All businesses selling goods or services or digital products to consumers will be affected by the new legislation the moment the law is passed.
Any business selling goods or services to consumers should be aware that the Consumer Rights Bill is due to come into force at the end of this year or early next year. It is intended that the existing legislation will be consolidated and updated to deal with technological advances and that the rules governing consumer contracts be clarified and simplified. The new rules will apply not just to contracts for sale but also to other types of contract including hire purchase and conditional sale.
Sale of goods
- A right to reject faulty goods within 30 days of purchase.
- A limit of one repair or replacement of faulty goods before other remedies become available.
- A full refund within six months of purchase if the goods are not adequately repaired or the replacement is defective, subject to any allowance for the consumer’s use of the goods. The Office of Fair Trading is suggesting that the new rules as drafted should not allow any reduction for use by the consumer and there should be right to a full refund if there is a defect in the first six months.
For example, if a customer buys a pair of shoes which leak within 30 days of purchase, the retailer can repair or replace the shoes. If the repair or replacement proves to be just as bad within six months of the original purchase the customer can ask for a refund. There will be no second opportunity to have another go at repairing the shoes or providing a second replacement. How much the refund would be depends on whether the retailer can establish that the customer had any real use out of the shoes.
- It is up to the supplier to adequately describe the services to be provided.
- If there is a failure to provide services with reasonable care and skill the consumer can request that any defect is put right. The supplier will have to do so unless it is impossible, it can't be done within a reasonable time or without significant inconvenience to the consumer.
- The consumer will be entitled to a reduction in price if the problem cannot be put right, is impossible, cannot be done within reasonable time or without significant inconvenience or if the service does not meet the description or is not corrected within a reasonable time.
For example, if a customer asks an electrician to add two new sockets in a kitchen. If the electrician fails to provide a plan showing where the new sockets are to be installed and the customer says they are put in the wrong place, the customer can require the sockets to be re-located to the right place at no cost. The customer may well also be entitled to require any damage cause by the sockets being put in the wrong place to be made good.
- New rules apply to the sale of software, music, games, apps and other digital products whether available or on disc or as downloads.
- Must be of satisfactory quality and fit for the purpose made known to the consumer, should conform to the description given and the trader must have the right to provide the product.
- A refund must be made if the trader does not have the right to provide the product.
- The consumer can request that the defective product is repaired or replaced or if this cannot be done, that there is a reduction in the price.
- If the product sold causes damage to the consumer’s other digital content or device and the consumer can show that the trader failed to use reasonable skill and care, the trader must pay the cost of replacing the content or device.
- There will be a right for consumers to reject faulty goods within 30 days of purchase.
The stated purpose of the new rules is to make markets work more effectively. This is because clarification of the rules will result in less time dealing with disputes and in the long term less staff training and it will also provide clearer rights for consumers.
Unfair terms and enforcement
The new rules will limit the ability of businesses to exclude or limit liability in some cases and also enhance the enforcement powers of the enforcement authorities.
There are gaps and a lack of clarity in some areas which will need to be resolved.
What you need to do
- All businesses will need to consider providing staff training to ensure the new rules are properly understood and implemented.
- Existing terms and conditions may need to be amended.
- Watch this space since the new rules have not been finalised.