Consumer Rights Act 2015: a summary of key changes for merchants

On the 1st October 2015 the Consumer Rights Act 2015 came into force in the UK and Northern Ireland, consolidating many pieces of older legislation and granting consumers new rights. The Act introduces alternative dispute resolution (ADR), new guidance for digital content, and many changes to consumer contracts for goods and services. While much of the 2015 Act is simply older legislation repackaged in a clearer format, new rights and remedies have been implemented in some instances. Builders’ merchants and other traders should be aware of the changes that affect their businesses and adjust their procedures to meet new legal requirements.

A summary of changes

The Act is 143 pages long and in legalese, so here’s a brief summary of the most important changes and clarifications:

·         Where pre-contractual information is provided to consumers, it becomes an implied term of the actual contract.

·         Goods only conform to the contract if they are installed correctly (where installation is part of the contract) and match any model seen by the consumer.

·         Consumers now have the right to reject goods for 30 days. This time period starts when the consumer receives the goods. A shorter period may apply to perishable goods. A full refund should be provided. This right only applies for faulty goods; you do not have to provide a refund if the customer changes their mind.

·         Alternatively, consumers can claim a repair or replacement. The business must provide this at no cost to the consumer and within a reasonable time. The consumer can’t choose between the two remedies unreasonably – for example, if a replacement is impossible.

·         If a repair or replacement is unsuccessful, the consumer can claim the right to a price reduction or a final right to reject. Businesses can reasonably reduce the refund amount if the goods are rejected more than 6 months after they were purchased.

·         Goods must be delivered within 30 days and without undue delay.

·         New guidance on unfair contract terms has been issued.

The above points only relate to the provision of physical goods. If your merchant provides services or digital content there are other changes which you need to be aware. See a summary over at Business Companion.

Does your business comply with the Act?

First of all, revisit your returns policy and see if it fits the new requirements. The Act clears up the previously foggy consumer rights in this area. Now you are required to provide a 30 day right to reject (and gain a refund). You may also wish to display this new policy in store.

Next, update your complaints procedure with the new consumer rights and remedies in mind. Consider whether you want to use an alternative dispute resolution (ADR) body. This is a new, optional mechanism that aims to resolve consumer-trader disputes without the need to head to court. However, retailers must pay to use this service. You can view a list of ADR bodies here.

You also need to thoroughly check the terms on any contracts you use. New guidance on unfair contract terms has been posted on the government website. Relevant terms must now be prominent as well as transparent (in plain, easy to understand language).

Finally, ensure your staff are aware of the changes to your policies and consumer rights.

Please note: this article does not constitute legal advice. If you’re unsure about any of the new elements in the Consumer Rights Act 2015, take a look at the Business Companion website.

Don’t forget to keep track of the latest legislation changes and retail news at the Integrity Trader blog.