Today the Consumer Rights Act comes into force, applying to all retailers. So what does this mean for your business?
What does the Act do?
The Consumer Rights Act consolidates and enhances consumer rights in respect of the sale of goods, services and digital content. It clarifies and changes the law relating to ‘unfair terms’ in consumer contracts and consolidates and enhances enforcers’ investigatory powers and extends the ability of trading standards bodies to operate across local boundaries.
What are the key changes for retailers?
Increased consumer remedies for goods:
Consumers have a new 30-day right to reject faulty or mis-described goods and if a consumer exercises this right, the retailer must refund them in full. If the consumer requests a repair or a replacement, the 30-day period can be extended.
If a product is faulty or mis-described, the consumer may, instead of rejecting it, require the retailer to repair or replace it. This right applies during and beyond the initial 30 days after purchase however, the retailer can choose whether to repair or replace if the option chosen by the customer is impossible or disproportionate.
Where a faulty or mis-described good required repair or replacement, retailers now have only one chance to do so correctly before the consumer may become entitled to a refund or price reduction.
If a refund is made, retailers cannot make any ‘deduction’ for use if the consumer rejects the goods within six months of purchase (unless it is a motor vehicle).
If goods and installation services are supplied together, but the installation is not carried out correctly, the consumer can ask the retailer to re-install for free.
New consumer remedies for digital content:
Consumers have new rights in respect of ‘paid-for’ digital content which are similar to the standards that apply to goods. These rights also apply to digital content that is supplied for ‘free’ if supplied with ‘paid for’ items (and the content is not generally available for free).
Unlike goods, consumers will not have the right to reject faulty digital content although can ask for a repair or replacement. If that is not achieved, the consumer is permitted to a price reduction (up to the full price paid).
If faulty digital content is supplied as part of a good, it is deemed not to conform, thus entitling the consumer to exercise their (broader) ‘goods’ remedies.
Retailers may now have to compensate consumers where supplied digital content damages a consumer’s device or other digital content.
Retailers must already provide comprehensive pre-sales information to consumers. Failure to do so may now result in the consumer being eligible to reject a good or receive a price reduction (depending on the type of information).
Consumer contract terms and notices (including in-store, social media and advertising notices) must be ‘fair’ and all terms and notices must be transparent (meaning plain, intelligible and legible).
What is being supplied and all charges must now be very apparent if a retailer wishes to avoid having to demonstrate that those terms are ‘fair’.
James Gill, Partner, Lewis Silkin LLP