A new regime for preventing and fighting unauthorized financial activity and consumer protection was approved with the aim of creating a safer environment for consumers. The new regime will come into force on January 1, 2022.

This law  (Law 78/2021) imposes several duties, the most notorious being those of abstention, communication and  denunciation, also introducing serious obligations applicable to economic operators in the advertising industry, which include the media, and also to those involved in loan agreements and other similar contracts that may involve an unauthorized regulated activity.

With regard to the duties of abstention, which apply to any citizen, the law  imposes that upon becoming aware of the advertising, offering, provision, marketing or distribution of financial products, goods or services by a person or entity that is not legally authorized, citizens must abstain from disseminating, advising or recommending the products, goods or services in question, and must report such occurrences to the Insurance and Pension Funds Supervisory Authority, the Bank of Portugal or the CMVM as soon as they become aware of them.

With regard to advertising, the new law reinforces that advertising for the sale of products, goods or financial services can only be carried out by an entity that is authorized for this activity or by a person acting on its behalf.

Moreover, advertisers and credit intermediaries, when contracting advertising, will now have to demonstrate their registration with the Bank of Portugal as an authorized entity. They will also have to submit a declaration with a summary description of compliance with the principle of lawfulness imposed on them with regard to advertising and consumer information.

On the other hand, media entities and websites of a commercial, editorial, journalistic or other nature, as well as advertising professionals or agencies will now be responsible for verifying the veracity of the information provided and for inserting in advertisements the respective registration number of the applicant entity. In certain cases, they may have to refuse the distribution of the advertising message and immediately communicate to the competent financial supervisory authority the refused request, including the content of the advertising and the identification data of the applicant. Failure to comply with these rules is punishable by a fine ranging from €1,750 to €45,000 depending on whether the offender is a natural or legal person.

Finally, such entities may also have to directly consult the competent financial supervisory authority in order to confirm the veracity of the identity of the registered entity and the legal legitimacy to promote the advertisement, before accepting the advertisement or advertising message in question.

This Law also imposes additional duties on registrars, notaries, solicitors, lawyers, registration officers or chambers of commerce and industry who intervene in acts, contracts or documents that may be related to, among others, the attempt or exercise of unauthorized financial activity in leasing contracts, such as loan agreements.

Moreover, as of March 1, 2022, these entities will have to electronically communicate to the Bank of Portugal information on certain public deeds, notarized private documents or documents with a signature recognized by them in which they intervene.

The new law also provides for a special duty of reference in civil loan agreements over 2500 (euros), whereby the money loaned must be delivered by means of a bank instrument and the document must state the date and the bank instrument used, as well as the information necessary for its documental or computer traceability.

On the other hand, with the entry into force of the new law, the financial supervision authorities may preventively order the blocking of access to websites or the domain name system, or even the removal of certain specific illicit content that have as their object the attempt, promotion or marketing of products and goods, as well as the provision of financial services by unqualified entities.

Finally, it should be noted that, as a result of the new legal element, convictions in criminal or administrative proceedings that have become final and not appealable and relate to the attempt to or the performance of unauthorized financial activity will now be published on the websites of the financial supervision authorities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.