The much anticipated Consumer Rights Act 2015 (the ‘‘Act’’) has come into force from 1 October 2015. The new legislation introduces enhanced protection for consumers. Therefore, any business that enters into contracts with consumers needs to be aware of the changes.
Who does the Act apply to?
The Act does not apply to business to business sales. It will only apply to sales made to consumers on or after 1 October 2015 in respect of goods, services and digital content.
We set out here the key changes following implementation of the Act.
For the first time under English law, any consumer who buys faulty goods will be entitled to a full refund for up to 30 days after the purchase. Under previous legislation, the law was very unclear on the length of time as consumers were only entitled to refunds for a "reasonable time".
After 30 days, retailers have one opportunity to repair or replace any goods and the consumer can choose whether they want the goods to be repaired or replaced - if the attempt at a repair or replacement is unsuccessful, the consumer can then claim a refund or a price reduction if they wish to keep the product.
It’s worth noting that there is still no statutory obligation to offer a refund when goods are not faulty, for example, where a consumer has simply changed their mind on the purchase.
The previous requirements that goods must be of satisfactory quality, be fit for purpose and meet the expectations of the consumer still apply.
There will also be new protection for people who buy digital content, such as computer programs, music, ebooks or online films etc. They will be entitled to a full refund, or a replacement, if the digital content does not conform to the contract to supply that content.
If a download infects a computer with a virus, the provider could also be liable to pay compensation for getting the virus removed.
People buying services will also have stronger rights. Under the new Act, providers who do not carry out the work with reasonable care, as agreed with the consumer, will be obliged to put things right. Alternatively, if that is not practical, they may have to give some money back. This is the first time there are clear rules on the provider’s obligations, though an obligation to provide services with ‘reasonable care and skill’ has existed since 1982.
In addition, consumers are now able to challenge terms and conditions which are deemed to be unfair or are hidden in the small print of contracts.
The Act also enacts a legal change that will enable English courts to hear US-style class action lawsuits, where one or several people can sue on behalf of a much larger group. This will make it much easier for groups of consumers to seek compensation from companies, or for groups of small businesses to seek compensation from larger companies that have fixed prices and formed cartels.
In summary, it is vital that you ensure your consumer-facing terms take the new rules into account.