, aimed at achieving harmonization with the relevant EU Package Travel Directive 2015/2302.
It is safe to say we are not witnessing any major reform in Serbian consumer protection, which is a bit disappointing, as we are still missing some of the crucial mechanisms available in western countries. The one most eagerly anticipated is the class-action lawsuit – the option for consumers to sue a company on behalf of themselves and others aggrieved by the same wrongful conduct, which has been scaring the companies in both the US and most EU member states for a long time now.
Until this and similar breakthroughs arrive, the Serbian consumer protection framework and culture will likely improve in small steps every couple of years. Of course, slow progress is still better than no progress, but the ultimate goal – a well-rounded consumer protection environment – seems to remain much further away than it should have been at this point.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.