The Lower House Approves Changes to Credit and Debit Card Regulations
The Chamber of Deputies has recently approved a reform that tightens rules for banks and businesses regarding credit and debit cards. The aim is to curb unauthorized charges, streamline cancellations, and enhance transparency for users.
Background on the Issue
For years, these areas have been a recurring source of user complaints. Hidden fees, unsolicited services, vague contracts, and complicated cancellation processes have been persistent issues. The reform seeks to address these concerns by imposing explicit obligations on financial institutions and commercial entities.
Key Changes in the Reform
- Prohibition of Unauthorized Charges
- Explicit Consent Required for Charges
- Increased Transparency in Costs and Fees
Card issuers must provide clear, accurate, and comprehensive information about all associated costs and charges, adhering to principles of transparency, good faith, and user protection.
- Simplified, Instantaneous, and Cost-Free Cancellations (24/7)
- Nullification of Unsolicited Cards
Financial institutions and businesses will no longer be able to charge for unauthorized services, memberships, insurance, or additional benefits that were not previously agreed upon in the contract or for which the user did not give explicit consent.
During the contracting process, if a bank or business cannot clearly demonstrate that the user has agreed to a service, they will not be able to generate any charges or commissions.
Cancellations must be possible through in-person, telephone, and digital channels. A visible cancellation button should be available on applications, online banking, and web portals at all times. The process must be completed within five days of the request, without charges or penalties, and a digital or physical confirmation must be provided within five business days.
Any card issued without the user’s explicit consent is considered null and void. There will be no need for cancellation, and financial institutions must refrain from issuing payment methods without authorization, subject to applicable sanctions.
Impact of the Reform
The approved reform sets a stricter framework for credit and debit card operations, establishing clear obligations for financial institutions and commercial entities to prevent practices that negatively affect users. The reform aims to protect consumers by eliminating hidden fees, ensuring clear communication of costs, and simplifying the cancellation process.
Next Steps
The approved resolution has been sent to the Senate of the Republic for review and subsequent discussion.
Key Questions and Answers
- What is the main goal of this reform? The primary objective is to protect users from unauthorized charges, simplify cancellation processes, and increase transparency in credit and debit card operations.
- What specific changes does the reform introduce? The reform prohibits unauthorized charges, requires explicit user consent for any new services, mandates clear communication of costs and fees, simplifies the cancellation process, and nullifies unsolicited cards.
- How will this reform impact users? Users can expect fewer surprise charges, clearer information about costs and fees, easier cancellation processes, and protection against unsolicited cards.
- What happens next after the Chamber of Deputies’ approval? The reform will now be reviewed by the Senate of the Republic before further discussion.
