Prevention Before Sanction: The Business Value of Respecting Consumers’ Rights of Withdrawal, Waiver, and Retraction
In today’s consumer relationships, compliance with legal provisions should not be viewed merely as a legal obligation, but rather as a strategic tool to strengthen consumer trust and significantly reduce business risks. In this regard, the Consumer Protection Law grants consumers certain rights that allow them to withdraw from specific contractual relationships under particular circumstances. These rights give rise to the concepts of withdrawal and the right of retraction.
Although these rights are often perceived as mechanisms that solely protect consumers, they also represent an opportunity for companies to properly manage consumer dissatisfaction before it escalates into claims before the Consumer Protection Authority, which could lead to administrative sanctioning proceedings, potential fines, and even reputational damage to the company.
To begin, it is important to define the right of withdrawal. This right allows consumers to render a contract entered into with a supplier ineffective through an “express statement of their will.” To exercise this right, it is sufficient for the consumer to notify the supplier in writing. The supplier, in turn, is obligated to receive the request and provide proof of receipt.
When the consumer exercises this right, the supplier must refund the amounts paid, without prejudice to its right to retain only an amount corresponding to “administrative expenses.” However, such retention may not exceed the statutory commercial interest calculated on the amount paid and the period elapsed from payment until withdrawal.
The Consumer Protection Law makes a significant distinction between withdrawal and waiver. Waiver applies only in cases where there is a delay in the delivery of a good or in the provision of a service by the supplier. In such cases, the consumer may waive the right to receive the contracted good or service and demand the refund of the full amount paid, plus compensation calculated by applying the applicable statutory commercial interest.
On the other hand, the aforementioned law recognizes the right of retraction, which empowers consumers to unilaterally render a contract ineffective without having to justify their decision and without such decision resulting in any penalty. However, this mechanism applies only in three scenarios: contracts entered into outside the commercial establishment, distance contracts, and cases in which the supplier has recognized this right in the offer, advertising, or contract.
In this regard, the law establishes that consumers may exercise this right provided that the service has not yet begun to be rendered and no more than eight days have elapsed since the contract was entered into.
Based on the foregoing, it is important to highlight that, as a consumer protection mechanism, the law declares null and void any contractual clauses that impose fines, penalties, or disproportionate charges for the exercise of the right of retraction. Therefore, the law only recognizes the supplier’s right to recover administrative expenses authorized by law, calculated in accordance with the statutory commercial interest.
In this context, once the right of retraction has been exercised in compliance with the aforementioned requirements, the supplier is obligated to refund the amounts paid by the consumer within a maximum period of fifteen days.
From a business perspective, the rights of withdrawal, waiver, and retraction should not be interpreted as commercial obstacles. For this reason, it is necessary for companies to have procedures in place to receive requests, properly process claims, and provide timely responses in accordance with the law.
At Lexincorp, we have a highly specialized legal team in consumer protection matters. We advise companies in the design and strengthening of their internal mechanisms for customer service and claims management, as well as in the review and adaptation of contracts, policies, and procedures to ensure compliance with current regulations. Likewise, our litigation department provides comprehensive support in the resolution of consumer disputes.
