Analysis of the Amendments to the Consumer Protection Law in Honduras: Impact and Consequences for Users

Published on Nov 11, 2024

ernando Zúniga, lawyer at ARIAS Honduras and expert in Regulatory Law, shares the following article on the reforms introduced by Decree 75-2024 to Honduras' Consumer Protection Law in October 2024. These reforms focus on the telecommunications sector, promoting billing transparency, contract flexibility, and credit protection to strengthen consumer rights and improve industry standards. 

 

ANALYSIS OF THE AMENDMENTS TO THE CONSUMER PROTECTION LAW IN HONDURAS: IMPACT AND CONSEQUENCES FOR USERS 

In October 2024, a significant modification to the Consumer Protection Law was made with the approval of Legislative Decree 75-2024, introducing changes aimed specifically at the telecommunications sector. These amendments are designed to strengthen security and transparency in mobile, internet, and cable television services, addressing a users’ aged claim for greater protection of their rights in these areas. The new regulations aim to establish a framework to promote fairness in relationships between providers and consumers, especially in aspects like billing, contract flexibility, and safeguarding users' credit histories. 

Key Changes in the Law 

  1. Billing in Lempiras: From now on, Telecommunications companies must issue invoices in the local currency, lempiras. Previously, consumers had to make payments in dollars, which led to fluctuations in their bills due to exchange rate variations. 

  1. Greater Contract Flexibility: The law now regulates the minimum contract term, set at six months, allowing users to terminate the relationship without penalty if the service quality is deficient. Previously, users were often locked into long-term commitments and faced high penalties if the contract was early cancelled. This amendment removes those barriers, enabling consumers to exercise their right to choose quality services without being obliged to honor the agreed duration. This change not only enhances users' freedom of choice, but also fosters fair market competition, motivating companies to raise their service standards to retain customers. 

  1. Safeguarding Credit History: This amendment addresses issues related to credit reporting, which affects consumers who do not receive an adequate service quality. Previously, consumers who chose not to pay due to poor service could be reported as defaulters to the credit bureaus, negatively impacting their credit history and limiting their access to financing; with the new regulations, telecommunications companies cannot report to the credit bureaus if consumer can demonstrate that their non-payment was due to deficiencies in the service received. This protection will allow consumers to have greater control over their credit histories and commercial relationships. 

Importance and Consequences of the Amendments 

The implementation of these modifications is significant due to their direct impact on consumers. Each regulated aspect aims to establish fairer relationships between users and telecommunications service providers. 

Improvement in Service Quality: Contractual flexibility creates incentives for service providers to offer a better level of quality, as consumers are now allowed to cancel their contracts without penalties if the service received is deficient. This regulation promotes a culture of continuous improvement in telecommunications services and obliges companies to adapt to market demands. 

Protection of Credit History: Credit history protection recognizes consumers rights not to be penalized when non-payments are due to service failures. 

Conclusion: The reforms established by Legislative Decree 75-2024 represent a significant improvement for consolidating consumer rights in Honduras. By creating a renewed balance between consumers and providers, these reforms promote greater fairness and trust within the telecommunications sector. Through measures such as billing in local currency, contract flexibility, and credit history protection, consumer rights are better off together with high competition standards in the market. 

 

The information provided by ARIAS® is presented for informational purposes only. This information is not legal advice and is not intended to create, and does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking advice from professional advisers.