Countries › Paraguay › Guide › 14. Disputes › Consumer claims in Paraguay: Ley 1334/1998, abusive clauses, prepayment of credit and collective actions

Consumer claims in Paraguay: Ley 1334/1998, abusive clauses, prepayment of credit and collective actions

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-28 · Status: Stable

Consumer rights under Ley 1334/1998 cannot be waived; the law covers individuals and companies buying as final users, including banking, credit and insurance services, but not regulated liberal professions. Abusive clauses, including compulsory arbitration, automatic renewals and unilateral changes, are void, and consumers may prepay credit at any time without penalty, paying only accrued interest. Claims can be brought individually or collectively by consumers, registered consumer associations, the authorities and the public prosecutor, and judges can order product withdrawals, closures and compulsory fines.

USD figures use PYG 5,868.31 per US dollar, the Banco Central del Paraguay reference quotation published for Wednesday 28 October 2026. Conversions are for orientation only.

Key facts

Consumer protection statute	Ley 1334/1998 (promulgated 27 October 1998) Ley 1334/1998, as of 2026-10-28 · in force
Consumer rights waivable by contract	No Ley 1334/1998 art. 2, as of 2026-10-28 · in force
Companies can be consumers	Yes, as final recipients Ley 1334/1998 art. 4 a, as of 2026-10-28 · in force
Compulsory arbitration clause in consumer contracts	Void Ley 1334/1998 art. 28 d (Ley 5427/2015), as of 2026-10-28 · in force
Automatic renewal unless consumer objects	Void Ley 1334/1998 art. 28 l (Ley 5427/2015), as of 2026-10-28 · in force
Prepayment penalty on consumer credit	Prohibited Ley 1334/1998 art. 30 (Ley 6624/2020), as of 2026-10-28 · in force
Collective consumer actions	Yes, by associations, authority and prosecutor; damages only by affected consumers Ley 1334/1998 art. 43, as of 2026-10-28 · in force
BCP reference rate used for conversions	5868.31 PYG per USDBCP planilla 28 October 2026, as of 2026-10-28 · in force

The rule

1. Scope and non waiver. The law protects consumers and users in their dignity, health, safety and economic interests. Its rights cannot be waived, settled or limited by contract and prevail over any contrary rule, practice or term. It applies to all transactions between suppliers and consumers. A consumer is any natural or legal person, Paraguayan or foreign, acquiring or using goods or services as final recipient; services include banking, financial, credit and insurance services, but not employment, and services of liberal professionals requiring a university degree and registration are excluded except their advertising. Suppliers include foreign persons importing, distributing or selling to consumers.
Cost to do it: Compliance cost of reviewing standard terms; no registration fee in the law.
Example: A Paraguayan small company buying a car for its own use is a consumer; a car dealer buying for resale is not. / A foreign e commerce seller shipping US$500 (PYG 2,934,155) orders to Paraguayan buyers is a supplier under art. 4 b).Ley Nº 1334/1998, De Defensa del Consumidor y del Usuario, Art. 1, 2, 3 and 4, 1998-10-27 official text · verified 2026-10-28

2. Abusive clauses. Clauses are void by operation of law and cannot be enforced against the consumer if they: distort obligations or exclude liability for damage; waive or restrict consumer rights or expand the supplier's; reverse the burden of proof against the consumer; impose compulsory arbitration; allow unilateral price or term changes, or unilateral alteration or termination except as the law provides; breach environmental rules; waive reimbursement of costs legally borne by the supplier; impose unfair or excessively burdensome conditions; let the supplier cancel a transaction where the price was misleading advertising; allow suspension of a service without notice; automatically renew fixed term contracts unless the consumer objects; or treat silence as acceptance. Judges may set such clauses aside.
Cost to do it: Redrafting adhesion contracts; void clauses expose the supplier to damages and sanctions.
Example: A gym contract that renews automatically for another year unless the member cancels is void on that point (art. 28 l). / An arbitration clause in a US$2,000 (PYG 11,736,620) consumer software subscription cannot be enforced against the consumer (art. 28 d).Ley Nº 1334/1998, art. 28 as amended by Ley Nº 5427/2015, Art. 28 a) to m); art. 51 num. 8, 2015-04-30 official text · verified 2026-10-28 · changed: Ley 5427/2015 (promulgated 30 April 2015) rewrote art. 28, adding automatic renewal, silence as acceptance and service suspension without notice to the list of void clauses.

3. Prepayment of credit. In any credit sale or service on credit, the consumer may prepay all or part of the debt with a proportional reduction of interest, meaning unaccrued interest is not charged, and prepayment cannot be obstructed, limited or subject to any penalty however named. The interest payable is only that accrued at the date of payment, without other charges, and the nominal annual rate must be stated in the contract. On notice of intent to prepay, the supplier must immediately issue a clear, detailed liquidation of the debt at the payment date. The rule applies to all term obligations from the day after publication, and SEDECO, the consumer protection secretariat, was charged with regulating it.
Cost to do it: Lenders cannot charge prepayment fees on consumer credit; the cost is lost future interest.
Example: A consumer with a PYG 58,683,100 car loan who repays early pays only interest accrued to that date, with no penalty. / On a US$10,000 consumer loan, a prepayment fee clause of 3 percent (US$300) is unenforceable.Ley Nº 1334/1998, art. 30 as amended by Ley Nº 6624/2020, Art. 30; Ley 6624 art. 2 and 3, 2020-10-15 official text · verified 2026-10-28 · changed: Ley 6624/2020 (promulgated 15 October 2020, published 4 November 2020) rewrote art. 30 to ban any prepayment penalty and require an immediate payoff statement.

4. Enforcement and claims. The law names the Ministry of Industry and Commerce nationally and municipalities locally as enforcement authorities, with powers to receive complaints, inspect, request information and hold hearings acting first as conciliator; later laws place SEDECO in charge of regulating the 2020 prepayment rule. Rights can be defended individually or collectively for diffuse or collective interests; standing belongs to consumers, registered non profit consumer associations meeting independence requirements, the national or local authority and the public prosecutor, but damages may only be claimed by the affected consumers. Judges, at a party's request, may prohibit sale of infringing products, order seizure of dangerous ones, order cessation, temporary closure after a hearing, compulsory fines graduated to the offender's wealth, publication of judgments at the offender's cost, and annulment of abusive clauses, and may order interim measures against flagrant violations, fining parties that seek them in bad faith. Telecom users have additional rights to itemized billing within one year and to end fixed term contracts at expiry without cost.
Cost to do it: Compulsory fines set by the judge in proportion to the offender's wealth; publication costs.
Example: A consumer association files a collective action against a bank's card fee clause; individual customers must sue themselves for damages. / A retailer ordered to stop a misleading US$100 (PYG 586,831) promotion can face compulsory fines until it complies.Ley Nº 1334/1998; Ley Nº 2340/2003; Ley Nº 6624/2020, Ley 1334 art. 40, 41, 43, 45, 46, 51 and 52; Ley 2340 (art. 54 and 57 as numbered by it), 1998-10-27 official text · verified 2026-10-28

Clause	Letter
Excludes or limits liability for damage	a
Reverses burden of proof	c
Compulsory arbitration	d
Unilateral price or term changes	e, i
Suspension of service without notice	k
Automatic renewal of fixed term contracts	l
Silence treated as acceptance	m

Selected void clauses under art. 28 (Ley 5427/2015)

Worked example

A foreign fintech launching consumer loans in Paraguay drafts its terms: it removes an arbitration clause (void under art. 28 d), drops a 2 percent prepayment fee (banned by art. 30), states the nominal annual rate, and sets up a process to issue an immediate payoff statement when a customer asks to prepay a PYG 58,683,100 (US$10,000) loan.

Step by step

Classify customers: final users, including companies, are consumers.
Review standard terms against the art. 28 list and remove void clauses.
For credit products, state the nominal annual rate and build a payoff statement process.
Prepare to answer complaints and conciliation hearings before the consumer authority.

Common traps

Business customers buying as final users are consumers, so B2B standard terms can be caught.
Arbitration clauses cannot be imposed on consumers despite the pro arbitration 2025 law (Ley 1334 art. 28 d, as amended by Ley 5427/2015).
The BACN text of Ley 1334 still names the Ministry of Industry and Commerce as authority; Ley 6624/2020 refers to SEDECO, and the SEDECO statute was not verified for this page.
Ley 2340/2003 inserted a telecom chapter from art. 53 and renumbered later articles, so final articles of the original text carry new numbers.

Sources

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