Consumer Rights Act 2015
- October 30, 2015
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30-day refund becomes law and includes digital purchases
The Consumer Rights Act, which has been labelled the biggest shake-up in consumer rights law in a generation, came into force on 1st October 2015. The Act consolidates key consumer legislation and introduces clearer remedies and timeframes for consumers to claim a refund, repair or replacement.
Why were the changes needed?
UK Consumer law is unnecessarily complex, unclear and fragmented. A lot of consumer legislation has developed piecemeal over time and has not been amended to keep up with technological changes; thus creating out-dated laws and overlaps and inconsistencies with other legislation.
Consumer Rights Act 2015
The Act is in three Parts:
- Consumer contracts for goods, digital content and services;
- Unfair terms; and
- Miscellaneous and general
Standard and remedies – all products must be of satisfactory quality, fit for purpose and as described. If the product falls short of the standard then a ‘tiered’ remedy system is available.
Six months rule – if the consumer discovers that the product is faulty within six months of receiving it, it is to be taken as being defective on the day it was supplied.
30-day right to reject – a specific timeframe has been created in which consumers can reject a faulty item and get a full refund. The consumer has to inform the trader that they are rejecting the goods and treating the contact as at an end. The trader has a duty to give the consumer a refund, pay the reasonable costs of returning the item and give the refund promptly and within 14 days.
Delivery of goods – unless there is an agreed time or period, the trader must deliver the goods without undue delay and in no more than 30 days.
Who bears the risk during delivery? – the goods remain at the trader’s risk until received by the customer or someone chosen by the customer.
Mixed contracts – for the vast majority of sales, digital content is supplied with goods that can be physically handled (e.g. a car, CD, DVD). The digital content and goods are mixed together as a ‘mixed contact’. The CRA makes it clear that if either the digital content or physical product are faulty, they are treated as a whole item that is defective.
For the first time, the Act covers contracts between a trader and consumer in relation to digital content, as distinct from goods and services. The law here had been unclear and this change has brought us up to date with how digital products have evolved.
Damage to a device – if a trader supplies digital content to a consumer and the digital content causes damage to a device, such as a virus, then the trader will have to compensate the consumer. The consumer must show that the digital content caused the damage and that the trader had not exercised reasonable care and skill.
There are also new clear rules for what should happen if a service is not provided with reasonable care and skill or as agreed.
Standards for a contract for service – the standard is an update to existing law however, the CRA introduces a new statutory right that if the trader provides information which is said or written it is binding where the consumer relies on it.
Remedies – if the service does not meet the standard above then the consumer has two remedies available: 1) a right to request repeat performance, and
2) a right to a partial or full price reduction.
If the consumer requests repeat performance then the trader must provide it within a reasonable time and without significant inconvenience to the consumer and bear any necessary costs. If repeat performance is not adequate then the consumer has a right to a partial or full price reduction.
The CRA consolidates the legislation governing unfair contract terms in relation to consumer contracts, which is currently found in the Unfair Contract Terms Act 1977 (UCTA) and The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR), into one place. It also removes anomalies and overlapping provisions in relation to consumer contracts. UCTA continues to apply to B2B contracts.
Fairness – the CRA makes it clear that contract terms relating to price and subject matter are only exempt from the fairness test if they are prominent and transparent.
Unfair term – an unfair term of a consumer contract is not binding on the consumer.
The Grey list – the CRA contains a list of contract terms that may be considered unfair.
Miscellaneous and general
Enforcement – the CRA sets out provisions on reforming enforcement powers and consolidates and simplifies the investigatory powers of consumer law enforcers in relation to more than 60 pieces of legislation.
Competition – the act establishes the Competition Appeal Tribunal (CAT) as a major venue for competition actions in the UK and changes the way in which judges are able to sit as chairs in the Tribunal.
Alternative Dispute Resolution (ARD) – the Act promotes ADR for competition cases.
Letting Agents – the Act imposes a new duty for letting agents to publicise fees and whether they are a member of a client money protection scheme and which compensation scheme they have joined.
The Higher Education Act 2004 – the act expands the list of higher education providers which are required to join the higher education complaints handling scheme.
Secondary ticketing – the act requires that specific information such as, the seat or standing area, any restrictions and the face value of the ticket, be communicated in a clear and comprehensible manner and before the buyer is bound by the contract.
The Consumer Rights Act 2015 stands alongside Regulations to create a greatly simplified body of consumer law. Taken together, they set out the basic rules which govern how consumers buy and businesses sell to them in the UK.