Issue of July 2024 – Decree No. 55/2024/ND-CP of the Government detailing a number of articles of the Law on Protection of Consumers’ Rights

Dear Valued Clients,

On May 16, 2024, the Government issued Decree No. 55/2024/ND-CP (“Decree 55”) detailing a number of articles of the Law on, Protection of Consumers’ Rights replacing Decree No. 99 /2011/ND-CP dated October 27, 2011 of the Government (“Decree 99”). Decree 55 is an important legal document protecting consumers’ rights that has a wide impact on many involving businesses, subjects, organizations and individuals, thereby creating a legal framework for providing responsibility of individuals and business organizations towards consumers. Decree 55 officially takes effect from July 1, 2024.

In this Legal Update, we would like to summarize and clarify the new points of Decree 55 that one should pay attention to.

1. Requirements for contracts concluded with consumers, contract forms, and general trading conditions

Previously, Decree 99 only sets general requirements for standard contracts and general transaction conditions with two basic groups of requirements: (i) the language used must be Vietnamese, the content must be clear and easy to understand; the font size must be at least 12, and (ii) the paper background and ink color used to display the content of the standard contract and general trading conditions must contrast with each other[1].

Compared to the above, and in addition to contract forms and general trading conditions, Decree 55 currently has expanded the scope of general requirements for all contracts concluded with consumers along with many new requirements. Accordingly, these requirements are more specific in terms of language, form, and content, and are also more flexible to suit the characteristics of electronic documents compared to traditional printed documents. Specifically, Article 6 of Decree 55 sets out the requirements for contracts concluded with consumers, contract forms, and general trading conditions as follows:

• The language used is Vietnamese; other languages may be used under agreements according to Clause 2 Article 23 of the Law on Protection of Consumers’ Rights No. 19/2023/QH15 dated June 20, 2023 (“LOPOCR 2023”);
• In the case of concluding paper contracts, the mandatory font size is 12 with Times New Roman font or equivalent sizes;
• The color of the letters and the color of the background shall contrast each other;
• The layout and design of the text shall be clear and easy to follow;
• Contents shall be clear, easy to follow, and in compliance with the law on the protection of consumers’ rights.

Additionally, Decree 55 also adds the responsibility to complete registration even before the consumer makes an advance payment or takes measures to ensure the fulfillment of obligations[2], specifically:

• Contract forms and general trading conditions shall only be used for conclusion with or application to consumers after the registration is completed according to Article 12.1 of Decree 55.
• If the consumer provides payments before the conclusion of contract forms and general trading conditions, makes a deposit or escrow, or implements security measures to fulfill other obligations concerning the conclusion of contract forms and general trading conditions, traders shall complete the registration and disclose contract forms and general trading conditions for the consumer’s acknowledgment of the contents of such documents according to regulations before the implementation of payments or the mentioned measures.

In addition, pursuant to the provisions of Article 12.2 and Article 7.3 of Decree 55, after completing registration procedures, traders shall disclose notifications of registration completion and contract forms and general trading conditions with completed registration by posting them up at an easy-to-notice position at their headquarters or trading locations and disclosing them on their web portals or software applications (if any) during the whole period of application of such contract forms and general trading conditions. At the same time, before January 31 every year, traders with contracts forms and general trading conditions included in the list of products, goods, and services subject to registration promulgated and amended by the Prime Minister of Vietnam shall submit reports on the registration and application of contract forms and general trading conditions registration authorities following Form No. 01 in the Appendix issued together with Decree 55.

Regarding the cancellation or modification of contract forms and general trading conditions, the state management agency responsible for consumer protection may, on its own initiative or at the request of consumers or social organizations involved in consumer protection, require businesses or individuals to cancel or modify all or part of the standard contract or general trading conditions whenever it is found that the contract forms or general trading conditions violate consumer protection laws. Accordingly, traders shall cooperate with consumer right protection authorities in making reports, providing information, and explaining the contents of standard form contracts and general trading conditions when requested by consumer right protection authorities.

Traders shall revise or remove the violating contents within 30 days after being requested by consumer right protection authorities. In complicated cases, the mentioned time may be extended by up to 90 days according to the decisions of consumer right protection authorities. Within 5 working days from the date of revision or removal of the mentioned violating contents, traders shall disclose contract forms and general trading conditions with revised or removed violating contents by posting them up at an easy-to-notice position at their headquarters or trading locations, disclosing them on their web portals or software applications (if any), notifying consumers with concluded contracts of the application of new general trading conditions and re-concluding contract forms if requested by consumers[3].

2. Disclosure and removal of warnings for consumers about transactions in cyberspace

Decree 55 introduces new regulations on the disclosure and removal of warnings for consumers about transactions in cyberspace[4]. Accordingly, the list of traders in cyberspace that commit violations against the law on the protection of consumers’ rights shall be disclosed on mass media and posted at the headquarters and web portals of ministries, ministerial agencies, and Provincial People’s Committees.

Disclosed contents include the following contents:

• Names and addresses of traders in cyberspace that commit violations against the law on the protection of consumers’ rights;
• Acts and locations of violations;
• Promulgating authorities and the number and date of decisions on the handling of violations against the law on the protection of consumers’ rights.

The duration of the disclosure of violating traders is 30 days from the disclosure date. After the mentioned duration, authorities that disclose the information shall suspend or remove the information on traders in cyberspace that commit violations against the law on the protection of consumers’ rights.

3. Measures for handling defective products and goods

According to Article 17 of Decree 55/2024/ND-CP, excluding cases where the law prescribes otherwise, within 24 hours after detecting defective products and/or goods or receiving requests from competent authorities, traders shall immediately carry out necessary measures to stop the supply of defective products and/or goods on the market. Traders shall assume responsibility before consumers and the law regarding any delay in stopping the supply of defective products and/or goods on the market.

After taking the necessary measures to stop the supply of defective products and goods on the market, within 3 working days for defective products and goods in Group A (products and goods that may cause harm to the life and health of consumers) or 5 working days for defective products and goods in Group B (products and goods that may cause damage to the property of consumers) from the time the defective products and goods are discovered or upon receiving a recall request from the competent state management agency, traders shall disclose information on defective products and goods and the recall of such products and goods according to Article 33.2 of the LOPOCR 2023. In cases where the law provides different timeframes for the disclose notifications of defective products and goods and their recall, traders must comply with the disclose notifications requirements within the timeframes specified by the other applicable laws[5].

Before carrying out and unless otherwise required by law, within 5 working days from the end of the recall of defective products and goods or from the date of receiving the request for reporting from the State management agency on protection of consumers’ rights and relevant State management agencies, business organizations and individuals must submit reports respectively according to Form No. 8 and Form No. 9 accompanying Decree 55 to the State management agency on protection of consumers’ rights and relevant State management agencies.

In addition, where the recall of defective products and goods is implemented in two or more provinces or centrally affiliated cities, traders shall submit reports on the recall to the consumer right protection authority of the Ministry of Industry and Trade of Vietnam and relevant central state management authorities for inspection and monitoring while submitting reports consumer right protection authorities and specialized authorities at the provincial level where the recall is implemented for such authorities to cooperate in inspecting and monitoring the local recall[6].

4. Procedure for exchange and return of products, goods, and remote transaction services

This is a new regulation in Article 22 of Decree 55 on the responsibilities of traders in remote transactions. Accordingly, traders providing information about the procedure for exchange and return of products, goods, and remote transaction services must have the following information:

• Specific time limit for consumers to carry out the replacement and/or return;
• Specific steps and time limit for implementing each step in the procedure;
• Contact information of the department in charge if consumers have feedback or complaints on the implementation of this procedure.

In case of providing information on the procedure for receiving and settling feedback, requests, and complaints from consumers, the following information shall be mandatory:

• Methods of receiving feedback, requests, and complaints from consumers;
• Specific steps and time limit for implementing each step in the procedure;
• Cases prioritized for receipt and settlement; Guidelines on necessary information and documents for the receipt and settlement (if any).

5. Responsibilities of organizations establishing and operating big digital platforms

Decree 55 has set forth specific criteria to identify major digital platforms as stipulated in the LOPOCR 2023. Accordingly, a digital platform serving electronic transactions, established and operated to support business activities in cyberspace, will be considered a big digital platform if it meets one of the following criteria[7]:

• Having at least 3.000.000 user accounts that operate annually in Vietnam according to the law on e-transactions. Traders shall determine the number of user accounts operating on their digital platforms;
• Being a big or very-big intermediary digital platform serving e-transactions according to the law on e-transactions.

According to the provisions of Article 23 of Decree 55, organizations establishing and operating large digital platforms are responsible for:

• Disclose criteria for determining the priority of the display of products, goods, and services if digital platforms have a search function. If the displayed content is paid or sponsored content, results of the search for products, goods, and services shall be re-disclosed. The development and disclosure of the applied criteria for determining the priority of the display of products, goods, and services if digital platforms have a search function shall comply with relevant laws;
• Maintain online reporting accounts and provide the following information and/or data, which is updated until requests for reports for inspections from competent state management authorities as prescribed by the law; and
• Provide the information and data prescribed in section (ii) via online methods to the web portals of consumer right protection authorities of the Ministry of Industry and Trade of Vietnam within 5 working days after receiving requests for reports, take responsibility for the accuracy and integrity of the provided information and data, and comply with the law on the protection of consumers’ rights regarding such information and data.

As usual, we hope you find this Legal Update helpful and look forward to working with you in the upcoming time.

Kind regards,

ENT Law LLC

The full version of this Legal Update can be found here.

[1] Article 7 of Decree 99.

[2] Article 7.2 of Decree 55.

[3] Article 15 of Decree 55.

[4] Article 24 of Decree 55.

[5] Article 18 of Decree 55.

[6] Article 19 of Decree 55.

[7] Article 2.2 of Decree 55.