Consumer Rights Act 2015: What has changed?The Consumer Rights Act 2015 (the "CRA”) has been billed as the biggest overhaul of consumer rights in a generation. It is designed to bring together,
Consumer Rights Act 2015: What has changed?
The Consumer Rights Act 2015 (the "CRA”) has been billed as the biggest overhaul of consumer rights in a generation. It is designed to bring together, improve and update UK consumer law and its main provisions will come into force on 1 October 2015. But what are the main changes and how should businesses selling to consumers prepare for the CRA's implementation?
Overview of the Act
The CRA is split into three parts:
- Part 1 clarifies the standards that consumers can expect when purchasing goods, services and digital content and the remedies that are available to them when those standards are not met;
- Part 2 consolidates and updates UK laws on when contract terms and notices can be considered unfair to consumers and therefore unenforceable; and
- Part 3 contains miscellaneous provisions relating to areas such as regulator enforcement powers, private actions in competition law, letting agent fees, secondary ticketing websites and a student complaints scheme.
- Where goods are supplied by reference to a model seen or examined by a consumer before they enter into a contract (e.g. a car on a showroom floor or a TV in a department store) the goods must match the model, unless the relevant differences are brought to the consumer’s attention before they enter into the contract. This is similar to the longstanding rule on sale by sample that appears in the SGA and is now reflected in the CRA.
- Where a trader agrees to install the goods they are supplying, or arrange for them to be installed, that installation must be done correctly.
- Right to repair or replacement
- Right to a price reduction or final right to reject
- Right to a repair or replacement
- Right to a price reduction
- Repeat performance
- Price reduction
- Unlike the UTCCRs, but broadly in line with UCTA, the CRA applies to notices as well as terms, blacklists certain terms and notices (e.g. those that try to restrict certain rights guaranteed under the CRA) and covers both negotiated and non-negotiated terms.
- A requirement of prominence has been added to the main exemption in the UTCCRs relating to price setting and main subject matter terms. The exemption allows such terms to escape from the usual fairness test, which has been imported from the UTCCRs. A term is unfair if "contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer".
- The "Grey List" of terms that may be unfair that is provided in the UTCCRs has three new additions and appears in Schedule 2 of the CRA. The three new additions to the Grey List are terms which have the object or effect of: (a) allowing disproportionate charges or requiring the consumer to pay for services which have not been supplied, if the consumer ends the contract; (b) allowing the trader to decide the characteristics of the subject matter of the contract after the consumer is bound; and/or (c) allowing the trader discretion to set the price after the consumer is bound, where no price or method of determining the price is agreed when the consumer is bound.
- There are certain aspects of EU legislation or case law that are now made more explicit via inclusion in the CRA. For example, the CRA sets out that the courts must consider the fairness of terms in consumer contracts even where the parties to a case do not raise it as an issue, so long as the court has sufficient information to allow it to do so.
- reviewing their standard terms and conditions of sale, including those provided on retail websites and mobile apps, for compliance with the CRA;
- examining the provisions of any other sales contracts they enter into with consumers;
- evaluating contracts and arrangements with suppliers and distributors to ensure that the consumer rights and remedies provided for in the CRA will be observed and accommodated and that there are no potential liability gaps;
- updating statutory references in all relevant documentation;
- reviewing pre-contractual information that is supplied to consumers, including notices, advertisements and announcements;
- updating cancellation, returns and complaints handling policies; and
- training relevant staff on the new consumer rights and remedies.