01 October 2015

Consumer protection: are you ready for the new regime?


Kenneth Mullen
Partner | UK

On 1 October 2015 the Consumer Rights Act 2015 (the 'CRA') comes into force, consolidating laws regulating consumer sales and introducing further changes to consumer rights that will impact traders and their customers alike. 

Background to the CRA

Recent years have seen a quiet revolution in UK consumer rights, with the scope of protections and remedies available to consumers gradually increased as new legislation has been enacted.

However, because new legislation has been introduced in a piecemeal fashion, the result has been that UK consumer rights are governed across a multitude of complex laws. This has arguably caused widespread confusion for consumers, who have been unclear as to what their rights are, and caused difficulties for businesses, who have been required to ensure that contracts and sales procedures comply with each new piece of legislation.

As well as bolstering existing protections afforded to consumers, the CRA also seeks to address existing uncertainties for businesses by consolidating and repealing existing legislation, so that the bulk of consumer rights protections are simplified and set out in one place.

How will the CRA impact the protection of consumers' rights?

The CRA only applies to consumers purchasing goods and services from a 'trader', and does not apply to business-to-business contracts. Further, certain exemptions will apply, so the CRA will not protect consumers in connection with certain types of contracts (for example, contracts relating to consumer transport services, mortgage lending or other secured loans).

What are the key changes introduced by the CRA?

  • Sales based on product samples or models: where a customer had seen or examined a model or sample before the contract is made, the goods supplied must match the model or sample (unless any differences have been brought to the customer's attention before the contract is made).   
     
  • Short-term right to reject faulty goods: consumers now have a statutory 30 day period from the date they take possession to reject goods that are faulty, and request a full refund. This serves to clarify existing uncertainties, as previously consumers were required to return faulty goods within a 'reasonable time'.
          
  • Repair or replacement of faulty goods: consumers may at any time require a trader to repair or replace the faulty product at the trader's cost.

If the trader is unable to replace or repair the faulty product (or the repair would take too long, or cause significant inconvenience for the consumer), the consumer has a legal right to:

(a) keep the product and accept a reduction of the price; or

(b) reject the product and receive a refund. Significantly however, if a consumer has had the product for more than 6 months, the trader will be entitled to make a deduction from the amount to be refunded to reflect the consumer's use of the product during such time.

  • Contracts for services: if the services provided by a trader do not conform with the contract, the consumer may require the trader to perform the services again (at the trader's cost) within a reasonable time and without significant inconvenience to the consumer.
     
  • If the trader is unable to repeat the performance of the services, or unable to perform the services within a reasonable time and without significant inconvenience to the consumer, the trader will be required to reduce the price by an appropriate amount and, where applicable, issue a refund.
     
  • Digital content: the CRA also introduces laws specifically dealing with digital content (ie data produced and supplied in digital form, for example software, music and 'apps'), which must be of satisfactory quality, fit for purpose, and match any description given by the trader.

If digital content does not conform to the contract, the consumer will be entitled to a repair or replacement. If the trader is unable to replace or repair the faulty digital content (or the repair would take too long, or cause significant inconvenience for the consumer), the trader will be required to reduce the price by an appropriate amount and issue a refund.
 
Further, if digital content supplied by a trader results in damage to the consumer's device or other digital content in the consumer's possession, and the damage would not have occurred if the trader had exercised reasonable care and skill, then the trader must:

(a) at its cost, repair the damage within a reasonable time, and without significant inconvenience to the consumer; or

(b) compensate the consumer for the damage caused with an appropriate payment.

  • Refunds for products: refunds are to be given within 14 days from the day on which the trader agrees that the consumer is entitled to a refund, and the trader may not levy administrative fees in respect of the refund. Unless the consumer agrees otherwise, refunds must be made using the same payment method by which the consumer paid for the product.
     
  • Unfair contract terms: the CRA reiterates the thrust of existing legislation concerning unfair consumer contract terms. In particular, written terms of consumer contracts must be expressed in “plain and intelligible” language, and set out in a way that is legible. Any term of a consumer contract that is deemed to be unfair will not be binding on the consumer.

How does the CRA impact my business?

If you are a provider of goods or services to consumers based in the United Kingdom, you will immediately need to check your terms and conditions, marketing materials and sales procedures to ensure that they conform to the changes introduced by the CRA.

We are happy to help with reviewing any documentation to ensure compliance with the CRA, or to advise generally in respect of the new rules. Please not hesitate to contact Kenneth Mullen if we can assist you.

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