The Government has implemented a package of measures to reform consumer law. This includes measures to implement the recommendations we made in three reports, published jointly with the Scottish Law Commission:
- Consumer Rights Act 2015, which received Royal Assent on 26 March 2015, and
- The Consumer Protection from Unfair Trading (Amendment) Regulations 2014.
Consumer Rights Act 2015
The Consumer Rights Bill was introduced into Parliament on 23 January 2014.
The Law Commission submitted written evidence to the Public Bill Committee and on 11 February, Law Commissioner, David Hertzell, gave oral evidence.
The draft Consumer Rights Bill had previously been considered by the Business, Innovation and Skills Select Committee. The Law Commission submitted written evidence to the Committee and, on 8 October 2013, David Hertzell gave oral evidence. The Business, Innovation and Skills Select Committee published its report on the Consumer Rights Bill on 23 December 2013.
Consumer Remedies for Faulty Goods
UK consumers have a legal “right to reject” faulty goods. This means a right to a refund if they act within “a reasonable time”. By contrast, under the European Consumer Sales Directive, consumers’ first recourse is to repair or replacement.
In our report, we recommend that the right to reject should be retained in the UK as a short-term remedy of first instance. We recommend that in normal circumstances, a consumer should have 30 days to return faulty goods and receive a refund, with limited flexibility for special circumstances such as perishable goods, or goods which both parties know will not be used for some time.
Our recommendations are included in Part 1, Chapter 2 of the Consumer Rights Act 2015.
Consumer Remedies for Misleading and Aggressive Practices
Misleading and aggressive commercial practices are a major problem. Research from 2009 shows that almost two-thirds of the population had fallen victim to a misleading or aggressive practice, causing an estimated consumer detriment of £3.3 billion a year. A large proportion of the victims are among the most vulnerable in society. Under the existing law it is difficult, if not impossible, for consumers to get their money back.
We recommend that consumers should have a new legal right of redress against traders that carry out misleading or aggressive practices. Consumers would be entitled to a refund, or a discount on the price; and damages may be available if the unfair practice caused additional loss. These recommendations are given effect by The Consumer Protection from Unfair Trading (Amendment) Regulations 2014.
Unfair Terms in Consumer Contracts
Price comparison websites put increasing pressure on traders to offer low headline prices, while making profits from other charges. Since 1994, under an EU directive, the courts have had power to assess the fairness of terms in consumer contracts, but may not look at the amount of the price. In 2009 the issue of what constitutes “the price” came to the fore in litigation over bank charges for unauthorised overdrafts: the Court of Appeal thought that the bank charges could be assessed for fairness, while the Supreme Court thought that they could not.
In our report, we recommend that the courts should not interfere with prices which are transparent and prominent. But where charges are tucked into small print, the courts should have the power to assess them for fairness. These recommendations are to be found in Part 2 of the Consumer Rights Act 2015.