Consumer Protection Law: An Introductory Overview

Prior to the Consumer Protection Law, contract cancellation, obtaining compensation, and consumer issues were handled under the Sale of Go...

Consumer Protection Law: An Introductory Overview
This article was translated using AI technology. While efforts were made to ensure accuracy, some nuances may vary from the original.

This article was translated using AI technology.

The Background to the Enactment of the Consumer Protection Law and Further Information Regarding Contract Cancellation

Prior to the Consumer Protection Law, contract cancellation, obtaining compensation, and consumer issues were handled under the Sale of Goods Law, 1968.

Consumer Protection Law: Why It Was Needed

This law defined transaction boundaries. It covered cancellations and breach compensation. However, it lacked consumer provisions. Consumer transactions need separate rules.

Addressing Power Imbalances

The Sale of Goods Law missed key aspects. It didn’t address power imbalances. Businesses often held more power than consumers. Technology and globalization changed transactions. Online orders needed a specific response. Exploiting distress also required a solution.

Public Outcry: Knesset’s Response

The Knesset felt this need after public outcry. Consumers strongly complained about business abuses. They cited shirking responsibility and deception. Consumers felt existing laws offered no clear solutions.

Against this backdrop, the Consumer Protection Law, 1981 entered into force in 1981. The law deals only with transactions between a business operator and a consumer; a kind of “subsidiary company” of the Sale of Goods Law, if you will.

Consumer Protection Law: Business Obligations and Consumer Rights

The law details business obligations. It prioritizes consumer rights meticulously. This warns businesses: consumer violations are costly. They face compensation or significant criminal sanctions.

Regulations and Sanctions: Specifics for Businesses

It doesn’t end there. Regulations detail every step, violation, and sanction. This covers various transactions, from negotiation to specific breaches. For instance, specific rules exist for contract cancellation. Also, post-sale responsibility and service are covered. Material information disclosure is mandated. Standard-form contracts have specific rules, even font size. Limiting phone waiting times for service is included.

Want to Know More About Contract Cancellation?

What is the legal basis for contract cancellation? What are cancellation fees and how can they be avoided? In what circumstances can a contract be cancelled? Are there basic conditions for contract cancellation? Read more about contract cancellation in the article Contract Cancellation: The Complete Consumer Guide.

To Whom Does the Consumer Protection Law Not Apply?

According to Section 39 of the Law, it does not apply to services provided by any of the following:

A. A banking corporation as defined in the Banking (Customer Service) Law, 1981.

B. An insurer or insurance agent as defined in the Insurance Business Supervision Law, 1981.

C. A financial services provider as defined in the Financial Services Supervision (Regulated Financial Services) Law, 2016.

D. A payment services provider as defined in the Payment Services Law, 2019.

Does the Consumer Protection Law Apply to the State?

Yes. Section 42 of the Law stipulates that the State is subject to the same provisions as any business operator.

What is the Validity of an Agreement with a Business Operator Whose Provisions Contradict the Consumer Protection Law?

Section 36 of the Law states that its provisions supersede any waiver or agreement that contradicts them. However, if the agreement contains conditions that are more favorable than those prescribed by law, they prevail.

Does the Consumer Protection Law Apply to Second-Hand Sales?

Consumer Protection Law: Who Is Covered?

If the transaction was private, the law does not apply. It covers only business operators and consumers.

Defining a Business Operator: Key Criteria

Section 1 defines a business operator as someone selling property or services. This includes manufacturers.

Private Transactions: Other Legal Frameworks

For private transactions, like buying a used car, other laws apply.

Identifying a Business Operator: Simple Check

How to tell if it’s a business operator? Did they issue an invoice with a tax-registered number?

Statute of Limitations for Consumer Claims

The law does not specify a statute of limitations, therefore the limitation period for a civil claim under it will be as stipulated in the Limitations Law – 7 years. However, there are sometimes cases where the limitation period is different (and usually longer).

To Whom Should a Report Be Made in Case of a Consumer Violation?

In 2006, Amendment No. 20 to the Law entered into force, establishing the Authority for Consumer Protection and Fair Trading. According to the section, the Authority will appoint an authorized representative with a range of powers: to supervise the implementation and/or violation of the law’s provisions; to investigate suspects of offenses under the law and bring them to criminal trial; to take administrative enforcement actions against violators; to handle complaints or consumer harm; to conduct and initiate surveys and research on consumer issues; and more.

The Consumer’s Right to Compensation Without Proof of Damage (“Exemplary Damages”)

Amendment No. 21 to the Consumer Protection Law sets out cases where the court may order a business operator to pay compensation without proof of damage up to NIS 10,000 for each violation (hereinafter: “exemplary damages”). However, there are cases where the court may award compensation without proof of damage up to NIS 50,000: repeated violation, ongoing violation, or violation committed under aggravating circumstances (Section 31a(c) of the Consumer Protection Law, 1981).

Furthermore, Section 31a(f) of the Law states that a consumer is not limited to the aforementioned remedy and is entitled to claim any other remedy for the same violation.

Section 31a(b) of the Law stipulates that a consumer may file a claim for compensation without proof of damage, only if they have submitted a written notice to the business operator containing the relevant demand.

For example – a case of violation of the law regarding the return of goods: the consumer wanted to return goods in accordance with the law and the business operator’s policy, and the business operator refused. The consumer will not be entitled to file a claim for compensation without proof of damage unless the consumer’s request is supported by documentation that the aforementioned request was submitted in writing to the business operator.

However, failure to submit a written request is only relevant to a claim for compensation without proof of damage. A consumer who has not submitted a written request regarding the business operator’s violation can still file a claim for other compensation. For example, a claim for damages for breach of contract or damages for non-pecuniary harm (such as distress).

How to Obtain Compensation Without Proof of Damage from a Business Operator?

Small Claims Court: When to Sue a Business

Section 31a requires a written request. If the business compensates you, great. If they ignore, refuse, or offer inadequate compensation, file a small claims suit.

Why Choose Small Claims?

Over 30% of small claims defendants are businesses. Consumers prefer it for key reasons:

  1. It’s faster, cheaper, and more efficient than “regular” civil suits.
  2. Most claims fall within the small claims court limit.

Consumers prefer this “smaller,” user-friendly framework.

Locating the Defendant’s Details by Company and/or Identity Card Number

Locating Defendant Information: Your Essential Guide

Need to find a defendant’s identity card? Want to pinpoint defendant details by address? Searching for specific company details?

This article provides comprehensive guidance on locating defendant information.

Read more in the article on Locating Company Details and/or Locating Defendant Details.

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