Asunción, Paraguay – The Paraguayan Secretariat of Consumer and User Protection (SEDECO) has taken a strong stance on consumer rights protection by imposing a substantial fine of approximately ₲60 million on a prominent telecommunications company. This hefty penalty serves as a powerful deterrent against unfair practices, specifically the attempt to list a consumer as a defaulter for a non-existent debt, thus reaffirming the crucial role of consumer protection agencies.
SEDECO confirmed that the telecom company violated Articles 6 (d), (f), and (i) of Consumer Protection Law 1334/98 and imposed a fine of ₲59,194,850, equivalent to 550 days' wages. This outcome clearly demonstrates the company's unfair conduct and is seen as a significant warning against exploitative business practices, particularly those targeting consumers.
The incident began when a consumer decided to terminate their contract due to poor internet service quality. However, even after the service termination, the telecom company continued to pressure the consumer by persistently billing them and demanding payment for a non-existent debt. The victim specifically alleged that Núcleo S.A., known by the brand name "Personal," coerced them into signing a contract termination acknowledging the debt and threatened to report them to Informconf, a credit information system operated by Equifax, Paraguay's major credit reporting agency, which significantly impacts an individual's credit history.
Despite SEDECO's mediation efforts, Núcleo S.A. failed to attend the conciliation hearing. During subsequent notification procedures, the company was ultimately compelled to waive the non-existent debt. This action is interpreted as a de facto admission by the telecom company that the charges were unwarranted.
In addition to the fine, SEDECO ordered the company to improve its service provision procedures, especially its consumer complaint handling process, and to provide appropriate and immediate solutions for any disputes that arise. The agency, led by Minister and Secretary General Sada Delia Irún, reported recovering a total of ₲2,026,245,929 through consumer rights protection efforts in 2024 alone. The company has currently appealed to the Court of Accounts, and related legal proceedings are ongoing.
Increasing Unfair Practices and Consumer Complaints
Last year, consumer complaints regarding unfair practices by suppliers significantly increased in Paraguay. In 2024, SEDECO received a total of 8,601 consumer consultations, an 18.6% increase compared to 7,250 in 2023. This indicates that consumers are becoming more aware of their rights and are showing a greater willingness to actively address unfair conduct.
According to a report published by SEDECO, the five main sectors accounting for 73% of all complaints in 2024 were: financial services and insurance (29%), telecommunications (22%), home appliances and electronics (9%), health (8%), and the automotive sector (4%). In addition, complaints were filed in various other sectors, including those related to the "Do Not Disturb" law (Law No. 5830) (3%), tourism (3%), real estate (2%), transportation (2%), food and beverages (2%), information technology products (2%), energy and fuel (1%), education (1%), and clothing (1%), with other categories making up 12%.
This incident serves as a warning against the unfair practices consumers may face in the Paraguayan telecommunications market and highlights the increasing importance of consumer protection agencies. It particularly re-emphasizes that billing after contract termination and pressuring consumers through credit information systems are unethical business practices that should be strictly prohibited.
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