Guidance note for consumer rights

The rights in the Act only apply to certain defined persons, products and activities.

‘Consumer’ – (s.2(3)) you are a consumer if you are acting for purposes that are wholly or mainly outside your trade, business, craft, or profession.  For example, a decorator purchasing paint from a DIY store to be used in his painting and decorating business is not a consumer for the purposes of the Act.  If, however, the same decorator is purchasing paint from the same store to be used in his own home, then he is a consumer.

‘Trader’ – (s.2(2)) means a person acting for purposes relating to their trade, business, craft, or profession.

‘Goods’ – (s.2(8)) means any tangible, moveable items but can include water, gas and electricity.

‘Contracts for goods’ – the Act only applies to contracts between a trader and a consumer to supply goods where the contract is either

• a sales contract
• a contract for hiring goods
• a hire-purchase agreement or
• a contract to transfer goods (s.3(2))

‘Contracts for services’ – the Act applies to contracts for a trader to supply a service to a consumer (s.48(1)).  This does not include contracts of employment or apprenticeships.

Under the Act, as a consumer you have the following rights against traders in relation to contracts for goods:

Goods to be of satisfactory quality (s.9)

This term is implied into every contract for goods under the Act.

To be ‘satisfactory’ the quality must meet the standard expected by a reasonable person, taking into account how the goods are described, their cost and any public statements made by the trader about their quality.

Quality includes the state and condition of goods, including appearance and finish, freedom from minor defects, safety and durability.  As a consumer, you would have no right against a trader if a problem with the quality of the goods was specifically drawn to your attention, or if you examined the goods first and that examination ought to have revealed the problem.

Goods to be fit for a particular purpose (s.10)

This right applies if, before a contract is made, you tell the trader (either expressly or by implication) that you are buying the goods for any particular purpose.  Where the trader is aware of the purpose a term is automatically included in the contract that the goods will be reasonably fit for that purpose.  This applies even if the purpose is not one for which goods of that kind are usually bought or sold.  This right will not apply if you did not actually rely on the trader’s advice, or if it was not reasonable for you to have done so.

Goods to be as described (s.11) Where goods are supplied in accordance with a description they must match that description.

Goods to match a sample (s.13) or a model (s.14)

Where goods are bought on the basis of a sample or a model provided, the goods must match it (unless any difference between the sample/model and goods is brought to your attention before purchase).

Installation of goods (s.15)

If the installation of goods is part of the contract and the goods are installed by the trader or under the trader’s responsibility, then you have a right to have the goods installed correctly.

The Act sets out very clearly the remedies a trader must offer to you if your rights are breached.

The remedies, explained below, are

• short term right to reject
• right to repair or replacement
• right to a price reduction or final right to reject

If the goods are not

• of satisfactory quality
• fit for a particular purpose
• as described or
• in line with a sample or model

all of those remedies are available to you.

If the goods are not

• installed correctly

you have all those rights except the short term right to reject.

Short-term right to reject (s.20 and s.22)

You can reject the goods and treat the contract as at an end.  You must tell the trader that you are exercising this right.

Once rejected, the trader must give you a full refund without undue delay, and in any event within 14 days from the date that the trader agrees that you are entitled to a refund.  You must make the goods available for collection or return them as agreed.  The trader must bear the reasonable costs of returning the goods.  A trader cannot charge a fee for a refund.

You have 30 days from purchase or delivery to reject the goods.  If the goods might perish in a shorter period of time, you must reject them before they perish.

If, during the initial 30 day period you ask for a repair or replacement, the 30 day period is paused.  If, after repair or replacement the goods still do not conform with your statutory rights, the 30 day period will restart.  You will then have at least 7 days to exercise the short term right to reject, no matter when the initial 30 day period was paused.  For example, if the 30 day period was paused on day 29, once the goods have been repaired or replaced, you can then exercise the short term right to reject within 7 days (despite the fact that only 1 day of the original 30 was left).

Right to repair or replacement (s.23)

If you exercise this right, the trader must repair or replace the goods within a reasonable time and without significant inconvenience to you, and bear the costs of doing so.  The trader does not have to repair or replace the goods if it is impossible to do so or would be disproportionate compared with rejecting the goods or allowing a price reduction.

If you ask for goods to be repaired you cannot ask for them to be replaced and cannot reject them without giving the trader a reasonable time to repair them.  The same applies if you first request a replacement.

If, after repair or replacement, there is still a problem with the goods, you can reject them as outlined above.

Right to a price reduction or a final right to reject (s.24)

You must make a choice between a price reduction or final rejection of the goods.  Only one of these rights may be exercised if

• there are still problems with the goods after one repair or one replacement
• it would be impossible or disproportionate to require a repair or replacement or
• a repair or replacement has been requested, but the trader has not carried it out within a reasonable time or without significant inconvenience to the consumer

If you exercise your right to a price reduction, the trader is required to reduce the price by ‘an appropriate amount’.  If you have already paid the price, this may require a partial refund.  In some instances you might be entitled to be refunded the full price of the goods.

If you exercise the final right to reject, any refund may be reduced to reflect your use of the goods.  However, unless the goods in question are a motor vehicle, a deduction cannot be made where you exercise the final right to reject within the first 6 months after taking delivery of them.

No deduction may be made for any period after a date when the trader had agreed but failed to collect the goods.

Once you have rejected the goods, you should receive any refund within 14 days from the date the trader agrees that you are entitled to it.

Other general legal remedies

The Act does not prevent you from seeking other legal remedies if a trader breaches a contract to supply goods.  These might include making a claim for damages, seeking ‘specific performance’ i.e. forcing the trader to comply with the contract, or terminating the contract.

Service to be performed with reasonable care and skill (s.49)

This is implied into every contract to supply a service.

Information about the trader or service to be binding (s.50)

If a trader says or writes something to you (makes a ‘representation’) about themselves or their service that influences either your decision to enter into the contract or any decision about the service during the contract, then the trader will be bound by it, subject to any qualifications also made at the same time.  If you and the trader later expressly agree to a change in the position, you cannot hold the initial representation against the trader.

Reasonable price (s.51)

If the services have been carried out but you and the trader have not agreed the price, it will be implied into the contract that you must pay a ‘reasonable price’ for the service, and no more.  The Act says that ‘What is a reasonable price is a question of fact.’

Services to be performed within a reasonable time (s.52)

If a contract does not expressly fix the time in which the service will be performed or say how it will be determined, the Act implies a term into the contract that the trader must perform the service ‘within a reasonable time’ and says that ‘what is a reasonable time is a question of fact.’

If the trader breaches the term that the services are to be

• performed with reasonable care and skill or
• in accordance with information provided by the trader

you have a right to repeat performance and a price reduction (see below).

If the trader breaches the term that the services will be

• performed within a reasonable time

you have a right to a price reduction.

Right to repeat performance (s.55)

This is the right to require the trader to perform the service again, as is necessary to meet the terms of the contract.

If you exercise this right, the trader must repeat the services within a reasonable time and without significant inconvenience to you and bear the costs of repeat performance.  You cannot exercise this right if it is impossible for the trader to complete the service in line with the contract.

Right to a price reduction (s.56)

You can only exercise this right if

• repeat performance of the service is impossible or
• having received a request for repeat performance, the trader has failed to carry it out without undue delay and without significant inconvenience to you.

If you exercise the right to a price reduction, the trader must reduce the price by ‘an appropriate amount’.  If the price has already been paid this may require a partial refund or the full price of the services.

Once you have exercised this right, the trader must give you a refund within 14 days from the date that the trader agrees that you are entitled to a price reduction.  Unless you agree otherwise, the trader must pay the refund using the same method that you used to pay for the services.  The trader cannot charge a fee for making the refund.

Other general legal remedies

The Act does not prevent you from seeking other legal remedies if a trader breaches a contract to supply services.  These might include making a claim for damages, seeking ‘specific performance’ i.e. forcing the trader to comply with the contract, or terminating the contract.  You can read the Act in full here: http://www.legislation.gov.uk/ukpga/2015/15/contents/enacted.

Consumers also have rights against traders for misleading and aggressive commercial practices, under the Consumer Protection (Amendment) Regulations 2014 (Regulations).

As with the Consumer Rights Act 2015, this guidance note is only designed to provide a brief overview of the rights and remedies available under the Regulations and is not a comprehensive statement of the law.

The Regulations do not generally cover real estate contracts (except for assured tenancies and leases for holiday accommodation), financial services, or credit agreements (except for ‘restricted-use credit agreements’ under which the credit must be used in a particular way).

The Regulations do, however, cover all commercial demands for payment.  If a debt collector is acting as the agent of a trader then a claim under the Regulations would be against the trader itself.

‘Misleading’

An action by a trader is misleading if it contains false information or if it is likely to mislead the average consumer in its overall presentation.

This can include the omission of information, if the omission would create a misleading overall presentation.

‘Aggressive’

Whether a trader has behaved aggressively is a question of fact, and depends on whether it significantly impairs or is likely to significantly impair the average consumer’s freedom of choice.  It covers the use of harassment, coercion, or undue influence.  Pressure selling and doorstep salespersons overstaying their welcome are examples of aggressive practices, as are harassing and threatening actions of debt collectors.

If you wanted to rely on the Regulations, you would have to be able to prove that the aggressive practice was a ‘significant factor’ in your decision to enter into a contract or otherwise make a payment to a trader.  This is a question of fact.

The Regulations only apply to aggressive practices or misleading actions if an average consumer would have been affected.  This is an objective test; it is not sufficient that you, subjectively, felt mislead or intimidated.

This objective test is adapted for vulnerable customers if the practice is directed to a particular group of persons who are vulnerable due to their mental or physical infirmity, age, or credulity.  The government’s guidance gives the example of misleading statements about the healing qualities of nutritional supplements being made to cancer patients, or misleading adverts that are targeted at the elderly.

There are three types of remedy for misleading or aggressive practices

• Unwind (undo) the contract and get your money back;
• Receive a discount; or
• Receive damages for losses.

The rights to unwind a contract and to receive a discount are mutually exclusive.  Where both might apply, a choice must be made.  Unlike damages, both of those remedies are available without the consumer having to show that they have suffered any loss.

Unwind the contract

To unwind the contract you must complain within 90 days and it must be possible to return the goods or reject a service.

The 90 day time limit expires 90 days from the latest of: the date the contract is entered into; the day the goods are first delivered; the day the performance of the service begins; the day a lease begins; or the first day that a right can be exercised.

If goods or services have been partly consumed then any refund must take account of the market price of the services/goods received or consumed.

Discount

For goods and services that cost more than £5,000, the discount is the difference between the market price of the goods/services and the actual price paid.  For goods or services that cost £5,000 or less you will have a right to a fixed percentage discount depending on the severity of the misleading or aggressive practice:

• 25% if it is more than minor;
• 50% if it is significant;
• 75% if it is serious; and
• 100% if it is very serious.

It is a question of fact which category a particular practice falls into.

The right to a discount will apply even though the right to unwind is not available either because you had not complained within 90 days or because the goods or services have been fully consumed.

Damages

You can claim damages if the losses you have suffered exceed the price you have paid.  You will have to show proof of actual loss, stress, or inconvenience.

The amounts awarded for distress and inconvenience must be in line with general legal principles.  Only in exceptional circumstances will damages be greater than £1,000.  Usually a nominal award or an amount less than £1,000 will be appropriate.

You can read the Regulations in full here: https://www.legislation.gov.uk/uksi/2014/870/contents/made.

The government’s guidance on the Regulations can be found here: https://www.gov.uk/government/publications/misleading-and-aggressive-selling-new-rights-for-consumers.

Under The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (Cancellation Regulations) consumers have certain rights to cancel contracts.

As with the Act and Regulations above, this guidance note is only designed to provide a brief overview of the rights and remedies available under the Regulations and is not a comprehensive statement of the law.

Delivery and risk

Unless the consumer and trader have agreed otherwise, every sales contract contains an implied term that the trader must deliver the goods to the consumer.  There is also an implied term that the goods must be delivered without undue delay, and in any event no later than 30 days after the goods are bought.

All sales contracts also include an implied term that a trader remains liable for the goods until they come into the physical possession of the consumer or someone whom the consumer has nominated to take possession of them.

If the consumer has commissioned a courier, delivery company or logistics provider to deliver the goods from the trader to them (and it is not a company offered by the trader) then the consumer becomes liable for the goods when they are handed to the delivery company.

If the trader has refused to deliver the goods, or the goods have not been delivered in time and either:

• delivery of the goods at an agreed time or within an agreed period was essential to the consumer, taking into account all of the relevant circumstances at the time the contract was made; or
• the consumer told the trader before entering the contract that delivery at the agreed time or within the agreed period was essential to them;

then the consumer may treat the contract as at an end.  The trader must then, without undue delay, reimburse all payments made under the contract.

If the consumer does not treat the contract as at an end then they may still exercise all of their cancellation and reimbursement rights as outlined below.

Right to cancel

A consumer may cancel a distance or off-premises contract (i.e. a contract that has been entered into away from the trader’s business premises) in the cancellation periods given below without giving any reason or incurring any liability.

To exercise the right to cancel the consumer must simply inform the trader of their decision to cancel.

The right to cancel does not apply to (amongst other things): contracts for goods worth £42 or less; prescription medicines; products supplied by healthcare professionals; passenger transport services; goods that are made to the consumer’s specification or are clearly personalised; goods which may expire or deteriorate rapidly; contracts for urgent visits to carry out repairs or maintenance; the supply of newspapers or magazines; public auctions; the supply of accommodation, transport of goods, vehicle rental, catering, or leisure services where there is a specific date or period for the provision of the services; goods that have been sealed for health or hygiene reasons that become unsealed after delivery; sealed audio, video, or computer software goods that become unsealed after delivery; goods that have become mixed inseparably after delivery; and, goods or services (except for the supply of water, gas, electricity, or heating) for which the price is dependent on market fluctuations.

Cancellation period

The cancellation period depends on the nature of the goods or services purchased, and how they are delivered.

Services and downloadable digital content

The cancellation period is up to 14 days starting with the day after the contract is made.

Purchase of goods

The cancellation period is up to 14 days from the day after the consumer takes physical possession of the goods. If the consumer has stated that another person is to receive delivery of the goods, the 14 day period starts from the time that the other person takes physical possession.

Where multiple goods under one order are delivered on different days

The cancellation period is up to 14 days from the day after the last of the goods is received. This also applies where goods consisting of multiple lots or pieces are delivered on different days.

Before a consumer enters an off-premises or distance contract to which the right to cancel applies, the trader must tell them:

• that the right to cancel exists;
• the conditions attached to the right to cancel;
• the time limits for cancellation; and
• how to exercise the right to cancel.

If the trader fails to give this information then the cancellation period is extended. If this prescribed information is subsequently provided within 12 months of the first day of the cancellation periods above, the cancellation period ends 14 days after the consumer receives the information. If the information is not provided, the cancellation period ends 12 months after the day on which it would otherwise have done as outlined above.

Effect of cancellation

When the contract is cancelled the parties’ obligations under it end.  The goods must be either returned or collected and the trader must reimburse the consumer.

It is the trader’s responsibility to collect the goods if:

• they have offered to collect them; or
• the goods were delivered to the consumer’s home and, because of their nature, they cannot normally be returned by post.

If neither of the above applies the consumer must send the goods back to the trader or hand them to a person authorised by the trader to collect them.  This must be done within 14 days of cancellation.  The goods must be sent to any address specified by the trader for returns.  If no address is provided for returns, the goods must be sent to the trader’s contact address.  If no contact address is provided, the goods can be returned to any place of business of the trader.

Before a consumer enters an off-premises or distance contract to which the right to cancel applies, the trader must tell them:

• that the consumer will have to bear the cost of returning the goods if the contract is cancelled; and
• (if the goods, by their nature, cannot normally be returned by post) the cost of returning the goods.

If the trader fails to give this information then the trader must bear the cost of returning the goods.

Otherwise, the consumer must bear the cost of returning the goods.

Aside from the cost of returning the goods as outlined above, the trader must reimburse all payments to the consumer without undue delay, and in any event no later than 14 days after:

• the day on which the trader receives the goods back; or
• if earlier, the day on which the consumer provides evidence of having sent the goods back.

If it is the trader’s responsibility to collect the goods, then the reimbursement must be made no later than 14 days starting with the day after the consumer cancels the contract.

The trader must reimburse the consumer for the cost of delivery.  If the consumer chose a delivery option that cost more than the least expensive and common form of delivery (e.g. standard delivery), the trader only has to reimburse the consumer up to the cost of that least expensive and common form of delivery.

Unless the consumer agrees otherwise, the reimbursement must be made using the same means of payment as was used for the initial transaction.  No fee can be charged for the reimbursement.

If the value of the goods has been reduced because the consumer has handled the goods beyond the sort of handling that might reasonably be allowed in a shop, the trader can deduct the reduction in value from the reimbursement.  The trader cannot, however, deduct more than the contract price.

When services have been provided during the cancellation period

The trader must not begin to supply services before the end of the cancellation period unless the consumer has expressly asked them to.  Where the contract was made away from the trader’s premises that request must have been in writing.

For any service other than the supply of energy or utilities, a consumer loses the right to cancel if the services have been:

• fully performed;
• within the cancellation period;
• at the express request of the consumer; and
• with the acknowledgment that the right to cancel would be lost once the services had been fully performed.

Where a consumer has asked for the services to commence before the end of the cancellation period but then cancels the contract before the period has ended, the consumer must pay the trader the proportion of the contract price that has been performed up to the time of cancellation. If the contract price is excessive the consumer need only pay in line with the market price of the service.

In the event that:

• the trader has started to provide the service within the cancellation period but not at the consumer’s express request; or
• before entering into the contract the trader has failed to tell the consumer:
• that the right to cancel exists;
• the conditions attached to the right to cancel;
• the time limits for cancellation; and
• how to exercise the right to cancel,

then the consumer does not have to pay for any of the costs of the service, in full or in part, during the cancellation period.

You can read the Cancellation Regulations in full here: http://www.legislation.gov.uk/uksi/2013/3134/pdfs/uksi_20133134_en.pdf