The Consumer Rights Act is a major piece of legislation that will affect all suppliers of goods and services as well as those who buy them. Find out more about what the Act entails in our article.
From 1st October 2015, the Consumer Rights Act has been in force. All purchases made from this date onwards are now covered by the Act.
What changes does the Act introduce?
All products must be of satisfactory quality, fit for purpose and as described. The rules also include digital content in this definition. If any of the three criteria are not satisfied by the purchase, the consumer has a claim.
30-day right to reject
The Act gives consumers an early right to reject goods that are of unsatisfactory quality, unfit for purpose or not as described and get a full refund. However, the right is limited to thirty days from the date of purchase. This right does not, however, apply to digital content.
In the case of perishable goods, the time limit is shorter and will be determined by the type of product and how long it would be reasonable to expect it to last.
Repair or replace
If the thirty day limit has expired, the consumer has the right to ask the retailer to repair or replace any goods (or digital content) that is unfit for purpose, not as described or not of satisfactory quality.
The consumer can choose between a repair and a replacement. However, this can be refused if it can be shown by the retailer that the consumer’s choice is disproportionately expensive in comparison to the alternative.
If the attempt at a repair or replacement is unsuccessful and the consumer wants to keep the product, they can claim a refund or price reduction.
The consumer is entitled to a full or partial refund instead of a repair/replacement if:
the cost of the repair or replacement is disproportionate to the value of the goods or digital content, or
a repair or replacement is impossible, or
a repair or replacement would be significantly inconvenient, or
the repair would take unreasonably long, or
the repair has been unsuccessful.
The consumer is entitled to request further repair attempts or replacement if they do not want the refund.
From 30 days to six months
After the thirty day limit has expired, the consumer still has rights with regard to their purchase. If they discover a fault within the first six months after it has been delivered, the Act presumes that the fault has been there since the time of delivery. This does not, however, apply if the retailer can prove otherwise. The burden of proof lies with the retailer.
If the consumer has requested an attempt at repair or a replacement and neither has been successful, they have the right to reject the goods for a full refund, or request a price reduction if they wish to keep the product.
In the first six months after a replacement or an unsuccessful attempt at repair, no deduction can be made from a refund. In the case of motor vehicles, a reasonable reduction may be made for the use that the consumer has already made of the vehicle. If the consumer wants to keep the goods, they can request a price reduction.
Six months or more
Once the six month limit has passed, the burden of proof regarding fault at the time of delivery passes to the consumer. This will most likely need the input of an expert or evidence of similar problems with other products in the same range.
If the consumer wants to take a claim to the Small Claims Court in England, Wales and Northern Ireland, they have six years to do so. The time limit is five years in Scotland.
Under the Act, digital content is now covered by the same criteria as physical goods, viz. they must be of satisfactory quality, fit for a particular purpose and as described by the seller. The Act’s definition of digital content is “data which are produced and supplied in digital form.”
Should the digital content not conform to the three criteria, the consumer has a right to repair or replacement as with physical goods.
If the repair or replacement does not resolve the consumer’s problem with the product, they can request a price reduction which can be up to 100% of the cost of the digital content.
A new provision of the Act says that if the digital content that has been downloaded has damaged any of the consumer’s devices or other digital content, they are entitled to compensation from the retailer. This right comes into operation if the damage would not have occurred if the retailer had exercised reasonable skill and care in providing the digital content, regardless of whether the content was provided free of charge.
Digital and Physical Goods combined
If a product combines both goods and digital content, Section 16 of the Act says that if either the digital content or physical part are faulty, the rights of the consumer are the same as if the product were purely a physical one. This includes the thirty day right to a full refund.
Until the goods are in the physical possession of the consumer (or their appointed representative), they are still the responsibility of the retailer. That means that the liability for the service of couriers rests with the retailer, provided that they have employed the courier – no liability attaches to the courier.
The retailer needs to make delivery of the goods within thirty days unless they have agreed a longer period with the customer. If the thirty day (or agreed) deadline passes and the goods have not been delivered, the customer has:
the right to terminate the purchase and obtain a full refund if the delivery is later than agreed and it was essential that it was delivered on time; or
the right to cancel the order for a full refund if the delivery time is not essential but the customer and retailer cannot agree another reasonable delivery time.
If the consumer orders goods but is not at the retailer’s premises when they do so, the provisions of the Consumer Contracts Regulations apply.
Supply of a service
If the consumer has purchased a service rather than physical goods, the service contract is governed by the Act. The provisions of the Act mean that contracts for services must ensure that:
the trader carries out the service with reasonable care and skill;
information which is said or written is binding where the consumer relies on it;
the service must be provided for a reasonable price, provided it is not agreed beforehand;
the service must be carried out in a reasonable time.
If these criteria are not satisfied by the service provided, the consumer has the following remedies under the Act:
The element of the service which is inadequate should be redone by the trader, or the whole service should be redone at no extra cost to the customer, at a reasonable time and without significant inconvenience to the customer.
If redoing the service is impossible, or it cannot be carried out within a reasonable time or in a way that avoids significant inconvenience, the customer can claim a price reduction. The amount of the reduction depends on how severe the failings in the original service are, and could result in a reduction of up to 100% of the cost.
Unfair contract terms
Changes to the consumer’s rights on hidden fees and charges mean that the key terms of a contract, including price, can be assessed for fairness unless they are both prominent and transparent.
Terms may be deemed unfair if:
they are contrary to the requirements of good faith;
they cause “a significant imbalance between the rights of the retailer and consumer to the detriment of the consumer”.
Examples of terms that might be classed as unfair under the Act include:
hidden fees and charges in the small print;
a limitation on the consumer’s legal rights;
default charges that are disproportionately high;
excessive charges for early termination.
In the event that a customer believes that they have been affected by an unfair term, they should direct their complaint in the first instance to the trader from whom they bought the product.
What should businesses do?
Businesses need to take action in order to ensure that they are fully compliant with the requirements of the Act. They should:
review their terms and conditions of sale, including those on retail websites and mobile apps, making sure that they comply with the Act;
examine the wording of any other contracts that they enter into with customers;
check that their contracts with suppliers and distributors observe and accommodate consumer rights;
update all documentation to ensure that it refers to the Act; check the compliance status of all pre-contractual information that is supplied to consumers;
review and update cancellation, returns and complaints handling policies; and
institute training programmes for staff on the provisions of the Act relating to consumer rights and remedies.
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