Guatemala: Towards a New Consumer Protection Law

Our lawyers in Guatemala, experts in Commercial Law and Consumer Protection, share this article on the main innovations incorporated in Bill No. 5082 that proposes to issue a new consumer protection law.

On February 15th, 2024, the Congress of the Republic approved in third reading the bill for a new consumer protection law (hereinafter, the “Bill”). If approved, this initiative would repeal the current regulations on this subject and introduce different provisions aimed at protecting consumer rights. The law in force today (Law for the Protection of Consumers and Users) dates back to 2003 and does not contemplate different trade phenomena that have arisen in recent years.

Among the main provisions contemplated in this Bill are:

• It creates an autonomous and decentralized entity in charge of ensuring its application and compliance, this entity will be called the Office of the Attorney for the Defense and Protection of Consumers and Users (PRODECO, by its acronym in Spanish).
• It clearly demarcates its scope of application, stipulating that it extends to regulated sectors, where it will apply if the regulations of the sector or subsector in question do not contemplate rules in this regard and, even if they do, it empowers PRODECO to intervene if the corresponding regulatory body does not intervene.
• It generally prohibits bullying or harassment for collections, practices that were prohibited only in the financial field.
• It establishes special rules for the financial services and real estate development sectors, as well as for e-commerce, incorporating in the latter area, the first rules of general application on the protection of personal data as far as commercial transactions are concerned.
• It specifically regulates product repair services, establishing, among others, the obligation of the supplier to establish a term for the provision of the service, to test the product at the time of returning it to the consumer or user, and to grant a warranty.
• It also includes special provisions for public service providers, such as that an error in billing is presumed if, in a given billing period, more than 50% of the average effective consumption of the user in the last 12 months is billed, as well as the duty to compensate the user, in case he has been unduly charged, giving him an amount equal to the amount unduly charged.
• It establishes design and format obligations for adhesion contracts and, in addition, establishes an administrative procedure before PRODECO as the means of resolving disputes arising from this type of contract, unless arbitration has been agreed, in which case the provisions contained in the Bill must be observed.
• It establishes an open system of sanctions, leaving to the regulations of the law, which must be issued by the PRODECO Prosecutor, the power to set fines, without the law establishing any parameters or limits.

If passed, this law will represent a momentous change in consumer relations in the country, imposing many more obligations on suppliers, as well as establishing a surveillance and inspection system that seeks to be stronger.

The Bill must still be approved by articles and final drafting, at which time it will be considered issued by the Congress of the Republic. Subsequently, it must be sanctioned by the President of the Republic so that it can be published and take effect as a law of the Republic.

Stay tuned to our legal news communication channels to learn about any progress in the passage of this Bill. If you have any comments or questions regarding this subject, please do not hesitate to contact us.

Author:
Luis Pedro del Valle - Partner, Guatemala.
luispedro.delvalle@ariaslaw.com
Marco Tulio León - Associate, Guatemala.
marcotulio.leon@ariaslaw.com

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.