'Businesses that mislead shoppers should pay'
Finance Committee okays bill imposing fines of up to NIS 50,000 on businesses that violate Consumer Protection Law
The Knesset's Finance Committee authorized on Monday an amendment to the Consumer Protection Law which will greatly benefit the Israeli consumer. According to the amended bill, which is set to be put through its second and third reading in the near future, business owners who violate the Consumer Protection Act are at risk of receiving a NIS 50,000 ($12,765) fine.
The Consumer Protection Law applies to both the seller of a product as well as its manufacturer. The main duty set by the said law is the duty not to mislead a consumer as to any matter material to the transaction, including the nature of the product, its ingredients, etc.
Despite opposition to the bill, which was mainly voiced by major retail chains in Israel, the new clause which dictates the various penalties to be imposed on chains who violate the law has remained intact.
The retail chains mainly voiced their concern over the possibility of facing accumulating fines which could reach up to millions of shekels for just a slight technical error.
MK Yoel Hasson (Kadima), who is a member of the Finance Committee, responded to the opposers, saying that "they brought it (the punishment) upon themselves after turning the market into an unsupervised arena where the consumer is constantly at a disadvantage."
The amendment to the law intends to increase the Israel Consumer Council's jurisdiction over the application and regulation of consumer protection, and will also enable the council to impose fines on sellers or manufacturers who are in breach of the law.
In the committee's recommendations, violation of the Consumer Protection Law can serve as a basis to a NIS 10,000- 50,000 fine, depending on the severity of the offence and the size of the business.
Furthermore, the total amount of the fine could increase by 25% per day for any additional breach of the law.
MK Hasson said it is unreasonable for a local supermarket to be subjected to the same fine as a major retail chain.
Attorney Ronit Pearl of the Industrialists Association claimed that the severity of the fines suggested in the amendment could bring about the closure of small business. Attorney Shosh Rabinowitz of the Chamber of Commerce further said that the fine is not fitting with the offence.
The law prohibits the misleading of the consumer in various ways including the packaging of the product, advertising it and labeling of the product.
"The business world is changing. Consumers are aware of their rights," said Hasson adding that "businesses will have to adapt to the new regulation because the consumers cannot continue to pay for their mistakes."
