More Clout for Consumers!

What is Consumer Rights Act 2015 and how does it affect you and your business?

Following on from our article last year talking about distance selling laws, the “biggest overhaul of consumer rights in a generation” comes into force tomorrow (1 October) with the introduction of the Consumer Rights Act 2015 (“CRA”); if you trade with consumers, whether face-to-face or online, you need to be aware of it and how it can affect your business.

Existing consumer law is unnecessarily complex and is considered out of date and inconsistent. It also fails to mention the ever developing world of digital content. The new legislation aims to bring important updates to existing laws and clarify and streamline areas which are unclear.

Are you affected?

Any business which deals with consumers needs to be aware of the changes. This legislation specifically focuses on consumers so does not cover B2B transactions with existing laws still applying where businesses deal with each other.

So, what are the key changes?

Combining three decades’ worth of legislation into one consolidating act means that the new law is quite extensive, even if the intention is for it to be more accessible; so we have highlighted the main things which are likely to be of interest to both consumers and traders:

The core consumer rights under the new legislation are as follows:

 

  • Right to get what you pay for
  • Right to have faults in what you buy put right
  • Right that digital content is fit for purpose
  • Right that traders perform services with reasonable care and skill, within a reasonable time, with the consumer obliged to pay a reasonable price

 

For all businesses, whether you supply goods, services or digital content, there are some key changes:

Products: Customers have the right to reject any defective goods for up to 30 days after they have received the goods and claim a full refund. Following this period, they are allowed to claim a replacement or repair. If this isn’t available or applicable, or the repair is unsuccessful or is not performed within a reasonable amount of time, they can request a price reduction, or still reject the goods.

Services: The CRA states that if you haven’t clearly expressed and agreed the prices for the services in question, you may only charge what is deemed a reasonable price. If these services are not up to standard, the consumer can make you repeat the service, or claim a price reduction. Otherwise, customers may be able to claim compensation for any losses which are incurred.

Digital products and content: For the first time, the law now regulates the supply of digital content. Any data produced and supplied in any digital format is affected. The new legislation requires the sale of digital content (eg software, music, games, apps and films) to meet certain rules:

  • Businesses can have more than one attempt at repairing digital content after 30 days
  • There is no right of rejection for digital content, as there is no way to return it and there’s no requirement for a consumer to delete content from their device; unless the digital content has been purchased or downloaded alongside physical goods
  • If the digital content in question damages the device or hardware it is loaded upon, compensation can now be claimed, even if the content was free of charge

In addition, the enforcement of consumer rights is now shared between the new Competition Markets Authority (CMA), responsible for dealing with unfair terms in contracts and Trading Standards, responsible for preventing unfair trading practices.

What to do now?

We recommend that you consider how the CRA will affect your specific products, services or digital content. Your sales process needs to fit around the new law and, importantly, should seek to avoid unexpected consequences, such as consumers rejecting items or demanding replacements or a price reduction; many businesses now trade online and therefore it is not just face-to-face transactions, such as in retail shops, that need to be considered.  You should ensure that your websites, marketing material and any sales correspondence with consumers, are reviewed and updated to take account of the new law, ensuring you are compliant.

It may also be a good time (if you haven’t already done so) to ensure you are familiar and adhere to the 2013 Regulations which are particularly important if you are an online seller; the unexpected consequences from this small change last June can be surprising. Click here for more.

We are organising a number of seminars with clients and contacts to discuss the changes and assist businesses to comply with the changes.

Richard James heads the corporate practice at Solicitors Title and specialises in commercial law, in particular with clients who operate in the technology and online sector.

Posted: 27/11/2015
Categories: News