Why the customer is always right!

The Consumer Rights Act 2015 (“CRA”) is the biggest single change in consumer law for three decades and as the new year starts businesses will really see the CRA begin to bite.

The new Act is a significant update of previous consumer legislation but even though, for a large part, the CRA appears to mirror the old legislation you ignore the new terms, rights and remedies at your own peril.

Goods

Any goods you supply must still satisfy the basic criteria i.e. be of satisfactory quality and fit for purpose as well as matching their description and any sample provided but the CRA also imposes a new requirement that goods should also match any model seen or examined by the consumer.

So, overall, how does affect your business? Well, all is revealed in the new set of remedies for consumers which, at least, aims to provide some clarity on what has traditionally been a muddled area. It is precisely this ‘muddle’ which some retailers and businesses routinely took advantage of in order to escape their obligations to consumers and was one of the main reasons for the creation of the new Act.

Under the CRA any consumer who purchases or is supplied with faulty goods is entitled to a full refund within 30 days. That is a fixed period, no arguments as opposed to a ‘reasonable’ period previously.

After the initial 30 days suppliers are given one more chance to repair or replace the goods and if that repair or replacement is unsuccessful then the consumer can claim a refund of up to 100%.

It is only after 6 months that the burden shifts back to the consumer to prove that any defect was either apparent when the goods were delivered or in existence at the time of purchase.

Taking things one step further even digital content is now protected on similar terms as above and you may even, for example, find your business is liable for the cost of removing a virus from a computer if any content or software you provide infects the consumer’s device.

Services

Consumer services also get the ‘new and improved’ treatment. Gone is the lack of any specific obligation on providers if they failed in their duty to the consumer and, in its place, the new Act includes an unequivocal obligation on service providers to remedy any default. Under the CRA if a provider fails to provide a service with reasonable care and skill they are required, at the consumer’s request, to perform the service again (and to the correct standard) and, if that cannot be done, compensate the consumer for the failure to comply with their duties.

Contract Terms

You cannot contract out of the above statutory provisions, which are designed to protect the consumer, unless the contract provides for remedies over and above those which are offered in the CRA.

The CRA also includes provisions which allow consumers to challenge unfair contract terms or terms which have been hidden away in the small print in a much wider sense than before which means that you need to be sure that your terms and conditions will be seen as fair, transparent and reasonable by a court if they are challenged.

All of the above adds up to a potential mess for any business that believes that they are compliant with the Law but has not prepared itself, its employees or its documentation for compliance with the new obligations, rights and remedies of the Consumer Rights Act 2015.

The above is not intended to constitute legal advice and is merely a brief overview of the new Act but, as always, If you are unsure whether your working practices comply or if you simply want to discuss how the new legislation affects your business then your first stop should always be your solicitor.