Changes promised within the Consumer Rights Act will come into force on 1 October, and will affect every business that sells directly to consumers in the UK.
The Act makes significant changes to consumer protection laws and clarifies existing regulations, with the objective to reduce disputes and disagreements between traders and customers.
Whilst the new legislation will help protect consumers, it will also pose significant challenges for businesses who will need to address the changes now to avoid falling foul of it. It is fundamental that companies understand what the implications are and what new processes need to be implemented.
Many companies will be familiar with existing consumer rights and follow all the appropriate steps to ensure compliance with the law. But the new rules will tighten up a number of areas including communication, refunds and redress for customers who buy digital products.
There are some important steps UK bosses should take to ensure they understand and comply with the new rules.
Train your staff
Managers and sales staff will need to be advised about new consumer rights and informed of their responsibilities at point of sale. For instance, the legislation introduces a new term for service providers, which means that certain information about the type of service, whether communicated orally or in writing, will be binding. This means that sales staff will need to be extremely careful about what they say about products and w
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Review all your collateral
The new Act introduces significant changes in the areas of customer satisfaction, refunds and repairs. This means that businesses will need to review all terms and conditions and go through all existing promotional and sales collateral including store notices, brochures and even their website to ensure that it complies with the new rules.
Satisfy the customer
As per the existing legislation, goods sold to consumers must be of satisfactory quality, be fit for purpose and match any given descriptions. The new legislation will introduce a clear timetable which outlines the consumers right to reject faulty goods. For example, if a defect is discovered within 30 days, the new law allows for the consumer to reject the product and receive a full refund. After that 30 day bracket, the consumer can request a repair or a replacement.
The law states that businesses only have one attempt at fixing the issue: if the company fails to do so, the consumer can pull out of the transaction or demand a price reduction.
Look at your contracts
The Act also updates existing legislation which applies to terms and conditions between businesses and customers. Consumers will be able to challenge terms and conditions which are not fair or are hidden in the small print. Businesses must be familiar with terms which may be classed as unfair. Terms outlined in a contract must be transparent and prominent, expressed in writing and in clear language. Businesses need to ensure that their T&Cs are fit for purpose.
Address digital dilemmas
The new Act introduces some specific rules relating to digital content, which includes software, music, games, films, e-books and apps. Where the digital content is not tangible such as software downloaded from the internet for instance the consumer cannot reject the product, but has the right to ask for a repair or replacement.
Businesses could also be liable if the digital content sold damages the consumers own device and this could end with businesses footing a hefty bill.
As with so many big business issues, being able to prepare for and adapt to these changes is vitally important. And waiting for customers to complain or challenge you could prove very costly indeed.
Greg Hughes is a senior associate at national law firm Clarke Willmott.