A prohibition has been introduced on the inclusion in the contract of conditions that infringe on the rights of consumers, and a prohibition on the unreasonable collection of a consumer's personal data

Pepeliaev Group advises that on 1 May 2022, the President of the Russian Federation signed the Law [1] amending article 16 of the Law of the Russian Federation "On the Protection of Consumers' Rights”.

In legal relationships with suppliers of goods and services, consumers, as a rule, are the weaker party to the contract: they do not take part in the formation of its terms and conditions and cannot affect its content.

The terms and conditions of the contract are determined unilaterally by commercial organisations. In this regard, there are cases when commercial organisations include terms and conditions in the contract that infringe on consumer rights. In addition, under the threat of a refusal to conclude a contract, consumers are often forced to provide excessive personal data. To limit such unfair practices, the Law provides for the following provisions.

Voidness of contractual terms that infringe on consumer rights

According to the Law, unacceptable terms of the contract that infringe on consumer rights are conditions that violate the rules established by international treaties of the Russian Federation, the Law of the Russian Federation "On the Protection of Consumers' Rights", as well as other acts governing relations in the field of consumer rights protection. The law establishes that such conditions are void, and the consumer is entitled to make a claim for the reimbursement of losses owing to the inclusion of such conditions in the contract.

Determining the list of inadmissible terms of a contract that infringe on consumer rights

The law provides that unacceptable terms of a contract that infringe on consumer rights include, but are not limited to:

• conditions that grant the seller (manufacturer, contractor, authorised organisation or authorised individual entrepreneur, importer, owner of an aggregator) the right to unilaterally refuse to fulfil the obligation or unilaterally change the conditions of an obligation (the subject matter, price, term and other conditions agreed with the consumer), except if the law or another regulation of the Russian Federation provides for the possibility of granting such right by the contract;
• conditions that limit the consumer's right to freely choose the territorial jurisdiction of disputes in accordance with the Law of the Russian Federation "On the Protection of Consumers' Rights";
• conditions that exclude or limit the liability of the seller (manufacturer, contractor, authorised organisation or authorised individual entrepreneur, importer, owner of an aggregator) for the non-fulfilment or improper fulfilment of obligations on grounds not provided for by law;
• conditions that provide for the performance of additional work (the provision of additional services) for a fee without obtaining the consent of the consumer; and
• other cases provided for by the Law.

Deadline for consideration of a request to exclude unacceptable conditions from a contract

If the consumer submits a request to exclude unacceptable terms and conditions from a contract that infringe on a consumer's rights, the specified request shall be considered within ten days from the date of its presentation with a mandatory notification to the consumer about the results of the consideration and a reasoned decision on the merits of the demand.

Prohibition on the unreasonable collection of a consumer's personal data

The law establishes a prohibition on forcing a consumer, under the threat of a refusal to make a transaction, to provide personal data in cases where the provision of such data is not provided for by law and is not related to the completion of a transaction for the sale of goods (works, services).

The consumer has the right to demand information on the specific reasons and legal grounds which determine that it is impossible to conclude a transaction without providing them with personal data.

The seller (contractor, owner of an aggregator) must provide the requested information within seven days from the date of the consumer's request in writing. If the claim was presented orally by the consumer, then such information should be provided to the consumer immediately.

What to think about and what to do

The law comes into force on 1 September 2022. However, the provisions establishing the list of inadmissible terms and conditions of a contract that infringe on consumers' rights apply to relations arising from previously concluded contracts with consumers.

It is advisable for companies operating in the consumer market to take steps to bring their activities in line with the requirements of the Law, in particular, to stop the unreasonable collection of consumers' personal data, as well as to exclude from contracts unacceptable terms and conditions that infringe on consumers' rights, namely:

• conditions that grant the seller (manufacturer, contractor, authorised organisation or authorised individual entrepreneur, importer, owner of an aggregator) the right to unilaterally refuse to fulfil the obligation or unilaterally change the conditions of an obligation (the subject matter, price, term and other conditions agreed with the consumer), except if the law or another regulation of the Russian Federation provides for the possibility of granting such right by the contract;
• conditions that limit the consumer's right to freely choose the territorial jurisdiction of disputes in accordance with the Law of the Russian Federation "On the Protection of Consumers' Rights";
• conditions that exclude or limit the liability of the seller (manufacturer, contractor, authorised organisation or authorised individual entrepreneur, importer, owner of an aggregator) for the non-fulfilment or improper fulfilment of obligations on grounds not provided for by law;
• conditions that provide for the performance of additional work (the provision of additional services) for a fee without obtaining the consent of the consumer; and
• other cases provided for by the Law.

The timely identification and elimination of violations will help mitigate any legal risks, eventual additional expenses on eliminating the consequences, and avoid any reputational losses.

Help from your adviser

Pepeliaev Group’s lawyers constantly monitor changes in legislation in the fields of consumers' rights and personal data protection and have experience in comprehensive business support in relation to compliance with the law, identification, assessment and mitigation of legal risks.

Pepeliaev Group provides the following types of services:

• advising on compliance with consumer protection legislation and personal data;
• auditing rules for the sale of goods, the provision of services and loyalty programs for compliance with the law;
• drawing up documentation regulating personal data processing;
• conducting a comprehensive audit to check whether the implemented organisational and technical measures to protect personal data comply with legislation;
• representing companies in dealings with state authorities and in courts in disputes related to the protection of consumer rights and the processing of personal data;
• offering a digital service for simplifying the updating of the list of persons who have access to personal data.

[1] Federal Law No. 135-FZ “On amending article 16 of the Russian law ‘On the protection of consumers' rights’” dated 1 May 2022.