UK consumers spend GBP 90 billion a month and, as of 1 October 2015, they can now enjoy clear and enhanced consumer rights under the Consumer Rights Act 2015 (“the 2015 Act”).

To ensure traders comply with the reformed consumer law, a number of ‘enforcers’ are granted investigatory powers to consider possible breaches. The 2015 Act looks to consolidate, modernise and simplify these investigatory powers to improve their transparency and accessibility for both traders and enforcers. Enforcers have also been afforded greater flexibility, through Enhanced Consumer Measures (ECMs), which aim to provide consumers with the best outcomes.

What are the powers and who can enforce them?

There are four types of enforcers:

  • Domestic enforcers, including Trading standards
  • EU enforcers
  • Public designated enforcers
  • Unfair contract terms enforcers, including Ofcom and Which?

Every enforcer may use the numerous, generic enforcement powers listed in Schedule 5 of the 2015 Act. Some of these powers are reformed, including clarification of the different powers of entry and inspection, and increased safeguards to the powers. When deciding which powers to enforce, the enforcer will consider the nature and seriousness of the suspected breach. 

Of most concern is an enforcer’s new power to enter premises with or without notice. The 2015 Act requires an enforcer to give two days written notice, to the occupier of commercial premises, to carry out a routine inspection. However, if an enforcer “reasonably suspects a breach of consumer law” or believes notice would “defeat the purpose of entry” this requirement is waived. Unfortunately, there is little guidance on what evidence or intelligence the enforcer would need before drawing these conclusions. Once the inspector gains entry without notice, they may exercise additional powers such as the ability to seize and detain goods or require production of documents.

To provide some level of protection to traders, safeguards have been introduced and traders should ensure they are aware of their rights and duties when dealing with the regulator. For example, if requested, enforcers are required to let those persons from whom goods and documents have been seized have supervised access to them once detained.

Criminal offences

A person will commit an obstruction offence should they:

  • Intentionally obstruct an enforcer
  • Intentionally fail to comply with instructions given by an enforcer
  • Fail to give an enforcer assistance or information reasonably required. This includes making a statement or reckless statement which the person knows is false or misleading

Found guilty of this offence, a person may be fined up to GBP 1,000. Under the 2015 Act it is also an offence for a person to falsely act as an officer by purporting to use the powers prescribed in Schedule 5. A person found guilty of this offence may be fined up to GBP 5,000.

Enhanced Consumer Measures (ECMs)

Once an enforcer has utilised their powers and, if they establish a breach of consumer law, there are a number of measures or sanctions they may seek.

Prior to the 2015 Act, the main formal sanction for dealing with the most serious breaches of consumer law was criminal prosecution and the only civil redress was an injunction to stop the offending behaviour, neither of which benefitted the consumer. However, ECMs aim to achieve:

  • Redress – giving consumers, who have suffered loss, their money back
  • Compliance – reducing the likelihood of future breaches
  • Information – enabling consumers to exercise greater choice in the market

There is no exhaustive list of ECMs in the 2015 Act. The measures should always be just, reasonable and proportionate and an enforcer will consider a number of factors, including the public interest, before deciding on the most suitable measure or sanction. There may be cases where it is appropriate that ECMs are used in addition to a criminal prosecution.

Procedure

Once an enforcer has exercised powers and established a breach of consumer law, a number of factors will be considered before deciding on the most appropriate measure and/or sanction. The enforcer should then work with the trader to agree how matters should be actioned and, when the enforcer believes the solution is appropriate, they will accept undertakings from the trader specifying the ECMs that the trader will take, and the period of time in which it will take them.

Following a consultation period of 28 days, if the enforcer and trader cannot agree on suitable measures, the enforcer may apply to the civil courts for an Enforcement Order. The enforcer must present their case to the court, which will then decide if the proposed ECMs are just, reasonable and proportionate before making an appropriate enforcement order.

Civil sanctions will be initiated at the conclusion of any criminal prosecutions.

What if a trader does not comply with the ECMs?

Individual traders and directors or officers of a company who have failed to ensure compliance with an undertaking or court order may be committed for contempt of court. This is punishable by up to two years imprisonment or an unlimited fine. Property belonging to the company and/or directors or officers may be confiscated.

Implications on traders

As always prevention is better than cure. The 2015 Act streamlines fragmented legislation spanning almost 40 years and traders must ensure they are alive to the new rights enjoyed by consumers. Should a trader find themselves the subject of an investigation, it is essential they are aware of the scope and limitations of the enforcer’s powers. A trader should also make use of the legislated safeguards in place to offer protection. By working together with the enforcer and by actioning any agreed or ordered ECM, a company can avoid criminal prosecution and ensure consumer confidence and satisfaction in the market place.