After being announced in the Queen's Speech back in May 2013, the new Consumer Rights Act came into force on 1st October 2015. The Act consolidates and updates the fragmented existing law into legislation that is far more user friendly.
It should be easy for both consumers and businesses to know and exercise their rights. It is common for consumers not to know what they are entitled to, and for businesses to suffer the heavy administrative burden of compliance. It is hoped that the new law will be welcomed by everyone.
The main aim of the Act is to bring together existing legislation and to streamline procedures, but there are also some key additions.
Consumers now have the right to reject defective goods within up to 30 days of purchase, and receive a full refund. A trader must give this refund within 14 days of return by the same method of payment as the purchase, and there must be no admin charge. This applies to the purchase of all goods, however, the period will shorten if they are perishable in nature.
For the first time consumer legislation will deal specifically with digital products and services. The Act has brought in a raft of new rights in relation to "digital content". Digital content is defined as "data which is produced and supplied in digital form" and includes all software such as video and music downloads, apps, online games and e-books. Digital content occupies the middle ground between "goods" and "services". The Act brings into line the consumer's rights when purchasing digital content with that of the purchase of more traditional "goods". These include, along with some new additional rights:
- Implied terms of quality (satisfactory quality, as described, fit for purpose etc.);
- Consumer remedies if goods do not conform to contract (repair or replacement, price reduction or refund);
- Compensation for damage to other devices and content (e.g. loss of data caused by viruses, defects or bugs in the digital content).
If your business currently supplies digital content to consumers, you will need to review the terms and conditions in any existing licences or agreements, website content and marketing materials to ensure they are compatible with the new law.
The new Consumer Rights Act 2015 does not provide any rights in business to business transactions, as businesses are generally outside the meaning of 'consumer'. The Act provides a new central definition of 'consumer', namely an individual acting for purposes which are wholly or mainly outside that individual's trade, business, craft or profession, it's scope is wider than ever before. This is because the definition of 'consumer' is expanded, now incorporating someone who is dealing mainly outside their trade to be treated as a consumer and thus receiving a range of rights and remedies in relation to a contract. This expanded meaning should be kept in mind by traders who believe they are entering a business-to-business transaction, as they may in fact be entering (as per the definition) into a business to consumer transaction.
The Act covers the sale of services and broadly, any service must be carried out with reasonable care and skill within a reasonable time. If any work is not done correctly, a consumer has the right to ask for the job to be done again to get it right.
The Act also develops and consolidates legislation relating to unfair terms in consumer contracts, with a new statutory test of 'fairness' on contract terms and notices. A term or notice will be deemed as unfair and therefore not binding if it causes a "significant imbalance in the parties' rights and obligations to the detriment of the consumer". Schedule 2 of the Act sets out a list of contract terms that may be regarded as unfair. This addition will benefit consumers as it will protect against traders relying on contract terms which, for example, stipulate that a consumer must pay a disproportionately high sum in compensation when they fail to fulfil an obligation in relation to a contract.
With the sheer amount of changes implemented, it is vital, whether as a trader or as a consumer, to ensure that you are prepared for the new consumer law era that will stem from the implementation of the Consumer Rights Act 2015.
At Clapham & Collinge we have a dedicated team of experts who are able to provide you with all of the necessary information, support and legal advice, on consumer rights and how they affect you or your business. For more information, contact our Norwich branch on 01603 693500 or our Sheringham branch on 01263 823398.