CHANGES TO THE CONSUMER PROTECTION ACT - AS OF JANUARY 2024 ARBITRATION BOARDS GAIN SIGNIFICANCE
As of January 1, 2024, Act CLV of 1997 on Consumer Protection (hereinafter: Consumer Protection Act) will be amended to provide consumers with more options for quickly and efficiently resolving consumer disputes without the involvement of an attorney.
Act XX of 2023 on Amendments Required for Accessible Consumer Protection (hereinafter: Amendment Act) establishes a new arbitration board system and implements several changes to the Consumer Protection Act to make dispute resolution options more flexible and efficient.
The most significant change is that arbitration boards will be able to pass resolutions that bind the companies and are enforceable even if the subject company did not file a statement of submission, provided that the consumer's claims are justified and do not exceed HUF 200,000 (approximately EUR 700). As a new general rule, boards will conduct their proceedings online; however, if a consumer requests a personal hearing, one will be held. Companies will be required to participate in hearings in person but at least online.
The Amendment Act also imposes significant institutional modifications. It reduces the current number of county-based arbitration boards from 20 to 8 regional arbitration board centers. Aside from these facilities, consumers may still request personal hearings to be held in county seats. In addition, it will be possible to hold personal hearings in cities with county rights, even if they do not qualify as county seats; therefore, this option will be available in 27 locations, up from the current 20.
If a consumer's claims are dismissed, the parties shall bear their own costs, whereas if a binding order is issued against a company, the latter will be required to bear the costs of the proceedings in full. This means that consumers can never be required to pay the costs of the companies involved in the proceedings.
In addition to providing consumers with greater leverage, the Amendment Act restricts the scope of the aforementioned by stating that micro, small, and medium-sized businesses will no longer qualify as consumers under the terms of the Consumer Protection Act as of January 1, 2024.
In developing a responsive and cost-effective dispute resolution system, the amendments are intended to keep up with market changes and fulfill customer demands. Time and experience will reveal whether these changes live up to expectations and not overburden businesses.
