A Warranty Does Not Always Guarantee

Introduction

Whenever we buy a product or hire a service, the first things we check are the price, the features, and—perhaps most importantly—the “warranty.” That word gives us peace of mind, knowing that if something goes wrong, we’ll be protected. But in practice, it doesn’t always work that way. Sometimes what the advertisement promises is not the same as what the fine print in the contract or receipt says.

In Panama, as in many other countries, warranties are regulated, but they are not always well understood by consumers or properly enforced by businesses. In this edition, we’ll take a closer look at the subject and aim to clarify some key concepts.

Legal Warranty vs. Commercial Warranty

Legal warranty: This is the protection the law grants consumers by default. In Panama, it is established in Law 45 of 2007 and the regulations of ACODECO (Consumer Protection and Competition Defense Authority). In Panama, a warranty cannot be less than what the law requires, and it protects against manufacturing or operational defects for a reasonable period depending on the type of product or service.

Example: You buy a new refrigerator. Law 45 of 2007 establishes that you have the right for the product to work correctly for a reasonable time, depending on the type of good. If the compressor breaks down after three months without any misuse, the provider is obligated to repair it at no cost, replace it with a new one, or refund your money. It doesn’t matter if the store didn’t “offer” a warranty—by law, you already have one.

Commercial warranty: This is an additional or voluntary warranty offered by the manufacturer or provider. It can extend the time or conditions of the legal warranty, but never reduce them.

Example: You buy a laptop, and the manufacturer offers a “3-year extended warranty” if you register the product on their website and meet certain conditions. This does not replace the legal warranty granted by Panamanian law; it simply extends it beyond the minimum legal period, providing extra coverage for manufacturing defects or hardware failures.

The role of ACODECO in Panama

The Consumer Protection and Competition Defense Authority (ACODECO) is responsible for ensuring warranties are honored. Its functions include:

• Receiving and processing warranty-related complaints.
• Inspecting businesses to ensure legal compliance.
• Sanctioning providers who offer misleading or unfulfilled warranties.

Real figures

In 2024, warranty breaches were the second most common type of complaint filed by consumers with ACODECO. A total of 841 claims were registered, amounting to approximately B/. 6,193,592.04—showing this is not an isolated problem, but a persistent issue affecting many people.

Most affected sectors (2024):

• New car sales: 191 complaints.
• Used car sales: 119 complaints.
• Automotive repair shops: 91 complaints. These sectors are among the most frequently reported by consumers.

Consumer rights in Panama

Panamanian law states that all consumers have the right to:

• Receive goods or services free of defects.
• Free repairs during the warranty period.
• Product replacement if repairs are not possible within a reasonable time.
• Refunds when repair or replacement is not possible.

Consumer duties

• Keep the invoice or proof of purchase (without it, filing a claim is almost impossible).
• Use the product according to the manufacturer’s instructions.
• File a claim within the established warranty period.
• Document the defect with evidence (photos, videos, technical reports).

What to expect (and what not to)

You can expect: repair, replacement, or refund, as applicable. You cannot expect: coverage for damage caused by misuse, accidents, or unauthorized modifications.

International comparison

• European Union: Minimum 2 years of legal warranty for consumer goods, at no cost to the buyer.
• United States: No uniform period; each state regulates, but “implied warranties” protect against basic defects.
• Latin America: Varies from 3 months (in some countries) to 1 year, but enforcement is uneven.

Conclusion

In Panama, a warranty is a right—but also a legal tool that only works if the consumer exercises it correctly and the provider respects it. The key: know the rules, read the fine print, and never rely solely on advertising claims.

The Fine Print doesn’t tell you what to buy… but it does tell you how to read what you’re being sold.