Consumer Protection Law published in the Official Gazette

The regulation containing amendments to Law No. 7529 on the Protection of Consumers and certain other laws has been published in the Official Gazette and has entered into force.

WHAT DOES THE LAW INCLUDE?

According to the law, the formal requirements for contracts between lenders and consumers under the Law on the Protection of Consumers are being reorganized to allow for their establishment via methods that include identity verification through an information or electronic communication device. Accordingly, a consumer credit agreement will not be valid unless it is established in writing or remotely.

Considering the regulation allowing consumer credit agreements to be established remotely via distance communication tools, a regulation is being introduced to allow other transactions related to the contract to be performed remotely in an electronic environment via a permanent data storage device. Accordingly, the account related to a fixed-term credit agreement will be closed upon the repayment of the credit, unless the consumer has a contrary request in writing or via a permanent data storage device.

The same provisions will also apply to contracts between housing finance institutions and consumers.

With the law, direct sales systems are defined as "a sales system where direct sellers, who are not employed by a direct sales company through an employment contract and who operate under names such as independent representative, distributor, consultant, and similar, in exchange for benefits such as commissions, premiums, incentives, and rewards, market goods or services to consumers." It will be mandatory for the direct sales company to be a capital company and to meet other conditions determined by regulation.

The direct sales system must not be based on the distribution of benefits arising from the recruitment of new direct sellers to the system, but rather on the sale of goods or services to consumers, and must comply with other principles determined by regulation. Direct sellers cannot be charged any fees or be placed under any debt under names such as renewal, package, fee, dues, and similar, which do not include the goods or services intended for sale to the consumer, for joining or remaining in the system.

The purchase of goods or services in an amount or quantity determined by the direct sales company will not be able to determine the direct seller's level within the system. A consumer who purchases goods or services within the scope of a direct sales system will have the right to withdraw from the contract within 30 days without providing any justification and without paying any penalty. It will be sufficient for the notification regarding the exercise of the right of withdrawal to be directed to the direct seller or the direct sales company within this period.

The direct sales company will be obliged to establish a system that ensures the consumer is informed on matters determined by the Ministry of Trade and can transmit their requests and notifications. This regulation will enter into force 9 months after the publication of the law.

PENALTIES FOR UNFAIR COMMERCIAL PRACTICES ARE INCREASED

A regulation has been made to increase deterrence and effectively protect consumers, as the fixed administrative fines for advertising and unfair commercial practices were deemed insufficient.

For those acting in violation of the obligations contained in the provision on unfair commercial practices, sanctions of "suspension of the unfair commercial practice for up to 3 months" or "precautionary suspension" or an "administrative fine from 60 thousand Turkish liras to 600 thousand Turkish liras" will be applied.

If the violation has occurred nationwide, the administrative fine will be applied from 600 thousand Turkish liras to 6 million Turkish liras.

In the event that all kinds of information and documents are not correctly shown to the authorized and tasked persons or institutions during inspections, a warning will be issued to provide the correct information and documents or to provide the opportunity for on-site inspection within 7 days. If the violation continues despite the warning, an administrative fine of one percent of the annual gross income generated at the end of the fiscal year preceding the date of the violation, not less than 80 thousand Turkish liras, will be imposed.

In cases where gross income is not reported or is reported incorrectly, an administrative fine of 6 million Turkish liras will be applied for prepaid housing sales, and 1 million Turkish liras for other sales.

The Advertising Board is granted the authority to impose administrative fines within these limits, taking into account factors such as the content of the injustice, the magnitude of the benefit obtained or the damage caused by the violation, and the fault and economic status of the person committing the violation.

PYRAMID SALES SYSTEMS

With the law, the relevant provisions of the Turkish Penal Code will be applied to those who initiate, organize, or disseminate a pyramid sales system through meetings, e-mail, or other methods suitable for ensuring the participation of many people, or who support the spread of such a system in any other way for commercial purposes, in violation of the pyramid sales system provision in the relevant law.

Furthermore, administrative fines to be imposed in cases where the direct sales company is not a capital company, the direct sales system is not based on the sale of goods or services to consumers but rather on the recruitment of new sellers, or a system to ensure consumer information is not established, are determined. This regulation will enter into force 9 months after the publication of the law.

With the regulation, a settlement opportunity is also granted to the parties regarding administrative fines imposed by the Advertising Board.

In this way, considering the public costs that would be caused by litigation processes regarding administrative actions arising from violations of provisions on commercial advertising and unfair commercial practices, and the public benefits to be obtained by ending the violation and the process quickly and definitively, the settlement institution currently applied in case of violation of other provisions of the law is also made applicable to provisions regarding commercial advertising and unfair commercial practices. Equality is ensured in terms of settlement opportunities for natural or legal persons subject to the penalty.

PROVISIONS REGARDING ELECTRONIC COMMERCE

With the amendment made to the Law on the Regulation of Electronic Commerce, in order to encourage high-technology investments as well as cross-border electronic commerce activities of electronic commerce intermediary service providers that facilitate businesses in delivering their products to foreign markets, the total of sales made abroad through marketplaces and investment expenditures realized with an investment incentive certificate from the Ministry of Industry and Technology will be deducted from the net transaction volume that forms the basis for the calculation of the license fee.

In order to benefit from the discount opportunity granted by the regulation made to protect the fair competition environment and the multi-player structure of the sector, a condition has been introduced that the net transaction volume of the electronic commerce intermediary service provider must not exceed 20 percent of the electronic commerce volume, which expresses the total net transaction volume of electronic commerce intermediary service providers and electronic commerce service providers within the scope of the law and is calculated by the Ministry using Electronic Commerce Information System (ETBİS) data.

To be applied in the calculation of the license fee for the year 2024, 4 times the total of sales made abroad through marketplaces by the electronic commerce intermediary service provider and investment expenditures realized by obtaining an investment incentive certificate will be deducted from the net transaction volume, and 3 times said sales and expenditures will be deducted in the calculation of the license fee for the year 2025.

These provisions will enter into force on the date of publication, effective for the accounting period starting in 2024 for taxpayers assigned a special accounting period, starting from January 1, 2024.