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Consumer Protection Q&A

1.How can consumers protect their rights and interests in safe consumer products?
Consumers are entitled to protection of their rights and interests in safe consumer products. However, consumers are also obligated to take their own actions to protect their rights and interests in safe consumer products in accordance with Article 5 of the Consumer Protection Act:
(1) Consumers shall be knowledgeable about the consumer information.
(i) To be knowledgeable about the consumer information, consumers shall be susceptible to consumer education programs.
(ii) Consumers shall gather relevant consumer information before making their purchases.
(iii) Consumers shall make inquiries whenever they have questions with regard to the consumer products.

(2) Consumers shall act rationally and properly when making their purchases.
(i) Consumers shall not purchase dangerous products or services.
(ii) Consumers shall read the products’ instructions or labels carefully.
(iii) Consumers shall not misuse the products.
(iv) Consumers shall request products’ warranty or related documents from the business entities selling the products.
(3) When consumer disputes arise, consumers shall try to resolve the disputes promptly by filing complaints, applying for consumer dispute mediation, or bringing legal actions pursuant to the Consumer Protection Act.

2.What kinds of services can a consumer-protection officer provide to the consuming public?
The legal authority granted to the consumer-protection officer by Articles 43, 45, 49 and 53 of the Consumer Protection Act are:
(1) To receive complaints from consumers: The consumer-protection officer may receive complaints from consumers when business entities, consumer protection organizations, consumer service centers or their divisions receiving the initial complaints from consumers, have failed to handle the complaints properly. (Article 43 of the Consumer Protection Act)
(2) To provide mediation: The consumer-protection officer may serve as the chief commissioner in the Consumer Dispute Mediation Commission and take charge in all matters relating to the consumer dispute mediation. (Article 45 of the Consumer Protection Act)
(3) To exercise discretion: the consumer-protection officer may exercise discretion to allow consumer protection organizations to bring legal actions for damages under Article 50 of the Consumer Protection Act, or to petition for cease and desist orders under Article 43 of the Consumer Protection Act on behalf of the consumer-protection officer. (Article 49 of the Consumer Protection Act)
(4) To petition for cease and desist orders: With regard to the violative acts or practices done by business entity in violation of the Consumer Protection Act, the consumer-protection officer may petition for cease and desist orders to enjoin such violative acts or practices. (Article 53 of the Consumer Protection Act)
The violative acts or practices stated above refer to acts or practices done by business entities which cause damages or are likely to cause damages to the life, body, health or property of the consuming public. (Article 40 of Enforcement Rules of the Consumer Protection Act)
(5) Other authority granted to the consumer-protection officer by the Consumer Protection Act and relevant provisions: With regard to the appointment and authority of the consumer-protection officer, it will be governed by the “Rules Governing Appointment and Authority of the Consumer-Protection Officer” enacted by the Executive Yuan in accordance with the law.

3.How may consumers resolve their consumer disputes derived from products or services selling by business entities?
When consumer disputes derive from products or services selling by business entities to consumers, consumers may take one or both of the following options to resolve their disputes:
(1) administrative proceedings:
(i) filing complaints.
(ii) applying consumer dispute mediations: Consumers may apply for consumer dispute mediations when business entities, consumer protection organizations, consumer service centers or their divisions receiving the initial complaints from consumers, have failed to handle the complaints properly. (Article 43 of the Consumer Protection Act)
(2) Judicial Proceedings: Consumers may bring legal actions against business entities. (Articles 47 to 55 of the Consumer Protection Act)

4.Which agency or division may consumers file their consumer complaints relating to consumer disputes derived from products or services selling by business entities to consumers?
When consumer disputes derive from products or services selling by business entities to consumers, consumers may have two chances to file their complaints:
(1) The first complaint: Consumers may choose to file their complaints to any of the following agencies or divisions:
(i) the business entity
(ii) the consumer protection organization
(iii) the consumer service center or its division
(2) The second complaint: Consumers may file complaints to the consumer-protection officer when business entities, consumer protection organizations, consumer service centers or their divisions receiving the initial complaints from consumers, have failed to handle the complaints properly.

5.Whether consumers shall exhaust both of the administrative proceedings (filing complaints and applying for consumer dispute mediations) before commencing legal actions?
The administrative proceedings of filing complaints and applying for consumer dispute mediations are administrative dispute resolutions. They are not preliminary procedures for the commencement of legal proceedings. Consumers need not pursue administrative proceedings before commencing legal actions or vice versa. Consumers may take one or both options to resolve their disputes. If consumers commence legal actions directly without exhausting the administrative proceedings of filing complaints and applying for consumer dispute mediations first, the legal actions brought by consumers are still lawful.
Thus, when consumer disputes arise, consumers may take one or both options whichever is best for their own interests to resolve their consumer disputes.

6.How may consumers commence legal actions when their rights and interests in safe consumer products are infringed?
When consumers’ rights and interests in safe consumer products are infringed, consumers may take one of the following options to commence their legal actions:
(1) Civil actions by consumer for damages: A Consumer may commence his or her own legal action for damages in accordance with the provisions set forth in the Civil Procedure Act.
(2) Legal representative actions: Article 54 of the Consumer Protection Act provides that injured consumers may designate one or more legal representatives to commence a legal action when a large number of consumers are involved in the same sales transaction.
(i) Designation of legal representatives before the commencement of legal actions: Injured consumers may designate one or more legal representatives to commence a legal action for damages in accordance with Article 41 of the Consumer Protection Act.
(ii) Designation of legal representatives after the commencement of legal actions: When some of the injured consumers have designated one or more legal representatives to commence a legal action for damages in accordance with Article 41 of the Consumer Protection Act, the presiding judge may publicize the legal proceeding with the legal representative’s approval.
Any other injured consumers may petition to join the legal proceeding by submit a legal brief with claim of injury and supporting proof before deadline. The presiding judge will consider the newly joined consumers as designated legal representatives under Article 41 of the Consumer Protection Act.
(iii) Class actions by the consumer protection organization for damages: Article 50, Paragraph 1 of the Consumer Protection Act provides that injured consumers may assign their rights and interests in safe consumer products to a consumer protection organization when more than 20 consumers are injured by the same cause. The consumer protection organization may then commence its own legal action.

7.Who is a “consumer”?
According to Article 2, Paragraph 1 of the Consumer Protection Act, a “consumer” means any individual who seeks or acquires any products or services by purchase or lease for personal, family, or household purposes. As used in this Consumer Protection Act, the term of “consumer” has the following meanings:
(1) Everyone is a consumer: In a highly industrialized society, no one can live independently in isolation. Thus everyone has to purchase and use products or services provided by various business entities to maintain his or her daily life. Because everyone has to purchase products or services, everyone is therefore a consumer.
(2) A consumer is not a business entity: Consumers are the counterparts of business entities. While consumers and business entities are both the primary regulatory subject matters under the Consumer Protection Act, consumers are not business entities. Consumers’ rights and interests in safe consumer products usually become business entities’ obligations. By protecting consumers’ rights and interests in safe consumer products and enforcing business entities’ obligations in making safe consumer products, the quality of life for the consuming public is gradually enhanced.
(3) Business entities may sometimes become consumers: While a consumer is a person making purchases, a business entity may become a consumer when it is not making products. When a business entity is making purchases rather than making products, the business entity becomes a consumer.
(4) Consumers are not limited in being the counterparts in sales transactions: While rights and obligations in safe consumer products only exist between the contractual parties in sales transactions, consumers are not limited in being the purchasers in sales transactions and may also be the users of consumer products or recipients of consumer services.

8.What is a “business entity”?
According to Article 2, Paragraph 2 of the Consumer Protection Act, a “business entity” means any entity that designs, produces, manufactures, imports, and distributes consumer products or provides consumer services for commercial purposes. As used in this Consumer Protection Act, the term of “business entity” has the following meanings:
(1) Business entities are entities selling consumer products or services for commercial purposes: Any consumer product or service provider, whether it is a corporation, organization or individual, is a business entity if it sells its products or services for commercial purposes. Any entity engaging in business of agriculture, forestry, fishery or animal husbandry, constitutes a business entity under the Consumer Protection Act. However, farmers, foresters, fishermen and shepherd who do not usually sell their products for commercial purposes but only occasionally provide their products for sale, are not business entities. The law enforcement agencies which do not engage in any business for commercial purposes, are not business entities. In addition, a business entity’s employees are not part of that business entity.
(2) Categories of business entities: Business entities are divided into the following categories based on the nature of their business:
(i) Business entities engage in designing, producing, and manufacturing consumer products or providing consumer services.
(ii) Business entities engage in distributing consumer products or services.
(iii) Business entities engage in importing consumer products or services.
(iv) Media entities engage in advertising.

9.What is a “consumer dispute”?
According to Article 2, Paragraph 4 of the Consumer Protection Act, a “consumer dispute” means any dispute derived from products or services selling by business entities to consumers. As used in this Consumer Protection Act, the term of “consumer dispute” has the following meanings:
(1) Consumer disputes are limited to disputes between consumers and business entities: Consumer disputes are strictly limited to disputes between consumers and business entities. Disputes between consumers or disputes between business entities are not “consumer disputes” governed by this Consumer Protection Act.
(2) Consumer disputes are limited to disputes derived from consumer products or services: Consumer disputes are strictly limited to disputes derived from products or services selling by business entities to consumers. Consumer disputes do not include other disputes such as complaints filed by consumers against business entities for their degraded products or services before purchases. Since consumers’ complaints were filed before purchase and no consumer relationship exist between consumers and business entities, this type of disputes are not “consumer disputes” governed by this Consumer Protection Act.

10.What is a “consumer product” under the Consumer Protection Act?
(1) The term of “consumer product” is not explicitly defined in the Consumer Protection Act. However, by making specific reference to the European Common Market Directive of Product Liability, Article 40 of Enforcement Rules of the Consumer Protection Act provides that a “consumer product” under Article 7 of the Consumer Protection Act means any tangible or intangible goods of trading, including any final products, partially-finished products, raw materials or parts.
(2) Because various provisions relating to consumer products are inconsistent within the Consumer Protection Act, it is impossible to define the scope of “consumer product” in each provision. To prevent any controversies arising from the application of no-fault liability (strict liability) prescribed in Article 7 of the Consumer Protection Act to business entities, Article 40 of Enforcement Rules of the Consumer Protection Act specifically provides that a “consumer product” under Article 7 of the Consumer Protection Act means any tangible or intangible goods of trading, including any final products, partially-finished products, raw materials or parts.
(3) Any product provided by entities engaging in business of agriculture, forestry, fishery or animal husbandry, is also a consumer product governed by the Consumer Protection Act. With regard to other definitions of “consumer product”, it is better decided by courts and legal scholars in accordance with the social and economic changes and the necessity to protect the consuming public.

11.What is a “consumer service” under the Consumer Protection Act?
(1) The term of “consumer service” is not explicitly defined in the Consumer Protection Act. However, by making reference to the 1990 European Common Market Proposed Bill of Service Liability, a “consumer service” governed by Article 7 of the Consumer Protection Act may be defined as a personal service other than producing or manufacturing products or transferring tangible property rights or intellectual property rights.
(2) Because no-fault liability imposed on business entities providing consumer services is pioneered by the Consumer Protection Act of this country without any relevant case law and legislation, it is impossible to comprehensively define the scope of “consumer product” in the Consumer Protection Act. With regard to other definitions of “consumer product”, it is better decided by courts and legal scholars in accordance with the social and economic changes and the necessity to protect the consuming public.

12.Whether the liability imposed on business entities for consumer damages associated with consumer products or services under Article 7 of the Consumer Protection Act is “no-fault liability (strict liability)”?
According to Article 7 of the Consumer Protection Act, “no-fault liability (strict liability)” shall be imposed on business entities engage in designing, producing, and manufacturing consumer products or providing consumer services for consumer damages associated with consumer products or services. As used in this Consumer Protection Act, the term of “no-fault liability (strict liability)” has the following meanings and requirements:
(1) Meanings: Article 7, Paragraph 3 of the Consumer Protection Act explicitly provides: “Business entities which violate the preceding two provisions, resulting damages to consumers or a third person, shall be jointly and severally liable. However, if business entities are able to prove that they are not at fault in causing damages to consumers or a third person, their liability may be reduced by court.” Thus, the liability imposed on business entities for consumer damages associated with consumer products or services under Article 7 of the Consumer Protection Act is “no-fault liability (strict liability)”.
(2) Requirements: Only when the consumer products or services available do not endanger the safety or health of the consuming public, business entities are not strictly liable for consumer damages associated with consumer products or services.

13.What does the term of “endanger the safety or health of the consuming public” referred to in Article 7, Paragraph 1 of the Consumer Protection Act mean?
Article 7, Paragraph 1 of the Consumer Protection Act explicitly provides: “Business entities which engage in designing, producing, and manufacturing consumer products or providing consumer services shall make certain that the consumer products or services they provide will not endanger the safety or health of the consuming public.” As used in this Consumer Protection Act, the term of “endanger the safety or health of the consuming public” has the following meanings according to Article 5 of Enforcement Rules of the Consumer Protection Act:
(1) The consumer products or services must pose an unreasonable risk of danger to the consuming public: The term of “endanger the safety or health of the consuming public” referred to in Article 7, Paragraph 1 of the Consumer Protection Act means that when business entities put consumer products into the stream of commerce or provide consumer services in the market, these products or services pose an unreasonable risk of danger to the consuming public. In other words, these products or services do not possess a reasonable expectation of safety. This kind of unreasonable risk of danger is generally considered as a “defect”.
(2) The unreasonable risk of danger prohibited under Article 7, Paragraph 1 of the Consumer Protection Act does not include the risk of danger involved in inventing or developing new products or services: To promote the progress in society, the term of “endanger the safety or health of the consuming public” referred to in Article 7, Paragraph 1 of the Consumer Protection Act does not include the following risks of danger in inventing or developing new products or services:
(i) “State of the art” products or services: Since “state of the art” products or services normally possess a reasonable expectation of safety, the term of “endanger the safety or health of the consuming public” referred to in Article 7, Paragraph 1 of the Consumer Protection Act does not include the risk of danger in inventing or developing these “state of the art” products or services.
(ii) Modified or newly invented products or services: To encourage modification and invention of consumer products and services and to promote development of business entities, consumer products or services provided by business entities will not be considered to endanger the safety or health of the consuming public merely because they have subsequently been replaced by better products or services.
(3) the considering factors in determining whether a consumer product or service poses an unreasonable risk of danger: According to Article 5, Paragraph 2 of Enforcement Rules of the Consumer Protection Act, whether a consumer product or service endangers the safety or health of the consuming public will be determined case by case by considering the following factors and the totality of circumstances:
(i) the instruction or label of the consumer product or service.
(ii) foreseeable use or acceptance of the consumer product or service.
(iii) the availability of the consumer product or service and the duration in providing the consumer product or service

14.How may consumers recover from business entities for damaged associated with consumer products or services?
According to Article 7, Paragraph 1 of the Consumer Protection Act, business entities shall make certain that the consumer products or services they provide will not endanger the safety or health of the consuming public. Consumers may bring civil actions against business entities for damages associated with consumer products or services if business entities have violated the provision stated above.
(1) Objects and methods of recovery: Consumers may bring civil actions simultaneously or consecutively against one or more or all of the following business entities for all damages or partial damages associated with consumer products or services:
(i) Business entities engage in designing, producing, and manufacturing consumer products or providing consumer services.
(ii) Business entities engage in distributing consumer products or services.
(iii) Business entities engage in importing consumer products or services.
(iv) Media entities engage in advertising.
(2) Punitive damages: When consumers are injured by the consumer products or services provided by business entities, they may bring legal actions against business entities for punitive damages.
(i) Intentional: If consumers’ injuries are caused by business entities’ intentional acts, consumers may claim triple amount of actual damages as punitive damages.
(ii) Negligent: If consumers’ injuries are caused by business entities’ negligent acts, consumers may claim the same amount of actual damages as punitive damages.

15.How shall business entities be liable to consumers for damages associated with consumer products or services?
According to Article 7, Paragraph 1 of the Consumer Protection Act, business entities generally shall make certain that the consumer products or services they provide will not endanger the safety or health of the consuming public or they shall otherwise be jointly and severally liable to consumers for damages associated with consumer products or services. Business entities shall have different liability based on the nature of their business:
(1) Business entities engage in designing, producing, and manufacturing consumer products or providing consumer services: Business entities under this category shall be strictly liable for consumer damages associated with consumer products or services. These business entities are still liable to consumers for damages even when they have proved that they are not at fault in causing damages to consumers or a third person, but their liability may be reduced by court. (Article 7, Paragraph 3 of the Consumer Protection Act)
(2) Business entities engage in distributing consumer products or services: (Article 8 of the Consumer Protection Act)
(i) No liability in general: With regard to the damages caused by consumer products or services, if business entities under this category are able to prove that they have exercised the due care to prevent the damages or the damages could not be prevented by the exercise of due care, they are not liable to consumers for damages.
(ii) Exception – strict liability: If business entities under this category have altered or repackaged consumer products or modified consumer services, resulting new products or new services, instead of distributing original products or services, they are strictly liable to consumers for damages.
(3) Business entities engage in importing consumer products or services: Business entities under this category are strictly liable to consumers for damages. Because the Consumer Protection Act explicitly provides that a business entity which engages in importing consumer products or services is treated as the designer, producer and manufacturer of consumer products or the provider of consumer services. Therefore, business entities under this category are strictly liable to consumers for damages. (Article 9 of the Consumer Protection Act)
(4) Media entities engage in advertising: Business entities under this category shall only be liable to consumers for reliance damages. When Media entities which engage in advertising know or should have known that the content of the advertisement is false, they shall be liable to consumers for damages caused by relying upon the advertisement. (Article 23 of the Consumer Protection Act)

16.What is a “standard form contact”?
A standard form contract is a contract containing fixed contract terms. (In France, it is called adhesion contract. In England, it is called standard contract). Currently, standard form contracts are increasingly popular among businesses, and have become a common type of contract for modern trade. According to Article 2, Paragraph 7 of the Consumer Protection Act, a “standard form contact” is a contract unilaterally drafted by the business entity and present to a large number of consumers, rather than a particular consumer. The Consumer Protection Act additionally requires that the drafter of the standard form contract must be a business entity, and the counterpart must be a consumer. Compare to the general understanding that a “standard form contact” is a contract containing fixed contract terms unilaterally drafted by the business entity, the Consumer Protection Act’s version of “standard form contact” is more restricted in application. The characteristics of the Consumer Protection Act’s version of “standard form contact”are:
(1) Fixed contract terms: Fixed contract terms are drafted unilaterally by business entities. The fundamental problem of standard form contracts is that business entities often take advantage of their financial superiority to draft extremely oppressive fixed contract terms and offer to consumers on a “take it or leave it” basis, resulting the parties’ unequal bargaining positions.
(2) Contract purpose: Business entities draft standard form contracts containing fixed contract terms so that they can sign the contract with a large number of counterparts (consumers). Standard form contacts are essential because they allow business entities to reduce the trading cost, increase the economic efficiency and speed up the sales transaction.

17.Whether fixed contract terms in standard form contracts are limited to written contract terms?
According to Article 2, Paragraph 2 of the Consumer Protection Act, fixed contract terms are contract terms unilaterally drafted by business entities and present to consumers. The standard form contract is not made with any particular consumer, but with a large number of consumers. Because fixed contract terms do not have to be in a particular style, therefore they are not limited to written contract terms.
(1) Fixed contract terms are not limited to written contract terms: the term of “fixed contract terms” referred to in the Consumer Protection Act are not limited to written contract terms. Contract terms manifested by subtitles, posters, signboards or other methods, may also constitute fixed contract terms.
(2) The validity of non-written fixed contract terms: Even when fixed contract terms are not in writing, they are still governed by the relevant provisions set forth in the Consumer Protection Act. Therefore, business entities cannot claim that they are exempted from the application of the Consumer Protection Act because the fixed contract terms they sign with consumers are not in writing.

18.What is the validity of standard form contracts offered by business entities to consumers with a reasonable period of inspection?
According to Article 11 of Enforcement Rules of the Consumer Protection Act, business entities which use standard form contracts containing fixed contract terms must offer consumers a reasonable period of time to inspect the content of all fixed contract terms before signing the contract with consumers. If business entities fail to do so, those fixed contract terms will not become part of the contract. If business entities have offered consumers a reasonable period of time to inspect the content of all fixed contract terms before signing the contract with consumers, the following legal consequences will result:
(1) those fixed contract terms inspected by consumers will become part of the contract: In general, if business entities have offered consumers a reasonable period of time to fully inspect the content of the fixed contract terms before signing the contract with consumers, those fixed contract terms inspected by consumers will become part of the contract because consumers have been given an opportunity to carefully consider those fixed contract terms. However, if consumers fail to notice or recognize the fixed contract terms contained in the contract because of their typeface, those fixed contract terms will not become part of the contract. (Article 20 of Enforcement Rules of the Consumer Protection Act)
(2) The validity of the fixed contract terms inspected by consumers: The validity of the fixed contract terms inspected by consumers will become an issue only after they become part of the contract. The validity of the fixed contract terms will be governed by relevant provisions set forth in the Consumer Protection Act. The fixed contract terms inspected by consumers are generally valid except in the following situations:
(i) the fixed contract terms are unfair and oppressive to consumers and may be void on grounds of unconscionability. (Article 12 of the Consumer Protection Act)
(ii) the general terms are void if they are in conflict with the specific terms. (Article 15 of the Consumer Protection Act)
(iii) The contract will not be invalid per se when part of the contract is void. The entire contract will become void only when the contract is unconscionable. (Article 16 of the Consumer Protection Act)

19.What actions may the competent authority take when it consider a business entity’s advertisement is false and misleading?
(1) According to Article 24 of Enforcement Rules of the Consumer Protection Act, the competent authority may order the business entity to prove the truthfulness of its advertisement if the competent authority consider the business entity’s advertisement is false and misleading, sufficient to adversely affect consumers’ rights and interests safe consumer products.
(2) According to Article 21 of the Fair Trade Act, an enterprise shall not make, on products or in advertisements relating thereto, any false or misleading representation. If an enterprise violates the provisions set forth in the Fair Trade Act, the Fair Trade Commission may order such enterprise to cease its violative acts or to ratify its acts within a given time.
If the enterprise fails to comply with the order, the Fair Trade Commission may continue to order the enterprise to cease its violative acts or to ratify its acts within a given time and impose fine of not more than one million consecutively until the enterprise complies with the order.

20.When a consumer suffered from injuries caused by a false advertisement, from whom may the consumer recover damages?
If a consumer suffered from injuries caused by relying upon a false advertisement, the consumer may recover damages from the following business entities:
(1) Business entities: According to Article 23 of the Consumer Protection Act, a consumer who suffered from injuries caused by a false advertisement may recover reliance damages from the business entity running the advertisement.
(2) Media entities: According to Article 23 of the Consumer Protection Act, if a media entity which engages in advertising knows or should have known that the content of the advertisement is false, it shall be jointly and severally liable to consumers for damages caused by relying upon the advertisement with the business entity running the false advertisement.
(3) Advertising companies: According to Article 21, Paragraph 4 of the Fair Trade Act, if an advertising company which engages in designing or producing advertisement knows or should have known that the content of the advertisement is false and misleading, it shall be jointly and severally liable to consumers for damages caused by the false advertisement with the business entity running the false advertisement.