icon-angleicon-facebookicon-hatebuicon-instagramicon-lineicon-linked_inicon-pinteresticon-twittericon-youtubelogo-not
People

With one of the largest legal teams in Japan, we bring a wealth of practical knowledge focused on the singular purpose of providing high quality legal services.

Publications

Our lawyers have authored or co-authored a number of newsletters, articles, books and other materials covering a wide range of legal areas to address the latest legal developments and increasingly diverse and complex issues.

Seminars

We regularly hold seminars and offer lectures through various formats, such as online streaming.

SCROLL
TOP
Publications
Newsletters

NEW DRAFT LAW ON PROTECTION OF CONSUMER’S RIGHTS (Vietnam)

NO&T Asia Legal Review

*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

In January 2022, the Vietnam Ministry of Industry and Trade has released the draft of the new Law on Protection of Consumer’s Rights ("LPCR") for public comments and consultation. The draft maintains 13 articles from the current LPCR, amends 38 articles, and adds 29 new articles.

Set out below is a summary of the new important provisions of the draft.

1. Protection of Personal Information of Consumers

Currently, the provisions governing consumer information protection have been mentioned in a number of different regulations such as Law on Information Technology, Law on Cyberinformation Security, Law on Electronic Transactions, or Decree 52/2013/ND-CP on E-commerce. The current LPCR (No.59/2010/QH12) has only one article regulating basic provisions on this issue (Article 6): “Consumers’ information shall be kept safe and confidential when they participate in transactions relating to use of goods or services, except where competent state agencies require the information.”

The draft LPCR supplements a definition of consumer information and includes provisions related to the protection of consumer information by way of 6 articles (from Article 7 to 12). Specifically, the LCPR provides that “the consumer’s personal information includes consumers’ personal information, information about the consumption process and other information given by consumers or organizations and individuals in connection with transactions” (Article 3.9 of the draft).

Articles 7 to 12 of the draft LPCR set out many responsibilities of traders with respect to the protection of consumer information as follows.

Current LPCR Draft LPCR
Responsibility when authorizing a third party to collect, store, use personal information of consumers
  • Not regulated
  • The contract between the two parties shall clearly specify the responsibilities of each party in complying with the provisions of law on protection of personal information;
  • If not, the trader shall be responsible in case the collection, storage, use of personal information of consumers breaches the provisions of law.
  • (Article 7)
Responsibility on establishing and publishing a policy on personal information protection
  • Not regulated
  • Traders when collecting, storing, using consumer’s personal information shall establish and publicly announce a policy on personal information protection including purpose of information collection, scope of information use, information storage time, persons or organizations that may have access to such information; etc.
  • The aforementioned contents shall be clearly communicated and made available for consumers to decide before or at the time of information collection.
  • (Article 8)
Responsibility on notification when collecting consumer’s personal information Traders shall notify clearly and openly the consumer of the purpose of the collection and use of consumer information in advance
 
(Article 6.2.a)
  • Traders that collect personal information of consumers are required to:
  • obtain the prior consent of consumers to whom such information belongs;
  • establish a mechanism for consumers to be able to choose information fields that consumers agree to provide and express their consent
  • establish mechanism for consumers to decide whether or not to allow the use of their personal information in certain cases (e.g. sharing, disclosing, transferring information to third parties)
  • Traders are not required to notify consumers when collecting information in certain cases (e.g. collecting publicly announced personal information; collecting personal information to enter into or perform the sale contracts of products or services)
  • (Article 9)
Responsibility on using of consumer’s information
  • Use information in conformity with the purpose informed to consumers, and with the consent of the consumers
  • (Article 6.2.b)
  • Use consumers’ personal information in accordance with the notified purposes and scope, except for certain cases (e.g. there are separate agreements with consumers on the purpose and scope of use other than the notified purposes, scope; to provide products or services at the request of consumers)
  • In case the traders change the purpose and scope notified to consumers, such traders are required to notify customers again and receive the consumer’s consent for such change.
  • (Article 10)
Responsibility on ensuring safety and security of consumers’ personal information
  • Traders who collate, use or transfer information about consumers are required to ensure safety, accuracy and completeness when collating, using or transferring information about consumer
  • (Article 6.2.c)
  • Traders are required to ensure the safety and security of consumers’ personal information collected and stored, and prevent illegal use of information; illegal change or destruction of information, etc.
  • Traders are required to establish a mechanism to receive and settle consumers’ complaints related to the illegal collection of personal information, misuse of the notified purpose or scope.
  • In case an information system is attacked, creating the risk of losing consumers’ personal information, traders or parties storing relevant information shall notify the relevant authorities within 24 (twenty-four) hours after detecting the incident and take necessary measures.
  • (Article 11)
Responsibility on updating, adjusting, transferring or destroying personal information of consumers
  • Traders who collate, use or transfer information about consumers are required to take the initiative of updating and amending information on discovery that it is inaccurate, or to make measures to enable consumers to update and amend such information
  • (Article 6.2.d)
  • Traders are obliged to check, update, adjust, transfer or destroy consumers’ personal information upon the consumers’ requests or provide consumers with the means by which they can check, update, adjust, transfer or destroy their personal information by themselves.
  • (Article 12)

These regulations are very similar to the provisions on the protection of the personal information of consumers in e-commerce activities stipulated in the Decree 52/2013/ND-CP. Thus, under the draft LPCR, consumers in e-commerce transactions as well as other types of transactions will be protected with the same policy.

2. Protection of Vulnerable Consumer

One of the notable points in the draft LPCR is the regulation on the protection of the rights of vulnerable consumers. This is a completely new regulation compared to the current LPCR. Vulnerable consumers under the draft LPCR include elderly people, people with disabilities, children, ethnic minorities, and other vulnerable groups in accordance with relevant laws (Article 3.10).

For vulnerable consumers, the traders are requested to implement the following policies:

  • Have policies on and ensure priority rights in prices, fees, and other incentives for vulnerable consumers in the purchase and sale of products and provision of services.
  • Provide an appropriate complaint and dispute settlement mechanism;
  • Comply with regulations on prohibited activities stipulated by LPCR as well as laws and regulations regarding elderly people, people with disabilities, children, ethnic minorities etc., during the transaction process;
  • Have mechanisms and policies to fight discrimination, abuse, exploitation of vulnerable consumers in the collection, storage, and use of their personal information;
  • Have other incentive and support mechanisms and policies as prescribed by laws.

3. Responsibilities of Traders to Consumers

The draft LPCR adds many new responsibilities of traders to consumers as follows:

a) Responsibility to ensure safety and quality of products and services provided to consumers (Article 19)

  • Traders are responsible for ensuring the safety and quality of products and services provided to consumers in accordance with the contents that are registered, notified, announced, agreed with the consumers, or prescribed under the laws.
  • In the process of performing the responsibility to ensure the safety and quality of products and services, traders need to ensure their suitability with consumer groups according to age, gender, income, geographical area, ethnicity, health status, mental and physical characteristics.
  • Traders are responsible to warn about products and services that are likely to be unsafe, adversely affect the health, life, and properties of consumers, and notifying prevent measures.

b) Responsibilities for receiving and handling consumer complaints or requests (Article 30)

Business organizations and individuals are responsible for:

  • Developing and publicly announcing the process of receiving and resolving consumer complaints or requests at a conspicuous location at the headquarters, business locations, and on the website (if any).
  • Receiving and handling consumer complaints or requests in accordance with the announced process.

c) Responsibilities for defective products (Article 31, Article 32)

Responsibilities for defective products are stipulated in the current LPCR (Article 22). The draft LPCR divides defective products into 2 groups:

(i)   Defective products of group A means the products capable of causing damage to the health and life of consumers and

(ii)  Defective products of group B means the products capable of causing damage to consumers’ property.

The product recall process is basically the same as the current regulation, however, for products of group A, traders, when detecting a defective product, must take all necessary measures to stop the supply of defective goods in the market. For the products of group B, this action is not required.

The draft LPCR adds a new regulation on the responsibility of the competent authorities on supervising the recall of defective products to ensure that the recall is carried out in accordance with the notified contents.

4. Protection of Consumer’s Right in Particular Transactions

The draft LPCR adds a new chapter addressing some particular trading forms, i.e., distant transactions, continuous provision of services, home sales, and specifying the trader’s responsibilities when transacting with consumers. These types of transactions are increasingly popular in Vietnam but pose many potential risks to consumers.

  • Distant transaction means a transaction for products and services performed in cyberspace or other indirect means, in which, consumers are not allowed to check and directly contact products and services before participating in transactions.
  • Continuous provision of services is the activity of provision of services for a term of three months or more or for an indefinite term.
  • Home sales is the activity of selling products and providing services, in which traders actively approach and introduce products and services for sale to consumers. Home sales include the following forms: (i) Door-to-door sales, (ii) Multi-level marketing, and (iii) Sales at a place that is not a place of regular transactions.

Currently, some regulations related to such transactions are sporadically regulated in many different legal documents, such as Decree 99/2011/NĐ-CP guiding a number of articles of current LPCR, Decree 40/2018/NĐ-CP providing a regulatory framework for multi-level marketing, or Decree 52/2013/ND-CP on e-commerce. However, they are assessed as incomplete and lacking in specificity. The supplement of specific provisions into the LPCR with greater legal effect is expected to improve the effectiveness of consumer protection.

Conclusion

The deadline for the MOIT to receive comments is 10 March 2022. The new LPCR will be enacted in the middle of next year and is likely to take effect in early 2024. With many new and specific regulations, the new LPCR is expected to protect consumers’ interests more effectively. Traders must take note of these new regulations and change and update their policies in due course when selling goods or providing services to consumers.

This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.

Download full text(PDF)

Lawyers

Consumer Law Related Publications

Product Safety, Product Compliance, Product Recall and Product Liability Related Publications

Consumer Contracts/General Terms and Conditions/e-Commerce Related Publications

Global Practice Related Publications

Asia and Oceania Related Publications

Vietnam Related Publications

× Close
Select Practice Areas
× Close