New Consumer Rights arrive on 1 October 2015

Consumer law is changing as the Consumer Rights Act (CRA) comes into force on 1 October 2015. The law will be clearer and easier to understand, meaning that consumers should be able to buy and businesses should be able to sell to them with confidence. In the event of problems arising, they should be able to sort out disputes more quickly and cheaply. The changes are relevant to all consumers and every business which sells directly to consumers.

From 1 October, the new law will affect the following issues:

  • What should happen when goods are faulty: a consumer will have a fixed period of 30 days from delivery to reject faulty goods and claim a full refund.
  • What should happen when goods are faulty and a consumer wants them repaired: traders will only have one chance to repair or replace non-conforming goods. After that, a consumer may, but is not obliged to, accept any further repairs/replacements and will be able to require a price reduction or reject the goods and require a refund (which may be subject to a deduction for use of the goods).
  • What should happen when digital content is faulty: if any digital content supplied on or embedded in goods does not conform to the statutory quality standards that will apply to digital content under the CRA, the goods will automatically be deemed to be faulty and the full range of goods remedies will apply.
  • Time for delivery: unless a consumer and a trader agree a time or period for delivery before the contract is formed, goods must be delivered without undue delay and in any event no later than 30 days from the date on which the contract is formed.
  • How services should match up to what has been agreed, and what should happen when they do not, or when they are not provided with reasonable care and skill: the business that provided the service must bring it into line with what was agreed with the customer or, if this is not practical, must give some money back.
  • Unfair terms in a contract: contract terms and notices must be fair. If they are not, they will not be binding on the consumer unless the consumer chooses to be bound. A term is unfair if contrary to good faith requirements or it causes a significant imbalance in the parties’ rights and obligations under the contract.
  • What happens when a business is acting in a way which is not competitive: if the term/notice is weighted in favour of the business, then the balance must be redressed. Terms /notices must not take advantage of the consumers’ circumstances to their detriment. Lack of transparency will not render a term or a notice unenforceable but ambiguity will be interpreted in favour of the consumer.
  • Written notice must be served for routine inspections by public enforcers, such as Trading Standards.
  • Public enforcers, such as Trading Standards, will have greater flexibility to respond to breaches of consumer law, such as seeking redress for consumers who have suffered harm.

Most of these changes are important updates to existing laws. But there are two new areas of law:

  • This is the first time that rights on digital content have been set out in legislation. The law here has been unclear up until now and this change brings us up to date with how digital products have evolved.  Digital content means “data which are produced and supplied in digital form” such as software, applications, games, music, videos or texts that are downloaded or streamed.
  • For the first time, there are clear rules for what should happen if a service is not provided with reasonable care and skill or as agreed.

From July 2015, Alternative Dispute Resolution has been available to all businesses to help when a dispute with a consumer cannot be settled directly. Up until July 2015, the service had only been available in certain sectors. A business which is involved in a dispute will need to make the consumer aware of a relevant certified Alternative Dispute Resolution provider. The business should also let the consumer know whether or not they are prepared to use the Alternative Dispute Resolution provider to deal with the dispute. A business does not have to use Alternative Dispute Resolution unless it operates in a sector where existing legislation makes it mandatory (for example, financial services).

Overall, the Act represents a substantial increase in the rights of consumers and in the powers of the court. All B2C businesses should take advice on these changes and update their terms of business where necessary.

Tom Redfern