The Consumer Protection (Amendment) Regulations 2014 have been laid before Parliament and come into force on 1 October 2014.

What's the issue?

The government is in the process of reforming consumer protection law which is currently highly fragmented, outdated and, in some cases, conflicting. It is also required to implement the Consumer Rights Directive by 13 June 2014.

What's the development?

The Consumer Protection (Amendment) Regulations 2014 (SI/2014/870) (Regulations), principally amend the Consumer Protection from Unfair Trading Regulations 2008 (CPUT Regs) and also partially amend the Consumer Contracts Regulations and the Misrepresentation Act 1967 (plus Scottish and Northern Irish equivalents).

They come into force on 1 October 2014 (save for the provisions amending the Consumer Contracts Regulations which come into force on 13 June 2014) and will apply to contracts entered into, or payments made, on or after that date.

The Regulations introduce rights for consumers to redress in respect of misleading and aggressive commercial practices. 

The right to redress is available under certain circumstances in relation to:

  • business to consumer contracts (trader sells or supplies a product to consumer);
  • consumer to business contracts (consumer sells goods to trader); and
  • a consumer payment (a payment made by a consumer to a trader for the supply of a product).

N.B. "product" is defined as goods, a service, digital content, immoveable property, rights or obligations, or a product of the kind mentioned in paragraphs 1A and 1B.

What does this mean for you?

Hopefully, in relation to your business, this is nothing more than background information for you as you don’t engage in misleading or aggressive commercial practices. It is, however, even more important that you stay clear of such practices in the light of new remedies available to consumers.

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The Regulations introduce rights for consumers to redress in respect of misleading and aggressive commercial practices. 

The right to redress is available under certain circumstances in relation to:

  • business to consumer contracts (trader sells or supplies a product to consumer);
  • consumer to business contracts (consumer sells goods to trader); and
  • a consumer payment (a payment made by a consumer to a trader for the supply of a product).

N.B. "product" is defined as goods, a service, digital content, immoveable property, rights or obligations, or a product of the kind mentioned in paragraphs 1A and 1B.

Where the right to redress is available, the consumer has the following rights:

Click here to view the table.

What is a misleading or aggressive commercial practice?

The amended legislation uses the term "prohibited practice" which is defined as being a misleading action under Regulation 5 or which is aggressive under Regulation 7 i.e. these are unamended.

Summary of Regulations

Reg 2

Amends definitions to bring into line with Consumer Rights Directive.

Reg 3

Inserts new Part 4A, s27 of the CPUT Regs. This sets out when the consumer has a right to redress, what the rights are and how they can be enforced.

27A – when does the consumer have the right to redress?

  • the consumer must enter into a business to consumer, or a consumer to business contract or make a consumer payment;
  • the trader must engage in a prohibited practice in relation to a product or, in a business to consumer contract for goods or digital content, a producer engages in a prohibited practice of which he was aware or could reasonably expected to have been aware of;
  • the prohibited practice is a significant factor in the consumer's decision to enter into the contract or make the payment; and
  • the consumer satisfies any specific conditions which apply to the right of redress they are exercising.

27C-D – exclusions

For the purposes of Regulation 27, "product" excludes immoveable property (other than a relevant lease) and financial services (other than regulated credit agreements).

27E – right to unwind a business to consumer contract

Where a consumer has the right to unwind a business to consumer contract, that right must be exercised within 90 days and while the product remains capable of being rejected i.e before goods or digital content have been fully consumed and services have been fully performed.

The consumer must indicate to the trader (by saying or doing something which is clear) that the consumer is rejecting the product.

The right to unwind and the right to a discount are mutually exclusive with respect to the same prohibited practice.

27F – the effect of unwinding a business to consumer contract

The contract comes to an end, the consumer has a right to a refund (subject to certain qualifications) and, where applicable, any goods are restored to the trader.

27G – the right to unwind a consumer to business contract

Where the consumer has the right to unwind and wishes to exercise it, this must be clearly communicated to the business by something the consumer says or does. The right to unwind gives the consumer a right to treat the contract at an end, to return of the goods and the consumer must repay any amount the trader has paid for them. Where the goods cannot be returned in the condition in which they were supplied, the trader must refund any amount by which the market price of the goods when the trader paid for them exceeds what the trader paid for them.

27H – the right to unwind payments which were not due

The consumer has a right to unwind any consumer payment they were not required to make which entitles them to receive that money back from the trader.

27I – the right to a discount

The right to a discount may be exercised in respect of business to consumer contracts as an alternative to the right to unwind in respect of past or future payments under a contract for the supply of a product. It entitles consumers to tiered discounts (from 25% to 100%) depending on the seriousness of the prohibited practice which is assessed by reference to the behaviour of the trader, the impact of the practice on the consumer and the time which has elapsed.

If the consumer paid more than £5000, then the discount they receive will be the difference in value between the market price of the product and the amount they paid.

The exercising of the right to a discount does not impact on any other rights and liabilities under the contract.

27J – the right to damages

The right to damages is available for additional financial losses, alarm, distress, physical discomfort and inconvenience caused by the prohibited practice. Traders have a due diligence defence in respect of the right to damages if the trader proves that the prohibited practice was due to: a mistake; reliance on information supplied to the trader by another person; the act or default of a person other than the trader; accident; or another cause beyond the trader's control; AND the trader took all reasonable precautions and exercised all due diligence to avoid the prohibited practice.

27K – enforcement

A consumer may enforce the right to redress in civil proceedings.

27L

– the right to redress does not affect existing causes of action which consumers may have in respect of the same conduct save that they cannot recover twice for the same loss.

Regs 4-9

Amend other existing legislation.