Consumer Protection Law Prescribes a General Arrangement for Canceling Transactions

An amendment to the Consumer Protection Law was enacted recently, regulating the ways by which consumers can cancel transactions and imposing obligations on businesses to disclose to consumers how they can cancel transactions.

Up until now, the Consumer Protection Law prescribed various arrangements for canceling transactions, such as continuous transactions (section 13.D. of the law), remote sale transactions (section 14.C. of the law), and purchases of vacation units (section 14.C. of the law). However, this new amendment now defines a general arrangement that encompasses a wide spectrum of consumer transactions.

According to the new amendment, consumers will be able to cancel transactions by issuing a cancelation notice in a variety of ways: orally—by telephone or in person at the place of business (unless the amendment expressly specifies that that type of transaction must be canceled in writing); by registered mail; by e-mail; by fax (if the business has a fax); via the internet (if the business may engage in online transactions with consumers); and by any other means to be decided by the Minister of Economics and Industry.

Referring to engagements in online transactions, the amendment requires websites to conspicuously display a designated link on their home pages that consumers can use to issue a cancelation notice.

As stated, the amendment also imposes obligations on businesses to disclose the ways by which transactions may be canceled, and requires informing consumers in writing about how they can issue cancelation notices, the contact details pertinent to each mode of cancelation, and the details that consumers must include in the cancelation notices. This information must be provided to consumers by no later than the supply date of the goods or services and, subsequently, must also be included in the invoices sent to consumers. Businesses must also provide this information on their websites (if they have one), adjacent to the link enabling the transmission of cancelation notices.

The amendment also prescribes provisions regarding monetary sanctions and compensation that will be levied in respect of a failure to comply with the obligations imposed by the legislative amendment.

Alongside the trend of defining comprehensive regulations for canceling transactions, the amendment excludes a list of purchase transactions of goods and services from the aforesaid obligations, wherein the said list is subject to specific regulatory arrangements. Included among such transactions are cosmetics services, various types of communications services, and subscriptions to gyms.

The amendment to the Consumer Protection Law will come into effect on November 25, 2017. It is sure to affect the operations of many service providers in the Israeli economy, as they will be forced to adapt their policies and modes of operation to the new legislation.