(No ) AN ACT

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1 (H. B. 114) (No ) (Approved July 23, 2017) AN ACT To amend Section 9 of Act No. 5 of April 23, 1973, as amended, known as the Department of Consumer Affairs Organic Act, to require the aforementioned department to publish on its website and make available to the public in its regional offices, information related to any complaints filed by individual consumers, groups of consumers, Department officials, or other officials of the Government of Puerto Rico against any commercial establishment where business transactions for goods and services are carried out including, but not limited to, the status thereof and the name of the merchant against whom the complaint was filed, the number of complaints filed against such person or establishment once it has been settled; and for other related purposes. STATEMENT OF MOTIVES Act No. 5 of April 23, 1973, as amended, known as the Department of Consumer Affairs Organic Act, empowers the Secretary to address, investigate, and resolve claims and complaints filed by the consumers of goods and services acquired or received from the private sector of the economy. Likewise, it empowers the Secretary to enforce, fulfill, and defend the rights of the consumers, just as they are contained in the laws in effect, through an administrative adjudication structure with full powers to settle complaints brought before his consideration and to grant the pertinent remedies according to law.

2 2 Consistent with the foregoing, and with the goal of protecting the rights of consumers from false or misleading practices and advertisements related to goods or services offered by a business, the Regulations Against Misleading Practices and Advertisements, were promulgated to ban misleading practices and advertisements for the purpose of creating an environment of trust and respect between merchants and consumers. Unfortunately, despite the protections in place for consumers, there are still businesses that employ grandiloquent advertising campaigns to attract consumers which are either partially or completely fraudulent or misleading, or that portray a good or service in a false or incorrect manner. It has been publicly stated that whenever any of these businesses is fined by the Department, little is known with regards to the final settlement of these claims or complaints. This creates a sense of impunity, something that should not exist in society. In light of the foregoing, we deem it appropriate for the administrative division to hear complaints, which was created in order to receive, hear, and settle complaints filed by individual consumers, groups of consumers, and officials of the Department or other officials of the Commonwealth of Puerto Rico for violations of the consumer protection laws or the provisions thereof, to publicly disclose its process. Furthermore, it is known that these last years DACO has suffered a significant reduction in the number of employees it has available to educate consumers and oversee businesses. According to data from the Department s annual budget reports, in 2008, DACO had 379 employees. However, by 2016, the number of employees in the Department had gone down to 166, which represents a reduction of over fifty percent (50%). As the Department has indicated in the past, the reduction in personnel has not only affected the administrative positions, but also other positions

3 3 that are essential for DACO to perform its oversight duties as are the weights and measures inspectors, oversight positions, engineers in training, and complaint investigators. The foregoing attests to the need for new or different ways to inform consumers and safeguard their best interests. A legitimate and ideal way to inform consumers and protect their best interests is to provide them with access to information on the number of complaints that have been filed with DACO against merchants or other entities under the jurisdiction of the Department. This shall place consumers in a better position to determine which merchants to support because they shall be able to identify those that cause more problems to consumers and those that are less problematic. Furthermore, this initiative shall promote an environment in which merchants are more compliant with the laws and regulations that protect consumers because the public disclosure of the number of complaints filed with DACO against their businesses could potentially affect sales. Therefore, this legislation requires the Department of Consumer Affairs to publish on its website, and to make available to the public in its regional offices, information related to complaints filed by individual consumers, groups of consumers, Department officials, or other officials of the Government of Puerto Rico against any commercial establishment where business transactions for goods and services are carried out including, but not limited to, the status thereof and the name of the merchant against whom the complaint was filed, the number of complaints filed against such person or establishment once it has been settled; and for other related purposes.

4 4 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF PUERTO RICO: Section 1.- Section 9 of Act No. 5 of April 23, 1973, as amended, is hereby amended to read as follows: Section 9.- Administrative Division for the Hearing Of Complaints The Secretary shall establish an administrative division in the Department in order to receive, hear, and settle complaints filed by individual consumers, groups of consumers, and officials of the Department or other officials of the Commonwealth of Puerto Rico for violations of the consumer protection laws or the provisions thereof. Likewise, the Secretary is hereby ordered to publish on the Department s website and to make available in its regional offices, the information related to any complaints filed by individual consumers, groups of consumers, Department officials, or other officials of the Government of Puerto Rico against any commercial establishment where business transactions for goods and services are carried out including, but not limited to, the status thereof and the name of the merchant against whom the complaint was filed and the number of complaints filed against such person or establishment once it has been settled. Information related to any complaint that has been settled shall be kept on the website of the aforementioned public entity for a term of not less than five (5) years. Moreover, the Department shall inform through its website the mechanisms available and the requirements for citizens to file complaints. Section 2.- The Secretary of Consumer Affairs shall adopt the regulations deemed necessary or convenient to implement this Act within ninety (90) days as of the effective date thereof. Section 3.- This Act shall take effect one hundred and twenty (120) days after its approval.

5 5 CERTIFICATION I hereby certify to the Secretary of State that the following Act No (H. B. 114) of the 1 st Regular Session of the 18 th Legislative Assembly of Puerto Rico: AN ACT to amend Section 9 of Act No. 5 of April 23, 1973, as amended, known as the Department of Consumer Affairs Organic Act, to require the aforementioned department to publish on its website and make available to the public in its regional offices, information related to any complaints filed by individual consumers, groups of consumers, Department officials, or other officials of the Government of Puerto Rico against any commercial establishment where business transactions for goods and services are carried out including, but not limited to, the status thereof and the name of the merchant against whom the complaint was filed, the number of complaints filed against such person or establishment once it has been settled; and for other related purposes. has been translated from Spanish to English and that the English version is correct. In San Juan, Puerto Rico, on this 13 th day of December, Orlando Pagán-Ramírez Director