Consumer Rights Act 2015 - 7 things you should know

On 1 October 2015, the Consumer Rights Act 2015 came into force to consolidate and simplify existing consumer rights in the UK, as well as creating some new law.

Given the legislation is very consumer weighted all businesses whether providing goods, services and now digital media will need to ensure their standard terms and condition of business and practices adhere with the new law. This is not only to ensure their contract terms are in line with the Act, but also that they avoid complaints or even legal action due to their imprudence.

It is important to note that the Act only applies to contracts between consumers and traders and only contracts entered into on or after 1 October 2015.

Here are some question and answers on the Consumer Rights Act 2015 that will guide you through the basics:

How long is the refund period?

The Act says the consumer now has the right to no-quibble 30 days from purchase for a full refund. The money must be returned within 14 days. Previously, the law simply stated that retailers must provide a refund if it was within a “reasonable amount of time” from the date of purchase.

What if the product was bought more than a month ago?

Even if you bought the product more than 30 days ago, the consumer is still entitled to a repair or a replacement. As a retailer you have one chance to make the repair. If the consumer is still unhappy, they have a right to a refund. This right extends to 6 months after the purchase.

What are the other new provisions in relation to Goods?

Most of the provisions on goods consolidate the existing law, such as the statutory implied term as to satisfactory quality, match their description and fitness for purpose. However there are a number of new provisions including:

1. New statutory implied terms based on the requirements to provide pre-contract information and also that goods must match a model seen or examined.
2. Where goods are installed correctly, the consumer will have the same remedies as for defective/non-conforming goods.
3. Rules on delivery and transfer of risk on delivery e.g. unless otherwise agreed goods must be delivered to the consumer without undue delay and within 30 days, and in general the goods are at the trader's risk until they come into the physical possession of the consumer or a person identified by the consumer to take possession of the goods.

Is digital content covered under the Act?

Yes. Responding to the surge in the number of consumers buying digital content, the Act has introduced rules entitling consumers to a repair or replacement when digital products are faulty. This includes the downloading of music, buying apps, music and ebooks .

There isn’t a 30-day grace period for refunds as with physical products, but just a right to a repair or replacement. If the repair or replacement doesn’t fix the problem, the consumer can ask the retailer for a price reduction which can be up to 100% of the cost. The retailer will also be liable if any device or other digital content that is damaged as a result of the faulty digital content downloaded. It is uncertain how this will work in practice – but it could potentially mean that consumers could be protected if an update to a digital device causes the device to cease to function.

What are the provisions in relation to Services?

There are several new changes to the services provided to consumers under the Act. Prior to the Act, the consumer had no statutory remedy where services were of poor quality or defective although they had common law remedy where the services were in breach of any express or implied contract term that the supplier would use reasonable care and skill. Under the new Act, various new provisions are in place whereby every services contract includes a term that the trader must perform the service with reasonable care and skill and liability for breach of this term cannot be excluded (however as long as such an exclusion is fair then liability can be limited to the price paid by the consumer).

Hidden and Unfair Terms?

English law has traditionally had the concept of freedom of contract. So, if two people entered into a contract which was unfair and one sided or unfair, there was little protection for the less favourably treated party. In recent years this position has substantially changed as regards consumer contracts, driven mainly by the Unfair Contact Terms Act 1977. This complex and confusing act no longer applies to consumer contracts. The new Act now makes it easier to challenge hidden fees and charges.

Now the key terms of a contract, including the price, may be assessed for fairness unless they are both prominent and transparent. This is a massive improvement for consumers, however retailers must be wary as previously such terms were exempt from a fairness test if they were written in plain language.

The Act also now provides "grey list" terms – terms which may be regarded as unfair.

What businesses need to do?

Whilst the Act is largely a consolidation of several acts, it contains some highly significant changes that will affect pretty much every business whether you are supplying goods, services or digital content.

Businesses must review their consumer contracts including website terms for compliance with the unfair terms provisions. Businesses must ensure sales staff are briefed in relation to the refund policies and digital content providers must ensure their terms reflect the provisions of the Act.

For more information please contact sanyamotorwala@vslaw.co.uk