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Consumer Rights update

08/04/2015
The Consumer Rights Act is now law, having received royal assent on 26 March 2015.  Most of the Act comes into force on 1 October 2015 (the secondary ticketing provisions come into force in two The Consumer Rights Act is now law, having received royal assent on 26 March 2015.  Most of the Act comes into force on 1 October 2015 (the secondary ticketing provisions come into force in two months' time).

As we've previously reported,[1] the Consumer Rights Act consolidates UK Consumer Law into one statute and provides consumers[2] with statutory rights to a refund or repair for faulty goods. One key change is the introduction of a 30 day period to return faulty goods, and replacement rights for faulty digital content (i.e. apps, ebooks, and media downloads).

The Trading Standards institute recently issued guidance on the Act for businesses, which includes suggested point-of-sale wording for digital downloads.  Additionally, the Competition and Markets Authority ("CMA")  recently issued guidance on how it will enforce its consumer powers.  The Financial Conduct Authority ("FCA") removed its guidance to unfair contract terms from its website, and states that those materials no longer reflect the FCA's views on unfair contract terms.  The FCA has indicated that it will update these materials in light of the new Consumer Rights Act and in light of the CMA's guidance consultation on the bill.

Also in the consumer law space, alternative dispute resolution ("ADR") is set to be given more prominence in resolving online consumer disputes with the UK Government introducing regulations to implement the EU Directive on Online Dispute Resolution ("ODR") (Regulation (EU) 524/2013).[3]  From July 2015, where a consumer dispute relating to an online transaction cannot be resolved in-house, traders will be obliged to direct consumers to a certified ADR scheme.  However, ADR will only apply where the parties agree to use it – the regulations don't compel parties to use ADR. The EU ODR Regulation also provides that an EU-wide online platform will be set up to cater for disputes arising from online transactions.  This platform will provide a means for parties who agree to ADR (again, there's no obligation for parties to use the platform, or to use ADR) to contact certified national ADR entities to resolve their disputes.  All businesses which sell goods or services online will need to provide a link to this platform.

The Consumer Rights Act comes at a time of significant change in the regulatory enforcement landscape in the UK. Watch this space for more guidance on how the Act is enforced in practice from BIS, and case studies of enforcement actions undertaken by the CMA and other bodies such as the Consumers' Association and local Trading Standards bodies.

 

[1]  We've been tracking the Act's passage through parliament - see Draft Consumer Rights Bill Published, E-Commerce Law Update: UK government publishes new draft consumer regulations, The Consumer Rights Bill – a digital revolution?, BIS concerns over the draft Consumer Rights Bill, and Consumer rights for digital content closer to becoming law.
[2]'Consumer' is defined as an individual acting for purposes which are wholly or mainly outside that individual's trade, business, craft or profession.  The trader bears the burden of proof to show an individual is not a consumer.

[3] The Government is implementing the EU ODR Regulations through two regulations - (1) The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015, which was laid before Parliament on 17 March 2015, and (2) a second Regulation which will be introduced in Summer 2015.

 

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