Top Tips for Preparing for the Consumer Rights Act 2015

With the Consumer Rights Act soon coming into force, here are our 3 top tips for getting your business prepared.

The Consumer Rights Act 2015 (the “Act”) comes into force on 1 October and will consolidate (most of) the legislative landscape for consumer rights. It brings about several changes that traders and service providers need to be aware of and now is the time to get your house in order!  

Here are our 3 top tips for preparing your business for the changes:

1. Review your terms and conditions – get out the fine tooth comb and go through your T&Cs to ensure they comply not only with the Act but also with the Consumer Contracts (Information, Cancellation and Additional Charges Regulations 2013 (“Consumer Contract Regs”). For guidance on the key changes brought about by the Consumer Contract Regs, see our note. Under the Act, some of the key changes to bear in mind are that:

  • There are new obligation for goods to comply with any model displayed
  • Consumers are no longer bound to accept delivery in instalments (unless you agree this with the consumer – i.e. you make it clear in your T&Cs and other notices that delivery can be made in instalments)
  • Consumers have formal rights in respect of digital content under the Act
  • There are new tiered remedies for consumers in respect of goods, digital content and services.

2. Check that your consumer notices are ‘fair’ – Consumer Focus has estimated that misleading and aggressive commercial practices cost consumers £3.3bn annually  -  the driving force behind the new provisions on fair notices. The fairness test set out in the Unfair Terms in Consumer Contracts Regulations (“UTCCRs”) has not only been incorporated into the Act for application to terms in consumer contracts, but for all consumer notices (which include announcements, whether written or oral, and all other forms of communication or purported communication). This means that you need to check all of your consumer literature. It needs to be:

  • Clear, transparent (i.e. legible, and in plain and intelligible language)
  • Not cause a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.

The Act incorporates a list of potentially unfair terms and guidance to the Act states that this list is relevant to consumer notices as well as contract terms.

3. Update your internal policies – the Act will impact on your current policies and likely require you to implement some new ones. Perhaps the key policy to start with is in respect of returns.

For goods, consumers will have a 30 day “short term right to reject” for faulty goods, meaning the trader will have to give a full refund. This is new, as previously, consumers had to rely on their common law duty to reject goods within a “reasonable time” (for which case law provided no useful guidance) or to demand a repair or replacement.

After the first 30 days are up, the trader has one chance to repair or replace the faulty goods. This is likely to be quite unfavourable to traders – consider a scenario where a product has a minor defect and the traders replaces it, only for another minor defect to occur. The consumer would have the choice of rejecting the goods and obtaining a full refund or demanding a reduction in the price. This is likely to have most impact on traders selling high worth goods for which their value drops significantly in a short space of time, such as designer shoes.

The Act will also introduce the right to deduct an amount from refunds in respect of usage after the first six months (or 30 days for vehicles). This will require traders to consider implementing a group wide policy for calculating the appropriate deduction for use.

These are just three of the areas that you should focus on in the lead up to the Act coming into force. Please get in touch if you need any assistance in preparing your business for the changes.

Author - Rosanna Biggs

Read the rest of our articles in this series:

Selling goods – getting it right under the new Consumer Rights Act »

Services – new statutory rights & remedies under the Consumer Rights Act »

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.