HR · 1 October 2015

Consumer Rights Act comes into force – How will it affect you?

It is the first time a statutory time frame has been created for getting money back if something is amiss with what you've purchased
It is the first time a statutory time frame has been created for getting money back if something is amiss with what you’ve purchased

New consumer protection measures have come into force under the Consumer Rights Act, including longer refund rights.

Now anyone who buys faulty products will be entitled to a full refund for up to 30 days after the purchase – a change from before when consumers could get refunds up to a “reasonable time”.

The previous laws had gone unchanged since the 70s and 80s, with the update addressing online purchases as well as consumer contracts for ongoing services.

Digital content like Netflix and Spotify covered

The Consumer Rights Act marks the first time a statutory time frame has been created for getting money back if something is amiss with what you’ve purchased. Additionally, it covers digital content for the first time, saying such content must be of satisfactory quality, fit for a particular purpose and as described by the seller – if not the purchaser has the right to a refund.

Retailers now need to deliver items within 30 days – or on the date that has been agreed, otherwise consumers can now get a full refund too.

Naveen Aricatt, UK manager and legal expert at Trusted Shops, said the introduction was “the retail bombshell that fundamentally shifts the power balance in full favour of the consumer”.

She added that there was now “nowhere to hide when it comes to handling refunds, repairs and issues with faulty digital downloads or queries on unfair terms”, while it represented a “great opportunity” for retailers which thrive on the trust foundations of customer relationships.

Get staff up to speed

Aricatt also pressed the importance of firms making sure all employees were aware of the details and “begin with a focus on retraining staff and rewriting contracts to ensure customers aren’t short-changed”.

The Act will also make it significantly easier for groups of consumers to seek compensation from businesses that have fixed prices and formed cartels, with the notable introduction of “opt out” actions. Everyone affected is automatically counted as part of the class which is suing.

Tackling price-fixing

For small firms, it should make it much easier to take action against companies which had fixed the prices of certain goods, such as air fares. Beforehand, all of those affected had to either opt in to the action or bring a claim individually in their own name. In this form, many were less likely to bring a claim as individual losses were small and legal costs high.

The change here should mean a strengthened foundation for bringing a case with more people involved, while consumers can get their money back much more easily and more quickly.

Under the new law, claims have to be approved by the Competition Appeal Tribunal and can be brought by a suitable representative of the group affected by the price fixing, This individual then advertises the claim so others in the group are aware of it, before distributing the money. Any left over would go to charity.

The two types of claims that can be brought are “follow on” one – that follow a competition regulator’s discovery that that has been an infringement of competition law and “standalone” claims, which aren’t based on an infringement decision. Claimants can then seek damages for any competition law violations, rather than solely those the regulators are pursuing.

Image: Shutterstock

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ABOUT THE EXPERT

Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.

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