Biggest overhaul of consumer rights in a generation
Consumers will have enhanced, easy to understand rights following Royal Assent for the Consumer Rights Act being given today (26 March 2015).
The Act is a major part of the government’s reform of UK consumer law and is predicted to boost the economy by £4 billion over the next decade by streamlining complicated law from 8 pieces of legislation into one place.
It will also introduce a range of new rights for consumers when it comes into force on 1 October 2015 including a 30-day time period to return faulty goods and replacement rights for faulty digital content.
Business Secretary Vince Cable said:
This is the biggest shake up of consumer law for a generation, bringing legislation in line with the fact many people now buy online.
Consumers will now be much better informed and protected when buying goods or services on the internet. They will now be entitled to get for the first time a free repair or replacement for any faulty digital content.
Consumer Affairs Minister Jo Swinson said:
For too long consumers and businesses have struggled to understand the complicated rules that apply when buying goods and services.
That is why the Consumer Rights Act is so important in setting out clear and updated consumer rights for goods, services and, for the first time, digital content.
Well-informed, confident consumers are vital for driving continued growth and building a stronger economy.
Executive Director of Which? Richard Lloyd, said:
The Consumer Rights Act brings consumer law into the 21st century and it’s especially good to see the government extending consumer rights into digital content for the first time. The Act is a firm foundation for empowering consumers and should make it easier for people to understand their rights and challenge bad practice. It will help boost consumer confidence if businesses embrace the new rules and make sure that they treat their customers fairly.
Under the Act, consumers and businesses will have clearer rights and responsibilities. These include:
- new rights for consumers to get a repair or a replacement of faulty digital content such as online film, games, music downloads and e-books. Currently the law is unclear and has failed to keep up with the huge demand for digital products
- consumers having a clear right to demand that substandard services are redone or failing that receive a price reduction
- a 30-day time period to return faulty goods and get a full refund. The law is currently unclear on how long this period should last
- consumers being entitled to some money back after one failed repair of faulty goods (or one faulty replacement) even if more than 30 days have passed, rather than having to put up with repeated attempts to get a repair done
- consumers being able to challenge terms and conditions which are not fair or are hidden in the small print
Measures have also been included in the Act to specifically reduce the burdens of understanding and applying consumer law.
These include:
- a new requirement for enforcers such as Trading Standards Officers to give 48 hours’ notice to businesses when carrying out routine inspections, saving business £4.1 million per year. Trading Standards Officers will still be able to carry out unannounced inspections where they suspect illegal activity
- faster and lower cost remedies for businesses who have been disadvantaged from breaches in competition law
Notes to editors
1.Examples of where the Act will provide greater clarity include for consumers include:
Digital content:
You play a ‘freemium’ computer game – which means that the game was free to use when you started playing it 5 months ago. During that time you have spent money on in-app purchases to improve your game character. After your last character upgrade which you made via an in-app purchase, the game has stopped working. Under the Act you would be entitled to a repair or a replacement. If a repair is not provided within a reasonable time or is impossible to replace then you would be entitled to some money back.
You buy a DVD but when played it jumps erratically or gets stuck. You try to return it but the retailer says that they do not offer refunds on DVDs. Under current legislation your rights are unclear, but the Bill makes it clear that for faulty digital content bought on a tangible medium such as a DVD, you are entitled to a refund within 30 days of purchase.
Services:
You contract a photographer to cover your wedding and capture shots throughout the day starting with the church ceremony which starts at 1pm. You pay £2,000 for the service. There is a clause in the contract which says that the maximum discount for any problems caused by the photographer is £1,000.
The photographer arrives late at 4pm and misses the ceremony. This means that they have breached the contract by not arriving at 1pm. The term limiting the price reduction is invalid. The photography service cannot be repeated, as the wedding has already happened. Under the Act you are entitled to a reduction in price (possibly up to 100 per cent) due to non-compliance with the information provided.
Goods:
You buy a £20 toaster but after 3 and a half weeks you find that it no longer works. Currently under the law it is not clear whether you have a right to return the goods and get a refund because it is not clear if 3 and a half weeks is ‘reasonable time’. Under Act you will have a clear right to a full refund as fewer than 30 days have passed.
Unfair contract terms:
You are purchasing a SoarPrice airlines ticket. You scan the long terms and conditions document before payment, but do not have time to read all of the small print. You tick the box to accept the terms and conditions and book the ticket. But when you arrive at the airport, you find that you have to pay an excess baggage fee for a small bag.
SoarPrice inform you that details of the threshold for the excess baggage fee were in the terms and conditions. SoarPrice argue that the term cannot be challenged for fairness and the fee must be paid. However, you argue that the fee was not brought to your attention when you booked and it was not sufficiently transparent and prominent.
Under provisions in the Act, such terms will have to be both prominent and transparent otherwise they could be assessed for fairness in the courts.