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  • Consumer Rights Act 2015 Changes, what you need to know

    9th September 2015 in legal, Max Montague

    The law is changing on the 1st October consolidating and expanding Consumers rights.

    It is estimated that UK Consumers spend £90 billion each month.

    With little fanfare, the Consumer Rights Act 2015 (“the Act”) received Royal assent in March of this year and the main provisions will come into effect on the 1st October and traders need to forward plan as the Act comprises major changes in consumer law relating to goods, services and, for the first time digital content.

    Part of the Act came into force in May namely:-

    • all letting agents in England will be required to publicise a full tariff of their fees
    • additional requirements on those selling tickets via secondary ticketing channels

    Whilst many business owners will view this as yet more governmental interference in the way they conduct business the government’s justification is that greater consumer rights leads to an increase in consumer confidence and is predicted to substantially boost the economy   over the next decade by streamlining complicated law from eight separate pieces of legislation into one place.

    To quote Richard Lloyd,  Executive Director of Which?

    “The Consumer Rights Act brings consumer law into the 21st century and it’s especially good to see the government extending consumer rights into digital content for the first time. The Act is a firm foundation for empowering Consumers and should make it easier for people to understand their rights and challenge bad practice. It will help boost consumer confidence if businesses embrace the new rules and make sure that they treat their customers fairly.”

    The Act has teeth as it also increases the powers of public enforcers such as Trading Standards to assist Consumers who have suffered a loss.

    For businesses using “terms and conditions”, the Act specifically prohibits terms which are “unfair” and are therefore subsequently unenforceable.

    An important aspect of the Act is that “Consumers” could include a sole trader who buys goods for both business and personal use, provided the main use is non-business.

    Highlights of the Act, which runs to some 150 pages

    When selling goods or services to Consumers it will be implied that they will:

    • Be of a satisfactory quality
    • Be fit for their intended purpose.
    • Match a model seen or examined by the consumer.
    • In the case of goods which are installed as part of the contract (either by the trader or someone under his responsibility),   the goods must be installed correctly
    • In the case of goods which include digital content, the goods must  “conform to the contract to provide that content”

    Rights to cancel or obtain repair/replacement

    • If goods do not meet the above requirements there is a short term (30 day) absolute right to reject the goods and receive a full refund. The refund must be given without delay and within 14 days at the latest.
    • If a consumer requests a repair or replacement during the 30 day period, this period is paused so the consumer has the remainder of the 30 day period to check that the repair or replacement is acceptable.
    • new rights for Consumers to get a repair or a replacement of faulty digital content such as online film, games, music downloads and e-books
    • Once the 30 day period to reject goods has expired, the consumer still has the option to request a repair or replacement. Traders only have one chance to repair or replace goods.
    • If replacement or repair of goods is not provided whether because it is unsuccessful or unavailable the consumer can either reject the goods or claim a price reduction. The Act does not specify exactly how the price reduction should be calculated.
    • Where goods are rejected within 6 months there is no right for a trader to deduct sums based on the Consumers use of the goods other than in respect of motor cars.
    • After the 6 month period the trader may make such a deduction for use of goods.
    • Consumers being able to challenge terms and conditions which are not fair or are hidden in the small print. Broadly speaking a term will be “unfair” if it:-
    1. Excludes or restricts the trader’s liability in respect of the relevant statutory right.
    2. Excludes or limits a right or remedy of the consumer in respect the relevant statutory right.
    3. Makes exercising such a right or remedy subject to restrictive or onerous conditions.
    4. Allows a trader to put the consumer at a disadvantage as a result of pursuing such a right or remedy.
    5. Excludes or restricts rules of evidence or procedure

    It is also important for traders to be aware that it is illegal to attempt to exclude Consumers rights so, for example, a “No Refunds” notice is not permitted.

    Traders are also obliged to display their identity and address at their place of business, on their stationery, any website and business emails. For limited companies this includes their full corporate name, registered office, company registration number and the place of incorporation, usually,” England & Wales”

    Suggested Action

    1. Ensure all customer facing employees are fully aware of the rights and obligations contained in the Act
    2. Review any existing terms and conditions to ensure that they comply with the Act and do not contain any unfair terms.
    3. Make sure all notices do not attempt to exclude Consumers rights
    4. If your business comprises sales to Consumers as well as “B2B”, make sure that you do not inadvertently give business customers the same rights as are given to Consumers.

    Brian Scott-Solicitor

    Please note the above is simply a summary and does not comprise advice

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