Risk & Economy » Regulation » The Rules: Government updates laws governing consumer rights

THE Consumer Contracts Regulations 2013 made significant changes to consumer rights – and just when you thought you had digested those, along comes another set in the guise of the Consumer Rights Act 2015, the main provisions of which come into effect on 1 October 2015.

The changes streamline eight pieces of legislation into one and clarify businesses’ responsibilities to their customers. Businesses will need to prepare for the changes by reviewing their returns and complaints policies, checking their terms and conditions are compliant and training staff.

“I know that UK businesses care deeply about treating their customers well, because, frankly, it makes business sense. That’s why we’re simplifying the law to make it easier for hardworking businesses to understand their responsibilities to customers and allowing consumers to shop with confidence,” says business minister Nick Boles.

To some extent, the change consolidates existing law, by  incorporating the sale, hire and hire-purchase of goods, but it also makes significant reforms to the rights and remedies available for defective goods and services and the law on unfair terms in consumer contracts and consumer notices, and introduces new rights and remedies for digital content. Along with that goes an extension of the remedies and penalties that can be imposed on businesses breaching consumer law and facilitation of private collective actions by consumers against businesses for anti-competitive behaviour.

The act harmonises the key terms such as “trader” (it includes government departments and public authorities), “consumer” (but the definition of consumer is wider than under EU law as it includes individuals acting [wholly or mainly] outside that individual’s trade, business, craft or profession), “goods” and “digital content” which were not consistently defined in previous legislation.

What statutory rights does the consumer have in relation to the supply of goods? As you might expect, these are manifold and some have been around for a while and are familiar, eg, goods to be of satisfactory quality and fit for purpose.

Others are new, for example:

• if a consumer has seen or examined a model then the goods supplied must match that model unless any differences have been brought to the customer’s attention
• where goods are installed as part of a contract, they must be installed correctly or they will not conform to the contract

Not always in favour

The key changes include:

• A 30-day time period to return faulty goods and get a full refund
• Consumers having a clear right to demand substandard services are redone or, failing that, receive a price reduction
• Businesses getting written notice for routine inspections by public enforcers, such as Trading Standards
• Changes to make it easier for consumers and small businesses to get compensation when a business is acting in a way which isn’t competitive
• Consumers being able to challenge terms and conditions which are not fair or are hidden in the small print • New rights for consumers to get a repair or a replacement of faulty digital content such as online films, games, music downloads and e-books

Exclusion clauses and unfair terms are always a headache and do not always provide certainty for a trader, but now the position is a lot clearer although it does not always favour the trader. So clauses that exclude or limit liability of the trader by a term in a consumer contract or notice in relation to statutory rights granted to consumers under this act are “blacklisted” and therefore not enforceable. A trader also cannot exclude or restrict liability for death or personal injury resulting from negligence. This applies across the board to contracts for goods, services or digital content. So what can businesses do to minimise risk?

• Ensure that the business is providing an accurate description of the goods or services they are selling as well as any accompanying visuals such as films or photographs. The main thing to have in mind is it could be not viewed misrepresenting the actual service/goods offering.
• Scrutinise all sales and marketing literature, including the company website, social media tools, brochures and advertisements, and ensure there are no misleading statements.
• All sales and marketing staff within the organisation should be up to speed with the new changes in law so nothing they say to a consumer can be called into question – days, weeks or even months after a purchase.
• Hold a team training session this September, and make sure their elevator and sales pitches have the right messages.
• Get a legal adviser to review the company’s terms and conditions to ensure they meet all the new requirements. Be transparent with the customer about any delivery charges, whether the sale takes place over the phone, face to face or online. The same goes for any cancellation rights and your complaints handling procedure.

When a problem does occur, the government is making it easier to settle disputes. From October, certified third-party mediators, called Alternative Dispute Resolution (ADR) providers, will be available to help when a dispute cannot be settled directly with the consumer. The system offers a quicker way of resolving disputes than going through the courts. Until now, the service has only been available in certain sectors.

Once the internal complaint process is exhausted, businesses must give the consumer details of a certified ADR provider and ask consumers if they are willing to use them. Businesses do not have to use ADR unless they operate in a sector where existing legislation makes it mandatory, such as financial services. ?

Sess Sigre is a partner at Turbervilles Solicitors