Reform of UK Consumer law
The most significant reform of consumer law in decades will continue to develop in 2014 through the implementation of new legislation and the replacement of the OFT and Competition Commission.
Here are three of the key developments to expect in 2014:
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations (the Regulations) come into force on 13 June 2014.
The Regulations affect most business to consumer (B2C) contracts concluded from 13 June 2014 and cover, among other things, 'distance contracts' and 'off–premises' contracts. These Regulations will therefore be of particular importance to online retailers and businesses that conclude contracts away from their premises.
The Regulations also introduce new rules relating to the supply of 'digital content', an area that has not previously been regulated by UK law.
The Regulations replace the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in a Consumer's Home or Place of work etc. Regulations 2008.
Some of the key changes introduced by the Regulations are as follows:
an extension of the 'cooling off' period from seven working days to 14 calendar days (the 'cooling off' period is the period in which consumer can voluntarily cancel a distance contract)
an amendment to the point at which the 'cooling off' period starts for distance contracts for the sale of goods
the maximum duration to which the cooling off period may be extended if the business fails to notify the consumer of his or her right to cancel will be 12 months instead of three months and seven days
the provision of digital content (such as a music download) is treated as a new type of supply (or either the supply of goods or the supply of services) and businesses must comply with additional digital specific information requirements
online auction sites are covered by the Regulations
express consent must be given by a consumer in relation to any additional payments required by a business (over and above the payment agreed for the business's main obligations).
Abolition of the OFT in April 2014
The Office of Fair Trading (OFT) was abolished on 1 April 2014.
The OFT's competition function was merged with that of the Competition Commission (which was also abolished as of 1 April 2014) and transferred to the new Competition and Markets Authority (CMA). The CMA will, among other things, take over the OFT's enforcement role regarding unfair terms in consumer contracts.
The OFT lost its duty as primary enforcer in relation to key consumer protection legislation and its consumer advice role back in March 2013 when Trading Standards took over the lead role in most enforcement matters. In addition, some of the OFT's consumer advice functions were transferred to Citizens Advice and Citizens Advice Scotland.
As of 1 April 2014 all of the OFT's consumer law functions were transferred to other bodies.
Exemption from payment surcharges for micro-businesses under the Consumer Rights (Payment Surcharges) Regulations 2012 ends on 12 June 2014.
These Regulations ban excessive consumer payment surcharges. Payment surcharges are charges (on top of the price of the goods or services) that are imposed on consumers who pay with a particular method of payment such as credit cards. A trader charges an excessive payment surcharge when it is charging the consumer more than the cost to the trader for the use of a particular payment method.
The ban initially applied to all contracts entered into on or after 6 April 2013, with the exception of micro-businesses and new businesses. However, on 12 June 2014 this exemption ends and all micro-businesses and new businesses will have to comply with these Regulations.