Imminent Consumer Rights Act 2015 law could leave SMEs at risk

Millions of UK businesses selling to consumers could unwittingly face losses and claims from consumers if they fail to comply with new regulations under the Consumer Rights Act 2015.

That’s the warning from John Clement, a partner and head of the litigation and dispute resolution practice at Turbervilles Solicitors.

The new legislation, which comes into effect on 1 October 2015 and which will automatically apply to almost all business to consumer contracts made after that date, means that consumers buying goods or services from businesses (including online sales) will have far more rights, including:

• The ‘right to get what they paid for’
• The right to reject faulty goods within 30 days of purchase
• The right that goods and digital content must be fit for purpose, and that services must be provided with reasonable care and skill
• The right to have faults put right free of charge, or to be provided with a replacement
• The right to a price reduction, or to reject the goods, if the problems have not been satisfactorily addressed after six months.

The new rules will apply not just to contracts for sale of goods and services, but also to most other types of business to consumer contracts, including hire purchase and conditional sale agreements. There are also for new implied terms covering the sale of digital content, such as downloads and apps.

If a customer feels a trader has not acted in accordance with the law they may report the trader to Trading Standards, who have the power to bring criminal prosecutions and/or to seek orders in the civil courts to require a trader to reimburse customers for any financial loss they have suffered as a result of the breach, or to change their internal practices to prevent any repetition of the breach. Alternatively, a consumer may bring a claim of their own in the county court to seek damages against the trader.

John Clement comments, “Businesses will need to be much more transparent about the information they provide to consumers once the new law comes into place this Autumn. They will need to provide an accurate description of their goods and services, which should not be open to misinterpretation, otherwise they could see a hike in customers demanding refunds. The consumer is likely to be given the benefit of the doubt as to how any potentially misleading advertising is interpreted. In the run up to October, businesses should be reviewing all of their promotional literature, including the company website, social media tools, brochures and advertisements to avoid making misleading statements. Businesses must also make sure that their sales and marketing teams are fully trained and up to speed with the new legislation.”

“Firms should also review their terms and conditions to ensure they are ticking all the legal requirements. They will need to be clear about any delivery charges and transparent about any cancellation rights, as well as about their complaints handling procedure.”

“Whilst there are still a few months until the new law comes into effect, many businesses are unaware of the far reaching impact new regulations could have if they fail to comply. Consumers are likely to be more willing to challenge sellers and to ask for refunds, whilst the more litigious could take their grievances all the way to the Courts. Businesses should do everything to mitigate against the risk of this.”