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Details on Site Contribution
 
Site contribution
Date: November 2011
Prepared by:
Alexandra Geiger-Steiner, Attorney at Law
MME Partners
Meyer Müller Eckert Partners
Kreuzstrasse 42
8008 Zurich
Phone:   +41 44 254 99 66
Fax:   +41 44 254 99 60
E-Mail:   alexandra.geiger@mmepartners.ch
I. Summary
Over the recent years, consumer protection became more and more important due to the upcoming electronic commerce leading to an augmentation of long distance sales and a need of consumer protection in connection with dubious business practice.
The Swiss Federal Consumer Affairs Bureau supports and advances the interests and the protection of the consumers if the market does not respect them. Thus, it contributes to the introduction of a market which is able to reinforce the enterprises and to stimulate the consumers' confidence. During the last few years, Swiss consumer protection laws have been widely harmonized with the laws of the European Union.
The field of consumer protection covers divers and multiple aspects of the daily life. The protection of consumers' interests focuses on the commercial interests of consumers as to products (food security, general product safety, domestic machines, textile, furnishing, toys, drugs, packaging, etc.) and services (banks, insurances, education, transport, leisure activities, telecommunications, electricity, post office, housing, energy, etc.). Such products and services are subject to multiple acts covering consumer issues. The primary aim regarding the protection of commercial interests is the appropriate objective information enabling the consumer to make rational decisions. This individual consumer information is provided for by the general provision of the Swiss Code of Obligation concerning the duty to provide clarification in contractual negotiations. The collective consumer information is subject to the Federal Act on Consumer Information. Based on this Act, four organizations engaging in consumer protection have been funded by the Swiss Government.
II. Applicable Law
For a complete list of Swiss laws and regulations in the field of consumer protection, please see the listing on the website of the Swiss Federal Consumer Affairs Bureau (available in German/French/Italian):
  • Federal Act on Consumer Information of October 5, 1990 (SR 944.0)
  • Federal Act on Product Liability of June 18, 1993 (SR 221.112.944)
  • Federal Act on Product Safety of 1 July 2010 (SR 930.11)
  • Federal Act on Consumer Credits of March 23, 2001 (SR 221.214.1)
  • Federal Act on Package Tours of June 18, 1993 (SR 944.3)
  • Federal Act on Electronic Signature (SR 943.03)
  • Code of Obligations of March 30, 1911 (SR 220)
  • Swiss Code of Civil Procedure of December 19, 2008 (SR 741.01)
    III. Detailed Information
    The laws and regulations related to consumer protection cover a variety of different aspects. This article aims to outline consumer protection in connection with consumers' information, product liability and product safety, consumer credits, package tours, relevant provisions according to the Swiss Code of Obligations, e-commerce, and the place of jurisdiction for consumer contracts.
    The Federal Act on Consumer Information provides for the declaration of products and services. Everyone who launches a product on the market or provides services must declare the essential characteristics of a product or service respectively, if it is in the interests of consumers. Economic and consumer organizations decide what kind of products need to be declared. Currently, there is one agreement on declaration of fresh vegetable and berries, as well as one of fuel consumption by cars. As far as services are concerned, there has none been designated so far.
    In addition to the above, further provisions as to the declaration of products and services apply pursuant to the Federal Act on Unfair Competition and Trademark.
    The Product Liability Act ("PLA") provides for a strict liability for manufactures, importers, and suppliers for personal injuries and damages to items of property in private use caused by a defective product. The PLA largely follows the European Directive on Product Liability (Directive 85/374).
    Every movable object as well as electricity (art. 3 PLA) is defined as a product. It is regarded as defective if it does not provide for the safety one is entitled to expect, taking all circumstances into account. In particular, circumstances such as (i) the presentation of the product to the public; (ii) the usage of the product one would reasonably expect, and (iii) the time the product had been placed on the market (art. 4 PLA). According to this definition, a defect may be, among other things, the result of a deficient construction or design of the product, a defect in the production or a failure to properly instruct the users/consumers of the product.
    However, the producer is not liable for risks which were undiscoverable based on the state of current scientific and technical knowledge at the time the product was launched. In addition, there is no liability if the manufacturer proves that the defect occurred due to compliance with mandatory regulations issued by the public authorities or if a product is used improperly (art. 5 PLA). In order to limit its product liability a clear, correct, and complete declaration of the potential risks and safety measures is required. Furthermore, it further must be noted that the damaged party must absorb any costs up to CHF 900 for product damages (art. 6 PLA).
    The Product Safety Act ("PSA") applies to all ready-to-use, movable products in general and is applicable as long as no other provisions of a special law apply. It provides for the same protection level as the European Directive on general product safety (Directive 2001/95/EC). The PSA intends to guarantee product safety and to facilitate the free movement of goods across borders. This means that products lawfully launched in the European Union must be approved without further examination in Switzerland ("Cassis de Dijon-Principle").
    A product can be launched only if it does not (or only slightly) endanger the safety and health of users and third parties as long as it is used in a normal and reasonably foreseeable way (art. 3 al. 1 PSA). According to the PSA, there are hazardous circumstances that must be taken into consideration in order to ensure its safety and health. In this regard, the indicated or foreseeable product life-cycle must be considered. In case the duration period of use is not indicated, an estimation of its most probable life-cycle is made and relied on in order to determine the time period during which sufficient safety must be guaranteed by the manufacturer/importer. In consequence, the manufacturer/importer should specify the maximum life-cycle for such products on the product itself. Further, it must be taken into consideration that a product may be used by vulnerable groups of people (e.g. children or elderly people), if foreseeable (art. 3 al. 3 PSA). In addition, the PSA states the presentation and description of products. Pursuant to the relevant provisions, the layout and labeling, warning and safety notices, as well as the use and operation instructions must correspond to the specific risk potential of a product (art. 3 PSA).
    After having launched a product, the manufacturer/importer has to take appropriate measures in order to identify and avert dangers originating from the product as well as to trace back the product. Furthermore, he must examine complaints thoroughly and, if necessary, conduct random tests. The retailer also has to contribute to and support the compliance with the safety requirements. The manufacturer or any other person launching a product that notices or assumes that its product constitutes a danger to the safety or health of the consumers or any third party must immediately inform the competent authority about, among others, the measures taken to avert the danger, such as warnings, moratorium on sales or recall of the respective product (art. 8 PSA).
    In case an official check reveals that safety requirements have not been met, the further distribution of a product may be, among other sanctions, prohibited. If necessary, consumers may be warned or a product may be recalled (art. 10 PSA).
    The Consumer Credit Act ("CCA") provides for all credits granted by a creditor, if the purpose of the credit is not regarded as business or professional related. However, the creditor itself grants credits on a commercial and professional basis. The CCA also applies to leases and credit cards when the consumer has the right to pay the outstanding balance in installments.
    A consumer credit contract must be concluded in writing, and the contract must include specific requirements as outlined below. It is further required that the effective annual interest rate is - taking all costs into account - not higher than the current maximum rate of 15% (art. 14 CCA).
    The credit granted must be interest bearing, unsecured and long-term, as well as being of an amount within the range of CHF 500 to CHF 80'000 (art. 7 CCA). Consequently, credits granted for the acquisition of real estate are also subject to the CCA unless the credit is sufficiently secured by a mortgage. However, credit agreements secured by ordinary bank warranty or sufficient assets of the consumer as well as credits granted for less than a three-month-period are excluded. Although the CCA does not impose a maximum contractual term, the creditor is required to base its review of the financial standing on a repayment of the credit within 36 months (see below).
    As mentioned above, such credit agreements must be in writing and the consumer must receive a copy of the contract. It is required that the contract indicates, inter alia, the net credit amount, the effective annual interest rate plus any additional costs, the calculation methods of the interest rates, a credit limit (if applicable), the terms and conditions related to repayment and early repayment, and the right of withdrawal within the seven-day-period (art. 9 CCA).
    The credit agreements for financing products or services must further include, among others, the following additional information: the description of the products or services, the price for cash payment and the total price due for the credit arrangement, the amount of the down payment, the installments and the owner of the goods if the legal title is not immediately passed on to the consumer (art. 10 CCA). In the event of an unsatisfactory performance of such agreement, the consumer that enters into a credit agreement with someone other than the supplier may exercise all rights against the creditor which he would have against the supplier if (i) it is agreed that credits are only granted by this said creditor, (ii) the credit has been granted based on such agreement, (iii) the goods or services are either not delivered (or only partly) or contrary to the contract, and (iv) the consumer unsuccessfully exercised his rights against the supplier, and the value involved exceeds CHF 500 (art. 21 CCA).
    Lease agreements fall into the scope of the CCA when the lease concerns tangible property for private use. The contract must include, inter alia, the following information: description of the leasing goods; its price of cash payment at the time of the contract conclusion; the information on the installments; the effective annual interest rate; the right of withdrawal within the seven-day-period; a chart indicating the value of the goods by early termination at a certain time, and the elements being taken into account for the review of the lessee's financial standing (art. 11 CCA).
    An account overdraft is subject to the CCA if the - above mentioned - general conditions are met. Credit and customer cards are subject to the CCA when the agreement between the issuer of the credit card and the consumer includes a credit option. A credit option is defined as the possibility to pay the outstanding balance in installments (art. 12 al. 1 CCA).
    Apart from being in writing, the contract must include the maximum credit amount; the annual interest rate and cost charged at the closing of the contract; the calculation methods of the interest rate; the termination modalities, and the elements of the review of the financial standing (art. 12 al. 2 CCA).
    During the contractual duration, the creditor must inform the consumer about all changes in relation to the interest rate as well as any other applicable costs. This requirement may be met by issuing an account statement. When an overdrawn account is tacitly accepted for a period longer than three months, the creditor is obliged to inform the consumer about the annual interest rate and the cost charged to the account of the consumer as well as all related changes to this information (art. 12 al. 3 and 4 CCA).
    The regulations in regard to the review of a consumer's financial standing are the CAA's core part. This review aims to prevent insolvency of consumers caused by credit agreements.
    The creditors must jointly establish an information office for consumer credits ("Information Office") which is responsible for data processing and data protection (art. 23 CCA). The data access is restricted to the creditors subject to the CCA. The Information Office is to be notified by the creditors about credits granted to consumers. In addition, it must be informed of the outstanding installments if the outstanding amount is more than 10% of the net credit amount or the net purchase price. In a lease agreement, the creditor has to provide the following information: (i) the value of the leasing obligation; (ii) the contractual period, and (iii) the monthly installments. Additionally, the creditor has to inform the information office when three installments are outstanding. In an over-draft by credit or customer card, the creditor has to inform the Information Office of the outstanding amount if the consumer has used the credit option three times in a row and the outstanding amount exceeds CHF 3'000 (art. 25 ss. CCA).
    The creditor must review the consumer's financial standing prior to the conclusion of the agreement. A consumer is considered as creditworthy if he is able to repay the credit without needing the part of the salary exempted from execution according to the Swiss Federal Act on Debt and Insolvency. The sizable part of the salary is to be determined based on the subsistence minimum and the CCA (art. 28 al. 3 CCA). The review of the financial standing is to be based on the question of whether the consumer is able to repay the credit within 36 months, even if the effective contractual term may last longer. As far as lease agreements are concerned, the same review provisions apply, except that assets owned by the lessee and used to secure the payment of the installments are also taken into consideration. As to overdrafts, the creditor has to review the income and property indicated by the consumer. The credit limit must be determined according to this information given by consumer and the information received from the Information Office. If the creditor receives information that the overall financial situation of the consumer has worsened, a new review of the financial standing is required (art. 28 CCA).
    In general, the creditor can rely on information given by the consumer regarding his financial situation except the information is obviously wrong or differing from the information given by the Information Office. If the creditor questions the information given by the consumer, the creditor is required to verify the correctness with private or official documents, e.g. salary certificate (art. 31 CCA).
    4.  Sanctions
    If the creditor severely violates its obligation to review the consumer's financial standing, the creditor loses the credit amount with all interests and charges. In such case, the consumer is entitled to claim the repayments of the payments already done. If the violation of the creditor is minor, the creditor only loses the interests and charges (art. 32 CCA).
    The consumer has the right to revoke his offer or declaration of acceptance in writing within 7 days. The time limit starts upon receipt of the copy of the signed contract. The time deadline is met by handing over the withdrawal letter to the post office on the seventh day. If payment has already been made, the consumer must reimburse it but without paying any interests (art. 16 CCA)
    Further, the consumer has the right to repay the full outstanding amount under a credit agreement at any time. In such event, he is entitled to receive a reduction of interest payments and an appropriate reduction of the charges relating to the remaining contract period. In a lease agreement, the lessee may terminate the agreement by giving 30-day-notice effective as of end of a three-month-period. The outstanding claim of the lessor is calculated according to the contractual provisions (art. 17 CCA).
    In case the unpaid installments exceed 10% of the net credit amount or net purchase price of three monthly installments under a lease agreement, the creditor is entitled to rescind from the contract (art. 18 CCA).
    The Federal Act on Package Tours ("PTA") regulates travel arrangements with duration of at least 24 hours or with one overnight stay. In addition, the arrangement must include at least two of the following elements: (i) transportation, (ii) accommodation or (iii) other tourist services (art. 1 PTA). All information on the travel given in a brochure is binding and unchangeable except the parties agree otherwise or the right to do so is reserved explicitly. The tour operator/agent must inform the consumer about the relevant terms and conditions of the travel arrangement prior to the conclusion of the contract, and must provide further information prior to the departure, in writing (art. 4 s. PTA). Any contractual agreed prices may only be increased if the contract states (i) a reservation and the respective calculation methods; (ii) the change is made a least three weeks prior to departure; and (iii) the change of prices is due to an increase of the cost of transportation (including gas), charges for certain services, and fluctuation of the exchange rate (art. 7 PTA).
    If the contract is adjusted substantially prior to departure, the consumer has the right to accept the changes or to withdraw. In case of such withdrawal, the consumer is entitled to an equivalent or better travel arrangement without additional costs, a travel arrangement of lesser quality whilst being reimbursed the price difference or a reimbursement in full (art. 10 PTA). The consumer is entitled to the same rights if the tour operator cancels the arrangement due to a circumstance the consumer is not responsible for (restriction: the minimum number of participants is not reached or force majeure [art. 11 PTA]). If the tour operator performs unsatisfactorily, the consumer has to notify the travel operator/agent immediately in writing. If the performance cannot be adjusted, the travel operator is required to either take appropriate measures or to pay damages (art. 12 s. PTA).
    There are further some consumer protection provisions in the Swiss Code of Obligations ("CO") included. Pursuant to the relevant provisions, an addressee of an unordered product is neither obliged to return the product nor to store it. In addition, as far as door-to-door transactions are concerned (art. 40a ss. CO), the consumer has the right to revoke his offer or his declaration of acceptance if the offer was made (i) at his place of work, in living accommodations or in their surroundings; (ii) in public transportation, or on public streets and places; or (iii) at a promotional function combined with an excursion or a similar event. There is no right of revocation if the consumer explicitly solicited the contract negotiations or made his declaration at a market or trade fair stand. The supplier must inform the consumer in writing about his revocation right as well as about the form and time limit of revocation (7 days), and must give him his address. The revocation must be declared in writing within 7 days after having offered or accepted the contract and after having received the said information. Moreover, articles 406a ss. CO provide for the mandate to broker marriage or partnership.
    H.  E-Commerce
    In the area of e-commerce, pursuant to the Swiss Code of Obligation, it is possible to conclude a purchase contract through an electronic signature. All requirements are regulated in the Federal Act on Electronic Signature.
    Moreover, Switzerland and the United States of America have given a joint declaration on e-commerce. In this joint declaration, the two countries state their intention to facilitate and encourage electronic commerce, prevent possible discriminatory measures, guarantee users a higher degree of legal certainty, and establish the necessary climate of trust and confidence for electronic transactions. The transfer of personal data established by enterprises located in Switzerland and sent to enterprises located in the United States is simplified. It does not only simplify the administrational procedures for the enterprises, but reinforces the rights of data protection of the concerned persons. Enterprises located in the United States and registered in the "Swiss-U.S. Safe Harbor Framework" engage to respect an adequate protection (for further information see State Secretariat for Economic Affairs [Seco]).
    According to the Swiss Code on Civil Procedure ("CCP"), the jurisdiction for actions in relation to consumer contracts lies with the court at the domicile of the consumer's domicile. However, the consumer may also file its action at the supplier's domicile. Furthermore, a jurisdiction agreement can only be concluded once a dispute has arisen, and consumers cannot in advance validly waive or submit to jurisdiction (art. 32 in connection with art. 34 CCP).
  • Where can I find general information related to consumer protection?
    There is a list of consumer organizations posted on www.konsum.admin.ch. Most of the consumer organizations offer publications and hotlines related to all aspects and issues of consumer protection.
  • Where can I find detailed answers specific questions related to consumer rights?
    On the platform "i-Punkt" by the FCBA you can search information related to specific consumer protection topics (e.g. health care, prices, and consumer rights) and you are also able to post comments on consumer issues by your own.
  • What is the duty of the "Preisüberwacher" (Price Supervisor)?
    The Price Supervisor's duty is the observation of the general trend in prices, the prevention of abusive price increases, and the orientation of the public on its ac-tivities.
    V. Useful Links
  •  
  • Federal Consumer Affairs Bureau (FCBA)
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  • Consumer Protection: konsumentenschutz.ch (only German)
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  • Consumer Protection: www.konsum.ch (only German)
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  • Preisüberwacher (German, French, Italian)
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  • Beobachter (German only)
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  • Kassensturz (German/French/Italian)
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  • Swissmedic (German/French/Italian/English)