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New Consumer Rights Act - Are You Ready?

Napthens - September 22nd 2015

Consumer protection legislation has undergone a major overhaul recently and is set to be completed when the new Consumer Rights Act 2015 comes into force on 1 October 2015, which will clarify existing, and introduce new, rights for consumers.  The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into force on 13 June 2014 and changed the rights granted to customers when they are buying goods online or away from the trader’s premises.

Who will the new rules affect?

All businesses who supply goods (including hiring and the hire purchase of goods), services and/or digital content to consumers will be affected and required to review their terms and conditions, cancellation and refund policies and marketing claims.

What are some of the key changes you need to be aware of?

  • Since June last year, consumers have benefited from an extended ‘cooling-off’ cancellation period of 14 days in which to change their minds and return goods which have been purchased online or away from the trader’s premises
  •  Certain pre-contract information must be given to consumers together with a cancellation form, otherwise the cooling-off period can be extended to up to 1 year
  •  From October, provided a consumer notifies you within 30 days of the date of delivery, they can reject faulty goods and demand a full refund, or require you to repair or replace the goods, even if they have used the goods during that time
  •  Following expiry of the 30 day period, the consumer will only initially have the right to require the repair or replacement of the faulty goods, and only if this fails or is not possible, will they have the right to a price reduction or to reject the goods and receive a full refund
  •  Alongside satisfactory quality, description, fitness for purpose and other standards included under the current law, goods supplied by traders to consumers must match any sample or model
  •  Specific statutory rights have been introduced for consumers purchasing digital content
  •  Where services are being provided, they must comply with any information given by or on behalf of the trader about the services and/or the trader (even where this is not set out in the contract)
  •  The rules on ‘unfair terms’ have been consolidated and some key changes made including three new additions to a list of potentially unfair terms, for example a provision which requires the consumer to pay a disproportionate termination fee if they decide to terminate the contract early.

What should you be doing?

If you trade with consumers you should:

  1. Review your existing consumer contracts  - make sure that they are compliant with the new legislation and offer your business as much protection as lawfully possible
  2.  Review your processes when contracting with consumer, for example to ensure that the necessary pre-contract information is being provided to consumers to narrow the cancellation period as far as possible, and that your cancellation and returns policies are compliant
  3.  Review your marketing claims to ensure that you can stand by anything said about your business, products or services
  4.  Ensure that the appropriate customer services or other staff are adequately trained and informed of the new legislation and understand what consumers are entitled to and what they should be offered if something goes wrong.

We can provide training on the new legislation and a review of your contracting processes and documents.