Aman Johal, Director of Your Lawyers, takes a look into the history of the Consumer Rights Act and how it has affected businesses and customers in the UK.
The coronavirus pandemic has reportedly resulted in a number of businesses making unfair and misleading claims about products and services. We have seen excessive prices charged for high demand goods like hand sanitisers, and companies refusing refunds despite being contractually obliged to issue them. From March to April 2020, the Competition and Markets Authority received almost 21,000 complaints about consumer goods and purchases related to coronavirus.
The Consumer Rights Act has been critical in defending consumers in the face of these unprecedented events. Since its introduction five years ago, people have benefitted from this unified piece of legislation that can be helpful for transparency and fairness.
Why was the Consumer Rights Act introduced?
The Consumer Rights Act came into force on 1 October, 2015. It was introduced to build consumer confidence, encourage transparency amongst retailers, and modernise pre-existing laws to reflect changing habits. The Act renewed three former pieces of legislation and unified rules on consumer contracts, refund rights and product quality.
As with the laws it ties in with, the 2015 Act emboldens the rights of consumers in that all goods must be described accurately, be fit for purpose, and be of satisfactory quality. Products sold must also match any model inspected or seen by a consumer. For instance, a car which is sold must measure up with the one displayed in the showroom where it is being sold on that basis. Services must be supplied with reasonable care and skill and provided within a reasonable time, and for a reasonable price. Updates were also made to the UK’s refund policy, which was changed to give a fixed period of 30 days to return a product.
The 2015 Act emboldens the rights of consumers in that all goods must be described accurately, be fit for purpose, and be of satisfactory quality.
As well as updating existing legislation, the Act covers new areas of law to reflect modern consumer rights. For the first time, the 2015 Act considered digital content within its remit – a much needed and modernised update. Consumers now have the right to complain about problems with purchased digital content, such as faulty film or music downloads.
What’s the role of businesses in consumer rights?
Businesses must be aware of the 2015 Act to ensure they sell safely and responsibly to consumers. All too often, we see businesses disregarding consumer rights and taking advantage of customers for financial gain. The ongoing ‘dieselgate’ scandals that involve car manufacturers, including Volkswagen and Mercedes, are matters that we are involved with. In the case of Volkswagen, millions of UK consumers purchased vehicles which could emit illegal levels of nitrogen oxide pollutants – behaviour that is in clear violation of all three criteria mandated in The Act. Your Lawyers is committed to holding any carmaker to account if they are found to have cheated important emissions regulations. In the Volkswagen matter alone, the manufacturer could be forced to pay a total of up to £10.2 billion to UK customers and Mercedes owners could be entitled to receive up to £96,000 each in damages under certain regulations.
Under the 2015 Act, traders must ensure that pre-sales information accurately describes the product or service in question. Businesses must also include the right to a refund, which is particularly relevant considering the coronavirus crisis. Many consumers are struggling to obtain refunds for things like cancelled flights, and British Airways has made headlines having been accused of forcing customers seeking refunds to accept vouchers as compensation instead. Consumers need to remember that they may be entitled to a refund, even if airlines offer credit vouchers instead.
Under the 2015 Act, traders must ensure that pre-sales information accurately describes the product or service in question.
Can consumers make a claim under the Consumer Rights Act?
Consumer products bought in the UK must align with the three criteria specified in The Act: they must be of satisfactory quality, fit for purpose, and as described when purchased. It is the responsibility of the business to make sure that these criteria are upheld for all purchases.
Consumers have a legal right to reject purchased goods within 30 days which do not fit the criteria. Outside of the 30 days, consumers can give the retailer an opportunity to repair or replace goods, or be entitled to a full or partial refund if, for example, the cost of the repair does not represent the cost of the product, or would cause the consumer significant inconvenience.
The Act also simplified consumer disputes with the user of Alternative Dispute Resolution (ADR). If a consumer engages a business in a dispute, the business is obligated to make the consumer aware of the relevant ADR. To use the ADR, consumers must be able to show a ‘letter of deadlock’ proving that they tried to resolve the complaint through the trader’s complaints procedure.
The updated Consumer Rights Act is a helpful step in the right direction in preventing companies from engaging in deceitful practices and strengthening the power consumers have to ensure for a fair marketplace.
What do the next five years of consumer rights legislation look like?
Although the 2015 Act took into account digital content for the first time, it’s likely that we will need to continue to update this legislation as technology continues to evolve.
With the Brexit transition deadline approaching on 31 December, Britain’s departure from the EU is also likely to have an impact on consumer rights. The Online Dispute Resolution platform managed by the European Commission is set to remain available until the end of the transition period – after that, the future looks uncertain.
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It is critical that businesses are prepared for this transition so that they can uphold consumer rights. Businesses may need to comply with multiple insolvency regimes across the EU. Failure to do so could not only lead to financial penalties but reputational damage and consumer mistrust. Consumers are more informed than ever before, expecting the highest standard from their purchases, and we must help ensure that these standards are met by businesses going forwards.
The 2015 Consumer Rights Act has been pivotal over the past five years in driving action against companies who deceive their customers. The push towards greater transparency and clarity of rights has set the right tone for defending consumer rights in an increasingly complex environment, and we must continue to make sure that these are upheld in the years to come.
