Consumer Rights Act 2015.... is your business ready?

On 1 October 2015, the main provisions of the Consumer Rights Act 2015 (Act) come into force. The legislation is being introduced by the Government in an attempt to make the law easier for consumers to understand so that consumers can buy and businesses can sell to them with confidence. 

Key changes

The Act consolidates and reforms a number of keys areas in consumer law including consumer rights and remedies in respect of goods, services and digital content as well as unfair terms in consumer contracts and consumer notices. 

New Rights and remedies under the Act

Along with the established rights and remedies for breach of contract, the Act introduces significant new ones. This includes the right to short term rejection of the goods.  This change will affect many contracts for the supply of goods and services and will mean that many businesses have to amend their terms and conditions to comply with the new piece of legislation. 

Digital content

This is the first time that rights on digital content have been set out in legislation. The Act gives consumers a clear right to repair or replacement along with other rights and remedies that are digital content specific. Digital content is defined as ‘data which are produced and supplied in digital form’ which includes music downloads, online file and games and even e-books. 

With businesses utilising frequent developments in technology and the subsequent increase in trade in digital content, it follows that you should obtain advice to ensure that you know a consumer’s rights and remedies in respect of digital content supplied to them. 

Enhanced Consumer Measures 

The Act also introduces additional powers that will be given to consumer law enforcers to help them remedy breaches of consumer law.   Described as “enhanced consumer measures”, (ECMs) the new powers are intended to allow enforcers to help consumers more directly than is possible under existing measures where the main formal sanction for dealing with the most serious breaches of consumer law is a criminal prosecution.  Currently, certain enforcers can seek civil remedies to stop business from infringing certain consumer law. Rarely however do affected customers receive a direct remedy and offending businesses are not required to make positive changes to their practices to ensure that further breaches do not follow.  

The Government has introduced the ECMs to close the gap between a full criminal prosecution and the limited civil powers that the current law provides. By amending existing law, the Act will give enforcers greater flexibility to remedy breaches. 

So what ECMs are being introduced under the Act? 

The Act has deliberately refrained from specifying what the measures might be so that courts and enforcers have greater flexibility when determining the appropriate measure for an offending trader.  When seeking enforcement, enforcers will be able to propose measures which are aimed to achieve one or more of the following:

• Redress measures or schemes – aimed at consumers who have suffered a loss
• Compliance measures – aimed at traders to prevent or reduce the risk of repeat conduct
• Choice or consumer information measures – more information provided about offending traders’ record of consumer law compliance. 

It is envisaged that ECMs will be used as an alternative to criminal prosecution but there may be instances where offences are serious enough to warrant both civil and criminal proceedings against a trader. 

Pre contract documents 

Businesses need to ensure that pre contractual documentation such as marketing material and any other statements made prior to the contract being formally entered into are unambiguous in respect of the performance of the service in question. This is because there is now an implied term that such documentation ultimately forms part of the contract itself and so a consumer can rely on it. The provisions of the Act cannot be excluded.  Compliance is crucial.

Stay one step ahead

Now is the time to revisit your standard terms and conditions to ensure that your business does not fall foul of the new regime. Making necessary changes now could potentially avoid the cost of future litigation and ultimately help to preserve business relationships.