Consumer Protection Code
Since the laws were created, there are laws to protect the consumer. The code of Hamurabi, the first written law of history, was already telling what to do with the mason who badly erected walls and houses. The Brazilian Constitution of 1988 covers consumer rights in one of its first articles, but only two years later, in 1990, the Consumer Protection Code (CPC) was promulgated.
But what are the reasons for such care? Although trade is one of the most frequent and important activities of the civil contract, there is an asymmetry between the two parties involved in this contract, which constitutes a purchase and may be implicit or explicit. The seller has specific skills such as market knowledge, and especially knowledge of the product and how it was made, which the product buyer, in turn, does not have. Usually it is a company, with resources and strengths that are lacking to the simple consumer. The law, then, corrects this imbalance to maintain trust, the base of Economy. The Brazilian Consumer Protection Code explains this reason, making clear that in a dispute between buyer and seller, the Code will be more favorable to the buyer, who is always considered the most fragile.
The law establishes general principles, but also goes into detail in very practical situations: it prohibits the combined sale, specifies that each undue payment is doubled, guarantees the possibility of repentance from Internet and telephone purchases within 7 days, gives the right to the consumer to maintain a minimum amount for survival in case of debt renegotiation, etc. Another significant aspect of Brazilian law is the creation of the National System to defend defined rights. Thus were born PROCON, Inmetro, public defenders, Justice Prosecutors, specialized Police Stations and consumer associations.
Proof that the law introduced an effective change was the resistance found to its acceptance. Several entities tried to escape from its area of activity. What was the clearest example of this situation? It was banks, that having resources, stayed for a long time without complying to CPC. This resistance ended only in 2006 with a decision of the Federal Supreme Court.
The Consumer Protection Code then became a “strong” law. Therefore, in order to escape the consequences imposed by not complying with it, it is fundamental to take good care of the client, in order to maintain the sustainability of the enterprise. It is much easier to sell to someone that is already a customer. Word of mouth is still the most effective (and inexpensive) form of advertising. Deceiving the customer, making false advertising and hiding behind abusive clauses, appear to be advantages at first. However, such actions put the company at risk. Going against consumer protection laws, besides being illegal, is bad business.
Increasingly technology empowers the consumer. Negative remarks in excess leave you out of Google’s search results, the modern equivalent of capital punishment. Customers bad mood is not lost. It is recorded in the Reclame Aqui (Complain Here) site for decades. And one of the first information that Facebook brings about your business is how fast you answer the questions you receive. The technological mechanism is gaining strength in such a way that the demand for explicit laws is less and less perceived. A clear example of this situation is that in order for a “traditional” taxi driver to exercise his profession, a certificate proving that he is fit to drive is needed. In the case of a Uber driver, it is enough to see his rating.
At the same time, technological advances allow all companies to have tools to manage customer relationships. Until a few years ago only large companies could use SAP or PeopleSoft to keep the history of the contacts with each customer and make each interaction right, adequate and convincing. There are now hundreds of online CRM services and the problem for a small business has paradoxically become to choose one of them.
It remains the basic principle: the company exists for its customers and the clearer it is for all those who works for it, the better your performance and the higher your profit. The execution, on the other hand, has changed: ignore the digital world and get ready for bad surprises.