Consumer Rights Act heralds ‘biggest overhaul of consumer rights in a generation’

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Consumers will have enhanced, easy to understand rights following Royal Assent for the Consumer Rights Act being given March 26, according to the Department for Business, Innovation and Skills (BIS).

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 eight pieces of legislation into one place.

UK-BIS

It will also introduce a range of new rights for consumers when it comes into force on October 1 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 added: “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 commented: “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, the BIS claims. 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

However, regulatory lawyer at law firm Bond Dickinson Nicky Strong said: “The aim of the Consumer Rights Bill is to streamline key consumer rights, aligning the inconsistent remedies previously available for consumers under different contract types, and introducing a generic set of consumer law investigatory powers. The headlines suggest that the changes are largely a matter of common sense but the devil is in the detail and the main concern around the Bill is how the enforcement and remedies sections are going to work in practice.

“Under the new changes, consumers will have the right to a reduction in the price or to reject the goods after only one unsuccessful repair or replacement. This is one part that is causing some significant uncertainty. Businesses are already expressing concerns as to how they should approach customer complaints and what remedies can be used and when.

“It is clear that greater clarity is still required on certain aspects of the Bill and how it will operate, and with only six months and a General Election to go, it may be cutting it fine for the Department of Business, Innovation & Skills (BIS) to produce guidance which is helpful at a practical level.”

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