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Car owner rights in new Consumer Protection Law - Daily News Egypt

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Car owner rights in new Consumer Protection Law

System tightens penalties to reach life imprisonment

The Egyptian Parliament is seeking to adopt the new Consumer Protection Law in the coming days. This came after several discussions and amendments that lasted for about a year and a half.

Daily News Egypt publishes the most important articles and chapters related to the automobile sector, such as guaranteeing consumer rights when buying a new car, performing maintenance or returning cars, and buying used cars.

The law includes expanding the powers of the Consumer Protection Agency (CPA) and transferring its subordination to the cabinet instead of the Ministry of Supply.

Penalties for the violators have been broadened. Financial penalties range from EGP 500,000- 2m, in case of serious damage, or double the value of the product.

In the case of a consumer’s death resulting from mechanical errors in the car, the penalty is life imprisonment.

According to article l of the tariffs section, used goods such as cars are among the goods that citizens’ rights must be preserved when buying.

Apply standard specifications to the product

Article 3 of the law obliges all suppliers, including car companies, factories, importers, dealers, and service centres to apply the rules of health and safety and quality standards in accordance with the Egyptian standard specifications.

In case of non-existent Egyptian standards, international standards approved in Egypt will be met and whoever violates them will be punished with a fine of no less than EGP 10,000 and no more than EGP 500,000.

Product price announcement

Additionally, the law obliges car companies, agents, distributors, and dealers to present prices of goods and services provided and aftersales services clearly to consumers. Prices must include taxes and any other financial fees in accordance with regulations.

The CPA may determine the prices of goods and services after reference to the cabinet. Anyone who violates this shall be punished by a fine of no less than EGP 10,000 and no more than EGP 500,000.

Fighting queues and deception

Article 8 discusses car waiting lists and the so-called overpricing phenomenon.

According to the law, it is forbidden to conceal strategic products that are ready for sale, by hiding or refraining from selling them. The prime minister is to issue a decision on this matter, after consulting with the CPA to identify strategic products for a specified period of time.

According to Ashraf Adel, central department of car complaints head at the CPA, the authority included automobiles as strategic goods. Whoever violates any of the previously mentioned laws will be punished by imprisonment for a period not less than two years and not exceeding five years.

Article 9 supplemented the eighth article to counter the deceptive behaviour applied by a number of car dealers. Deceptive behaviour includes misleading advertisements, unrealistic discounts, and manipulating car prices. All of that will lead to waiting lists which is forbidden. Violators will be punished with a fine not less than EGP 50,000 and not more than EGP 2m.

Organizing car sales and booking

Articles 10, 11, and 12 of the Consumer Protection Law obliges suppliers to submit an invoice proving the handling or contracting of the product. The invoice should include the status, characteristics, nature, and type of the vehicle.

In case of agreement on booking the vehicle, the customer shall receive a receipt stating the characteristics of the vehicle and its specifications and price determination.

Whoever violates this shall be punished by a fine not less than EGP 30,000 and not more than EGP 1m or double the price of the car.

Combating misleading advertising

Article 14 of the law states that competition cannot be declared by any means except on the basis of a license issued by the CPA, five days prior to the announcement date. In case of non-issuance of licenses during this period, CPA approval regarding the advertising should be considered. The CPA has the right to reject the competition or advertisement.

Imprisonment for a period not less than one year and a fine not less than EGP 100,000 and not more than EGP 2m, or equivalent value of the goods that are the subject of the violation, whichever is greater.

Article 72 of the law supplemented Article 14 giving the CPA the right to ask suppliers and advertisers to correct or modify deceptive advertisements. If they refrain from making the correction within three days from the date of the request or the illegal advertising, the CPA has the right to halt the advertisement for a period that does not exceed seven days, and in this case, release a record to prove its actions and their justifications, and refer the case to the concerned prosecution.

The violator shall be punished with a fine of no less than EGP 50,000 and no more than EGP 1m or a value agreed with the advertising company that produced the misleading advertisement, whichever is greater.

Replacements and recovery operations

Article 18 states that the supplier shall be required to prepare a statement containing the rights of the consumer in the replacement and recovery approved by the CPA and provided for in the law and its executive regulations in a conspicuous place in display areas and areas where sale of the products occurs. The CPA can ban conditions stipulating that consumers must buy certain quantities of products or link sales to the purchase of other products, and violators will be punished by a fine of no less than EGP 10,000 and no more than EGP 500,000 or the equivalent value of the product.

The recovery period shall be increased to 30 days instead of 14 days. Whoever violates this shall be punished by a fine of no less than EGP 30,000 and no more than EGP 1m or payment of double the value of the car to the consumer.

Organise faulty car recalls

The new law, through its article 19, requires suppliers, within a period not exceeding seven working days since its discovery or knowledge of a defect in a product, to inform the CPA of such defect and its potential damages.

If the defect results in damage to the health and safety of consumers, the supplier shall commit to inform the authority of this defect immediately after discovery or knowledge.

Suppliers shall withdraw the product from the market immediately, announce that they will stop dealing it and warning customers not to use the product. Of these conditions, suppliers are obliged to repair the defect, replace the product, or return it with a refund at no extra cost.

Manufacturers, importers, or traders cannot resume the production or handling of the product unless with the approval of the authority. Otherwise, the case shall be referred to the CPA based on a technical report from an accredited body.

Anyone who contravenes this article shall be punished by imprisonment and a fine of not less than EGP 50,000 and not more than EGP 2m or the equivalent of the value of the goods that are the subject of the crime, whichever is greater, or one of these two penalties.

Organisation of after sales operations

Article 33 obliges service and maintenance centres to inform consumers of the maintenance and repair work required for the vehicle and the period of repair and its cost. They must obtain the explicit approval of the consumer on these works prior to its execution.

The centres must also undertake issuing an invoice to the consumer indicating the maintenance works and the replacement parts of the product at the service centre.

The centres also guarantee the safety of the product within the scope of repair services, in accordance with the nature of the service and the terms of the contract or the minimum security limits specified by executive regulations.

Whoever violates this shall be punished by a fine of no less than EGP 30,000 and not more than EGP 1m or pay double the value of the car to the consumer, and a court may close the service or maintenance centre in violation for a period of no more than six months.

Article 34 obliges each supplier, dealer, and distributor to provide services, maintenance, repairs, and original or certified parts that are imported or domestically produced.

Suppliers are obliged to notify the authority of approved service and maintenance centres and any changes thereto as determined by executive regulations.

Consumer rights when dealing with the used cars

Article 35 states that in the case of the sale of used vehicles, suppliers shall submit a technical report on the condition of the vehicles and their defects, issued by a licensed service centre. Unless otherwise agreed, suppliers and service centres must issue the report and are legally responsible for it.

If either party conceals substantial data that affects the purchase price, the completion of the sale, or the failure to include such data in the examination report due to gross negligence by either party, this shall be punished by a fine of no less than EGP 10,000 and no more than EGP 500,000, or the equivalent value of the product.

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