-
Federal Law on Medicinal Products
and Medical Devices of December 15, 2001
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Federal Law on Food and Utility
Articles of October 9, 1992
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Federal Law on Product Liability of
June 18, 1993
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Federal Law on Consumer Credits of
March 23, 2001
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Federal Law on Consumer Information
of October 5, 1990
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Federal Law on Package Tours of
June 18, 1993
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Ordinance on Publication of Price
of December 11, 1978
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Code of Obligations of March 30,
1911
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Federal Banking Act of November 8,
1934
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Federal Law on Legal Venue of March
24, 2000
(for a complete list of any Swiss laws and regulations in the area of
consumer protection, please see
www.konsum.admin.ch)
1. Introduction
The laws and regulations related to consumer protection cover a variety of
different aspects. Due to the recent initiative of the legislative power certain
statutes are under revision and may be passed in the following months. With the
planned introduction of the proposed Federal Law on Information and Protection
of Consumer the missing coordination between the different laws and regulations
shall be eliminated. This bill also includes detailed new regulations on
consumer information and product testing. Additionally, the bill includes the
necessary update on the market developments, a system of alternative dispute
resolution and the strengthening of the consumer organization. If the bill
passes the existing Federal Law on Consumer Information, the Ordinance on
Publication of Price would be obsolete. The informal hearing of the interested
parties and organizations has been finalized on July 15, 2004. Currently, it is
not known if the bill will be revised due to the feedback received during the
informal hearing. Currently, the Federal Office of Justice prepares a new bill
related to ecommerce which shall amend of the Code of Obligation and the Federal
Law on Unfair Competition.
Due to these expected changes of the applicable laws and regulations on
consumer protection, the following remarks are focused on the Federal Law on
Consumer Credit, which is the most relevant applicable statute on safeguarding
consumer’s interest. All credits granted by a creditor in the course of his
business to consumers are governed by this Statute, if the purpose of the credit
is not regarded as business or professional related. The Statute also applies to
for leases and as well as credit cards where the consumer has the right to pay
the outstanding balance in installments. The Statute only applies if the amounts
involving the credit agreement may not less than CHF 500.- and not more than CHF
80’000.-. Thus, credits granted by the employer or craftsman do not fall into
the category of consumer credits because there are not granted on a commercial
basis. Excluded from the application of the provisions of the Statute are credit
agreements secured by ordinary bank warranty or for which the consumer has
deposited with the creditor money or assets providing cover for the credit. The
creditor has to review the creditworthiness of the consumer before the closing
of the credit agreement. If not, the creditor may loose the amount of the credit,
interest and the cost. The Statute defines the required information included in
a credit agreement. Additionally, credit agreement must be in written form. The
Federal Council determines the maximum interest for credit agreements.
2. Federal Law on Consumer Credit
a. Introduction and scope
The provisions of the Code of Obligations related installment sale financing
and the cantonal rules of the certain Cantons related to consumer credits have
been lifted with the new Federal Law on Consumer Credit. There were several
significant changes for the provision. Credits are only subject to this Statute
if the creditor grants credits on a commercial and professional basis. Credits
granted for the acquisition of real estate, other rights on real estates or
buildings or for the improving of existing building are now subject to the
regulations of the Statute unless the credit is sufficient secured by a mortgage.
As previously mentioned, excluded from the application of the provisions of the
Statute are credit agreements secured by ordinary bank warranty or for which the
consumer has deposited with the creditor money or assets providing cover for the
credit. The Statute is not applicable if the creditor does not charge any fees
or interest for the credit. Excluded from the application of the provisions of
this Statute are credits extended from less than a 3 months period or which must
be repaid in up to 4 installments whereby the repayment must be done within 12
months. The reach of the Statute has increased from applying to all loans
between CHF 350.- to 40’000.- to CHF 500.- to CHF 80’000.-. Although the Statute
does not impose maximum contractual term anymore, the creditor is required to
assess the amortization of the credit within 36 months as part of its review of
the creditworthiness regardless of the term of the credit agreement.
b. Cash credit and credit agreements for financing goods or services
The credit agreements must be in writing and the consumer must receive a copy
of the contract. The Statute requires that the contract includes the amount of
the credit, the effective annual interest rate plus any additional cost, the
conditions related to the calculation of the adjustment of the interest rates,
if any, the total cost of the credit arrangement, the terms and condition
related to repayment and early repayment, the right of withdrawal within the
seven-day period, and the quota of the consumer’s income subject to execution in
a bankruptcy procedure.
The credit agreements for financing goods or services must include the
following additional information: The description of the goods or services, the
price for cash payment and the total price paid due to the credit arrangement,
the down payment, the installments, the owner of the goods if the legal title is
not immediately passed to the consumer, and additional information related to
insurance policies (if requested).
In case of unsatisfactory performance an agreement relating of the
acquisition of goods or services, the consumer entering into a credit agreement
with someone other than the supplier of goods or services may exercise all
rights against the creditor which the consumer would have in an agreement with
the supplier if (i) there is an agreement between the creditor and the supplier,
(ii) the credit has been granted due to an agreement, (iii) the goods or
services are not delivered (or only partly) or are not in accordance with the
contract, and (iv) the consumer did not successfully exercise his rights against
the supplier and the value involved exceeds CHF 500.-.
c. Leasing Agreements
In accordance with the requirements for credit agreements, leasing agreements
are only subject to this Statute if the lessor enters into leasing agreements on
a commercial and professional basis. The leasing agreement must be done for
tangible property used for the private use of the lessee only. The same
financial limits as outlined in the section related to credit agreements also
apply for leasing agreements.
Following the systematic of the Statute the contract must be in writing and
include certain information: description of the leasing goods, price of cash
payment, the installments, deposit (if applicable), additional information
related to insurance policies (if requested), effective annual interest rate,
the right of withdrawal within the sevenday period, a table indicated the value
of the goods by early termination at a certain time, the elements of the review
of the creditworthiness for the lessee.
The lessee has the same rights related to unsatisfactory performance similar
to the creditor in a credit agreement related to the acquisition of goods or
services.
d. Overdraft facility by an account or by credit or customer card
An overdraft facility by an account falls into the scope of the Statute if
the general conditions are fulfilled. Credits and customer cards are subject of
this Statute only if the agreement between the issuer of the credit card and the
consumer includes a credit option. Such credit option enables the consumer to
pay the outstanding balance in installments. On the other side credit cards
where the outstanding balance must be settled within 30 days are not subject to
this Statute due to the fact that all credit agreements with term less than 30
days are expressly excluded.
The overdraft facility by an account must include the maximum credit line,
the annual interest rate and cost charged at the closing of the contract, the
conditions related to the calculation of the adjustment of the interest rate,
terms and procedure of termination and the elements of the review of the
creditworthiness
During the contractual term, the creditor is obligated to inform the consumer
about all changes related interest rate, and any other applicable costs. Should
an overdrawn account be tacitly accepted for longer than three months, the
creditor must inform the consumer about the annual interest rate and the cost
charged to the account of the consumer and all related changes to this
information.
e. Review of the creditworthiness
The provisions regarding the creditworthiness of the consumer are the core
element of this Statute. The purpose of the review of the creditworthiness aims
at preventing insolvency of consumer caused by credit agreements. The Statute
requires that the creditors establish an information office for consumer credit
responsible for data processing including archiving, access, collaboration with
third parties involved and data protection. Although the Information Office of
Consumer Credit is organized pursuant to private law, it is qualified as Federal
governmental agency and is supervised by the Federal Office of Justice.
Additionally, the strict rules regarding data protection and processing for
federal offices apply.
The access to the data is restricted to the creditors subject to this
Statute, and only, for fulfilling the obligations under this Statute. The
creditor has to notify the Information Office of consumer credits granted to
consumer. Additionally, the creditor has to inform the Information Office
outstanding installments if the outstanding amount is more than 10% of the net
credit amount or the net purchase price. In a leasing agreement, the creditor
has to provide the following information (i) the value of the leasing obligation,
(ii) the contractual period, and (iii) the monthly installments. Additionally,
the creditor has to inform the Information Office if three installments are
outstanding. In an Overdraft facility by an account or by credit or customer
card, the creditor has to inform the Information Office of the outstanding
amount if the consumer has used the credit option three times in a row and the
outstanding amount exceeds CHF 3000.- (the limit can be adjusted by the Federal
Council in accordance with the Swiss index on consumer prices).
According to Article 31, the creditor has to evaluate the creditworthiness
before the contract has been concluded. A consumer is considered not
creditworthy if the consumer cannot repay the credit without demanding the part
of the salary exempted from execution according to Article 93 of the Federal Law
on Debt Collection and Bankruptcy. The non-exempt part of the salary is
determined on the subsistence minimum in the domiciled country and shall include
(i) the effective rent paid by the debtor, (ii) the income tax calculated on the
basis of the taxation of source, and (iii) liabilities registered at the
Information Office. The evaluation of the creditworthiness must be evaluated on
a repayment of the consumer credit within 36 months even if the effective
contractual term is longer. In case of a leasing agreement, the same rules apply
except that the evaluation of the creditworthiness takes into account assets
owned by the lessee and used to secure the payment of the installments.
Regarding overdraft facility by an account or by credit or customer card, the
creditor has to evaluate the income and property indicated by the consumer. The
credit limit must be determined according to this information given by consumer
and the information received from the Information Office. If the creditor
receives information that the overall financial situation of the consumer has
worsened, a new evaluation of the creditworthiness is required.
The creditor can rely on information given by the consumer about his/her
financial situation except the information is obvious wrong or is different from
that received from the Information Office. If the creditor questions the
information given by the consumer, the creditor is required to verify the
accuracy with private or official documents, e.g. salary certificate.
f. Withdrawal, early repayment and default of the debtor
The debtor has the right to withdraw his offer or declaration of acceptance
within 7 days. The withdrawal must be in writing. The time period starts after
the consumer has received a copy of the signed contract.
The consumer has the right to repay the full outstanding amount under a
consumer credit agreement at any time. In such case, the debtor is entitled to
get a release of interest payments and accurate reduction of the charges related
to the unused time period of the contract. In a leasing agreement, the lessee
can terminate the agreement by giving notice 30 days before the end of a three
months leasing period. The outstanding claim of the lessor is calculated
according to Article 11 para. 2 lit. g.
If the unpaid installments exceed 10% of the net credit amount or net
purchase price or three monthly installments in a leasing agreement, the
creditor is entitled to withdraw from the contract.
g. Sanctions
If the creditor violates his obligation to evaluate the creditworthiness
seriously, the creditor loses the credit amount, interest and charges. The
consumer is entitled to claim the repayments of the payments already done. If
the violation of the creditor is qualified as minor, the creditor loses the
interest and charges for the credit agreement.
3. Federal Law on Legal Venue
Legal venue of actions related to consumer agreements must be filed at the
domicile of the consumer whereby the consumer has the additional choice to file
an action at the domicile of the supplier. A choice-of-forum agreement with a
consumer can be only agreed after the dispute occurred. Waiving the statutory
legal venue of a consumer by entering an appearance is not allowed.
4. Federal Law on Package Tours
The Federal Law on Package Tours regulates travel arrangements having either
a duration of at least 24 hours or one overnight stay. Additionally, it is
required that the arrangement includes at least two of the following elements:
(i) transportation, (ii) accommodation or (iii) other tourist services. All
information given in a travel brochure is binding and cannot be changed
afterwards except the parties agree or the right to do so is expressly reserved.
The travel promoter or agent must inform the consumer about all relevant terms
and conditions of the travel agreement in writing. The Statute defines the
required information to be included in the travel agreement. Contractual agreed
prices can only be changed if a reservation has been made and the calculation of
the adjustment of the prices has been included in the contract. Change of prices
is limited to increase of the cost of transportation (included fuel), charges
for certain services, and fluctuation of the exchange rate. In case of
substantial adjustments of the contract prior to the travel, the consumer has
the right to accept it or to withdraw. In case of withdrawal by the consumer,
the consumer has the right to get an equivalent or better travel arrangement
without additional cost, a travel arrangement of lesser quality including the
repayment of the price difference or full repayment of the money paid. In case
of unsatisfactory performance by the travel service, the consumer has to notify
the travel promoter immediately in writing or the local agent. If the
unsatisfactory performance cannot be adjusted, the travel promoter is required
to either to take appropriate steps or to pay damages.
5. Various
The Code of Obligations includes certain provisions related to safeguarding
consumer’s interest. The recipient of products not ordered but sent to
recipient’s address has no obligation to send the product back or to store it.
In a door-to-door selling, the consumer has the right to withdraw his offer to
contract or his declaration of acceptance if the offer was made in his home or
working place, in public transportation or public areas, or by promotional
events linked to an excursion. The mandate to broker a marriage or partnership
was recently revised. Articles 406a ss. of the Code of Obligations defines that
agents are subject to authorization and supervision by the authority designated
by the cantonal laws. The contract between the agent and the principal must be
in writing and has to include certain minimum content. The contract enters into
force seven days after both parties have signed it. Within this period, the
principal may declare his withdrawal form the contract in writing to the agent.
Prior to the expiration of this seven-day period the agent may not accept any
payments. Regarding the processing of personal data, the agent is bound to
secrecy and the provisions of the Federal Act on Data Protection. If excessive
remuneration or charges have been stipulated, the court may, upon request of the
principal, reduce them to an appropriate amount.
Frequently
asked questions
Where can I find information related to consumer protection?
A list of consumer organization can be found under
www.konsum.admin.ch.
Most of the consumer organizations offer various publications and hotlines
related to all aspects of consumer protection. The most well known organizations
are the kf Konsumentenforum and the SKS Stiftung für Konsumentenschutz.
What is the function of the “Preisüberwacher” (Supervisor of Prices)?
The duty of the supervisor of prices is the observation of the general trend
in prices, preventing abusive increases of prices related to a lack of
competition in the market, and the orientation of the public related to his
activities.
Useful links
www.beobachter.ch
http://europa.eu.int/comm/consumers/index_en.htm
www.kassensturz.ch
www.konsum.ch
www.konsum.admin.ch
www.konsumentenschutz.ch
www.preisueberwacher.ch
www.swissmedic.ch
www.weko.ch
April 2006
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