Decree-Law no. 195/99, of 8 of June

Presidência do Conselho de Ministros (Presidency of the Council of Ministers)


The protection of consumer rights - consecrated in the Constitution of the Portuguese Republic - has been carefully regulated with a view to the creation of efficient means of promoting clear and just rules in a growing global market.

Law no. 23/96, of July 26th, created certain mechanisms in the Portuguese judicial system aimed at protecting those using essential public services, covering the supply of gas, water, electricity and the telephone service.

Thus, a market with very special characteristics was clearly identified and whose functioning demonstrated a significant imbalance that was prejudicial to the contractual position of the consumer, given that it was a market providing services that are basic, universal and essential to modern life in which the consumer had no negotiating power in situations often identified as 'natural monopolies'.

It is important that access to these services is constantly being made clearer, normally established through pre-defined subscription contracts. In this situation, present legislation pays special attention to the controlling of guarantee deposits asked for as a contractual condition for connecting the home to essential public services.

It is reported that the practice of demanding a guarantee deposit for access to a service has been discontinued by operators, with no action being taken in cases of non-compliance by the consumer which, for example, would normally imply cutting off the supply of the service in question, previously seen as a rather underhanded way of financing the companies.

The National Association of Portuguese Councils was heard.


Under the terms of paragraph a) of no. 1 of article 198 of the Constitution, the Government decrees the following as a general law of the Republic:

Article 1

1 - The present order is applicable to contracts for the supply of those essential public services mentioned in no. 2 of article 1 of Law no. 23/96, of July 26th, where consumers shall be considered those as defined in no. 1 of article 2 of Law no. 24/96, of July 31st, whoever the supplier may be and in whatever form the respective service is supplied.

2 - The demand for any kind of guarantee deposit to ensure compliance with the obligations arising from the supply of these essential public services mentioned in the previous number is expressly forbidden.

3 - That laid down in the previous numbers does not prejudice the autonomy of local councils.

Article 2
Guarantee deposit in case of non-compliance

1 - The suppliers of essential public services mentioned in article 1 may only demand a guarantee deposit in situations of re-establishing supply of the service in question following interruption through contractual non-compliance on the part of the consumer.

2 - The guarantee deposit may be paid in cash, by cheque, electronic transfer or via a bank guarantee or insurance bond.

3 - The amount and method of calculating guarantee deposits will be fixed by the regulatory entities of the different essential public services or, in the absence of such, by the public entities responsible for the supervision or control of the respective sectors of activity.

4 - A guarantee deposit will not be required if the consumer opts to make payment for the services by bank transfer once the payment for non-compliance has been paid.

5 - Whenever the consumer who has paid a guarantee deposit under the terms of no. 1 opts later to make payments by bank transfer, the guarantee deposit must be refunded under the terms of article 4.

Article 3
Use of the guarantee deposit

1 - The supplier must use the guarantee deposit to offset the amounts owed by the consumer.

2 - Once the guarantee deposit has been used, the supplier may demand that it be made good again within a limit of not less than 10 weekdays, in writing, in accordance with the rules fixed under the terms of no. 3 of article 2.

3 - The use of the guarantee deposit under the above-mentioned terms does not allow the supplier to exercise his right to interrupt the supply, even when the amount of the guarantee deposit is not enough to cover the debt completely.

4 - The interruption of supply may occur under the terms of no. 2 of article 2 of Law no. 23/96, of July 26th, if in the sequence of the interpellation referred to in no. 2, the consumer does not make the guarantee deposit good again.

Article 4
Restitution of the guarantee deposit

1 - At the end of the contract, and by any legal or contractually established method, the guarantee deposit shall be returned to the consumer after deduction of any amounts that may still be outstanding.

2 - The amount to be returned will be updated in relation to the date of the last change, based on the annual consumer price index published by the National Statistics Institute.

Article 5
Validity of the guarantee deposit

The guarantee deposit paid under the terms of the present order is considered valid until the supply contract expires or is terminated, no matter who the entity is that supplies the service in question, even though it may not be the same one initially contracted by the consumer for the supply of the said service, with the consumer being entitled to demand restitution of the guarantee deposit from this entity.

Article 6
Previous guarantee deposits

1 - Guarantee deposits paid by consumers in cash, by cheque or electronic transfer up to the date of the present order coming into force will be refunded to those consumers or their heirs, after being updated under the terms of no. 4 in accordance with the plan to be established by the entities mentioned in no. 3 of article 2 and within the time limits fixed by them but which must not exceed one year.

2 - The entity responsible for the restitution of guarantee deposits is that which ensures the supply of the service at the time of the said restitution.

3 - The refund plan mentioned in no. 1 may consider the possibility of restitution of guarantee deposits being made by total or partial compensation of debits relative to the supply of services when the respective contracts are still in force and the consumer is the same one to whom restitution of the guarantee deposit is due.

4 - For the purposed of that laid down in no. 1, the updating of guarantee deposits to be refunded only refers to the period after the 1st of January 1999.

Article 7
Coming into force and final conditions

1 - The present order shall come into force 90 days after publication of the same.

2 - Those entities to which no. 3 of article 2 refers must comply with that laid down in this order and that in no. 1 of article 6 within 60 days of this order coming into force.

Seen and approved by the Council of Ministers on April 1st 1999 - António Manuel de Oliveira Guterres - João Cardona Gomes Cravinho - Osvaldo Sarmento e Castro - Elisa Maria da Costa Guimarães Ferreira - José Sócrates Carvalho Pinto de Sousa.

Enacted on May 20th 1999.

Let this be published.

The President of the Republic, JORGE SAMPAIO.

Countersigned on May 25th 1999.

The Prime Minister, António Manuel de Oliveira Guterres.