“Consumer protection” is a generic term meaning all laws and measures to protect the consumer. It covers many areas, for instance: the sale of goods and services; unfair contract terms; distance selling; and the safety of goods. This note provides information on the following:
- Current consumer protection regime
- When something’s gone wrong with a purchase
- How to resolve a consumer dispute
- Where to go for help and advice
Current consumer protection regime
The Consumer Rights Act 2015, which came into force on 1 October 2015, represents the biggest overhaul of consumer law for many decades. The Act has introduced new consumer rights and remedies in respect of consumer contracts for goods, digital content and services.
Legislative reforms have been made against a backdrop of structural changes to consumer law enforcement bodies, creating a new consumer landscape. Several different public and private bodies now enforce consumer law, including:
- Citizens Advice (which operates a consumer helpline)
- Trading Standards Services
- Financial Conduct Authority (FCA)
- Competition and Markets Authority (CMA)
- Information Commissioner’s Office (ICO)
In addition, the new CRA 2015 provides easier routes for consumers to challenge anti-competitive behaviour through the Competition Appeal Tribunal (CAT).
When something’s gone wrong with a purchase
The following scenarios are considered:
- A good is faulty
- I have a manufacturer’s warranty or guarantee
- Digital content is faulty
- A service has not been carried out properly
- Mixed supply contracts
- A good I bought on the internet hasn’t arrived
- If the trader has deliberately misled me?
A good is faulty
If the good was purchased before 1 October 2015, then the SGA 1979 will apply.
Library briefing paper, Sale of Goods Act 1979, provides a detailed overview of a consumer’s statutory rights to return a defective good under the Act. In summary, under the SGA 1979, goods must be:
- fit for their normal purpose and fit for any particular purpose that the buyer has made known to the seller
- the same as they have been described, either by the seller (when describing them) or in any written description (for example, in packaging, display signs, etc.)
A consumer’s statutory legal rights are enforceable against the retailer, not the manufacturer. It is the responsibility of the retailer that the goods he/she sells are of satisfactory quality. The SGA 1979 works on a chain system. If someone claims against a retailer, they, in turn, may claim against the wholesaler, who can claim against the manufacturer.
If the faulty good was purchased on or after 1 October 2015, then the new CRA 2015 will apply.
Core consumer rights under the new Act are as follows:
- Right to get what you pay for – all information about the main characteristics of the goods, including statements made in advertising or on labels, to form part of the contract.
- Right to have faults in what you buy put right – clearer tiered remedies if a consumer’s rights are breached, including a mandatory 30-day period in which to reject faulty goods.
- Goods must match a model seen or examined, except to the extent that any differences are brought to the consumer’s attention before he/she enters into the contract.
Where goods do not conform to the terms of the contract and the terms implied by the CRA 2015, the following statutory remedies are available to the consumer:
- A 30-day short term right to reject faulty goods and obtain a full refund (known as the ‘short term right to reject’). Time is paused in circumstances where the consumer agrees to the faulty good being repaired, with a final right to reject the good if it is still faulty (known as ‘the final right to reject’).
- The consumer need only accept one repair or replacement before moving on to the final remedies of price reduction or rejection and refund (i.e. the ‘final right to reject’).
Importantly, the CRA 2015 sets limits and conditions around a trader’s right to make a ‘deduction for use’ if a consumer exercises his final right to reject within 6 months of purchase.
I have a manufacturer’s warranty or guarantee
If a good has an inherent fault, the retailer cannot evade responsibility by simply referring the consumer to a manufacturer’s guarantee. A guarantee does not replace or limit a consumer’s statutory rights. Consumers are entitled to rely on the remedies available to them under legislation rather than their rights under a guarantee if they wish.
Digital content is faulty
For the first time, consumer statutory rights on digital content have been set out in legislation. The CRA 2015 gives consumers a clear right to repair or replacement of faulty digital content (such as downloadable apps, films, computer games, music downloads, e-books and computer software). Specifically, the supply of digital content is regulated when it is supplied:
- for a price; or
- free with goods and services which the consumer has paid for and would not be generally available to consumers otherwise.
Digital content must comply with certain standards, including implied terms of satisfactory quality, fitness for purpose, and compliance with description. In addition, there is an implied term that the trader has the right to provide digital content to the consumer.
Where digital content does not conform, the consumer can call upon the following statutory remedies: repair or replacement; or a price reduction. The repair or replacement must be performed within a reasonable time and without causing significant inconvenience to the consumer. A price reduction can be up to the full amount of the price paid for the digital content (i.e. a full refund).
Unlike with the sale of goods, there is no right to reject non-conforming digital content and obtain a full refund. The one exception is where the trader had no right to supply the digital content (e.g. pirated content).
A service has not been carried out properly
Again, the date a consumer entered into a contract with a trader for a service (such as plumbing, installation of double-glazing, or a building project) will decide which legislation applies: the Supply of Goods and Services Act 1982 (‘SOGASA 1982’) or the new CRA 2015.
If the service contract was agreed before 1 October 2015, it will still be governed by SOGASA 1982.
The SOGASA 1982 applies different standards to the two halves of the contractual obligation. On the first half (i.e. the provision of parts) there is strict liability in respect of quality and fitness for purpose of the goods supplied. The goods must be:
- of satisfactory quality;
- fit for its purpose; and
- as described
In respect of the second half of the contract (i.e. the provision of work) there is an implied duty to:
- carry out the work with ‘reasonable’ care and skill; and
- finish the work within a ‘reasonable’ time unless a specific date for completion has been agreed
Generally, when a complaint is made, the consumer should allow the trader an opportunity to rectify the problem. In the absence of a statutory definition of what is meant by “reasonable”, the consumer may need to ask an independent expert to give their opinion on the work in question or to test a repair. Ultimately, if a dispute cannot be resolved, the only option may be to consider legal proceedings.
If the service contract was agreed on or after 1 October 2015, then the new CRA 2015 will apply.
Under the CRA 2015, all consumer services must be provided with “reasonable care and skill”. There are express provisions that the price paid must be reasonable, and the services must be performed within a reasonable time. It follows from this that services will be “non-conforming” if they are not performed with reasonable care and skill, not performed within a reasonable time, or not performed in line with information given about the service.
Where services do not conform to the contract, the following statutory remedies are available to consumers:
- right to require repeat performance; or
- right to a reduction in price
The consumer can claim a price reduction when:
- the service is not performed in line with information given about the trader;
- the service has not been performed within a reasonable time;
- it is impossible to re-perform the service; or
- the consumer has requested a repeat performance, but the service has not been re-performed within a reasonable time or without significant inconvenience to the consumer
Importantly, under the CRA 2015, spoken or written voluntary statements made by the trader, about the trader or the trader’s service, may be treated as binding contractual terms.
Further information is available in the Library briefing paper, “Consumer Rights Act 2015“(CBP 6588). Citizens Advice has also published online a useful guidance note, “If you’re not happy with a service.”
Mixed supply contracts
It is possible for a consumer to agree a contract which provides for a mixed supply of goods and services or digital content. In such cases, the consumer must apply the relevant provisions of the CRA 2015 to the relevant parts of the contract.
A good I bought on the internet hasn’t arrived
As a first step, the consumer should contact the seller to find out where it is. It is the seller’s legal responsibility to make sure the item is delivered to the consumer. If the item doesn’t turn up, the consumer is legally entitled to a replacement or refund.
If the consumer thinks that the seller has deliberately broken the law (e.g. by taking their money but not delivering the good), they can report the trader to Trading Standards. Depending on the circumstances, Trading Standards may be willing to investigate.
If a trader has deliberately misled me?
Action may be taken if a trader has deliberately misled the consumer (e.g. if a good is deliberately advertised at the wrong price). The Consumer Protection from Unfair Trading Regulations 2008 (known as the “Unfair Trading Regulations”), came into force on 26 May 2008 and implement in the UK the Unfair Commercial Practices Directive (2005/29/EC). The Regulations apply to the whole of the UK and, in the main, apply to business-to-consumer practices.
Under the Regulations, there is a duty to trade fairly and honestly with consumers. The Regulations protect consumers from unfair or misleading trading practices and ban misleading omissions and aggressive sales tactics. As of 1 October 2014, amendments have been made to the Regulations which give consumers new rights of redress if they have been the victim of misleading actions or aggressive selling. A Library briefing paper provides an overview of the Regulations.
In addition, Part 2 of the CRA 2015 has reformed the unfair contract terms in consumer contracts regime. This new regime includes:
- a “fairness test” for enforceability of terms
- a provision that the main subject matter of the contract or terms that set the price are only exempt from the test of fairness if they are “transparent and prominent”
- a “grey list” of potentially unfair clauses in consumer contracts, which has been extended
- the application of the fairness test to consumer notices (and not just contracts)
How to resolve a consumer dispute?
Depending on the circumstances, there may be various options available, including:
- Court action
- Alternative Dispute Resolution (ADR)
- Claim against the credit card provider
- Debit card chargeback
- Indemnity Insurance
Each option is considered below.
Defended cases in the civil courts are assigned to one of three tracks, one of which is the small claims track (the others are the multi-track and the fast track). The small claims track is supposed to provide a simple and informal way of resolving civil disputes (including consumer matters). The financial limit for the small claims track, for many types of claim, is currently 10,000. The rules and procedures are designed to be less formal, and more accessible to litigants in person. Only limited costs are recoverable in small claims proceedings.
However, court action should be a last resort, begun only if a dispute cannot be resolved by negotiation. Before beginning any court proceedings, the consumer should seek proper legal advice either from a solicitor or a CAB adviser on the merits (or otherwise) of their case and their chances of success (see below).
Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) describes a range of methods designed to avoid the need to go to court. Usually these methods are a cheaper and quicker route for resolving a dispute. The most common forms of ADR are:
- mediation, where an independent third party helps the disputing parties to reach a settlement; and
- arbitration, where an independent third party makes a decision (based on the evidence) that is binding on one or both parties
Further information about mediation is available on the Civil Mediation Council website. The County Court also offers free telephone-based mediation through its Small Claims Mediation Service – but only if both parties agree to it.
The “ADR Regulations” (specifically, the Alternative Dispute Resolution for Disputes (Competent Authorities and Information) Regulations 2015 and the Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015) came into force on 9 July 2015.Under the Regulations, if a dispute cannot be resolved, the trader is required to give the consumer details of an approved ADR body and indicate whether he intends to use it. The trader is not obliged to use an ADR body. Ultimately, if a settlement cannot be reached, even after ADR, there may be no option other than to refer the matter to the court.
A Library briefing paper on “Alternative Dispute Resolution (ADR) and consumer disputes” (CBP 7336) outlines the main provisions of the new ADR Regulations. Information is also available from Citizens Advice and from the Gov.UK website.
Possible claim against a credit card provider
In certain circumstances, if the good, digital content or service was bought using a credit card, the consumer may be able to enforce their rights against the credit card company instead of the trader. This is useful in situations where a supplier refuses to help or has gone out of business.
Specifically, section 75 of the Consumer Credit Act 1974 (CCA 1974) makes the credit provider “jointly and severally liable” with the retailer for any breach of contract or misrepresentation by the trader, provided the item cost between £100 and £30,000. This protection applies to purchases made over a counter, online or by phone.
It would be advisable for a consumer to seek proper legal advice from a CAB adviser on whether section 75 of the CCA 1974 would be relevant to their case.
Debit card – chargeback
If a good was bought using a debit or prepaid card (such as a Visa, MasterCard or American Express card) the buyer of the good may have the benefit of a “chargeback” scheme. Chargeback provisions allows consumers to claim back money spent on goods which do not arrive or are faulty, or where the trader has become insolvent.
There is usually no minimum or maximum limit to the amount that can be claimed (e.g. chargeback can apply to card transactions under £100) but there are time limits. Usually, a consumer must make a chargeback claim within 120 days of when they bought the goods or service, but this can vary; the consumer will need to check the precise terms of their chargeback agreement.
It is important to note that the provision of chargeback scheme is not a legal requirement; it is part of the card issuer’s terms and conditions. As such, there are no guarantees that a card provider will be able to get a customer’s money back for them.
In respect of the delivery of poor services (such as building works or home improvements), the constituent should check whether or not the trader in question carries professional indemnity insurance (generally known as a ‘contractors’ all risks policy’) which he/she might benefit from. The constituent should also contact their existing household insurer to see what cover for risks/damage/liability they provide.
If work has been left unsafe, the consumer should report the matter to their local Trading Standards Office. The office may wish to inspect the workmanship and may take action.
Where to go for help and advice?
In respect of free help and advice, there are various options for the consumer to consider, including:
- Consumer Ombudsman
- Citizens Advice
- Trading Standards
- Statutory regulators
- Trade bodies and professional associations
The Library’s briefing paper, “Legal Help: where to go and how to pay”, may also be of help.
Before a matter can be raised with the Consumer Ombudsman the trader must have been given a reasonable opportunity to resolve the complaint. Once a complaint has been registered, the Ombudsman will contact the company and attempt to reach a resolution that both parties are happy with. The Ombudsman may ask the consumer to provide evidence to support their case. To register a complaint, the consumer should complete the online complaint form.
Consumers can seek free legal advice from their local Citizens Advice Bureaux (CAB). Consumer guidance and information is also published on the following websites depending where in the UK the consumer lives:
Each website has a useful search tool to enable people to find their nearest CAB.
CAB advisers may assist the consumer in writing formal letters to the trader concerned in order to try to resolve a dispute. However, Citizens Advice will not begin court proceedings on a consumer’s behalf.
A consumer can report a trader to Trading Standards if, for example:
- they misled the consumer into buying their products or services;
- they pressured the consumer to buy something they didn’t want to buy;
- they sold the consumer an unsafe or dangerous item;
- they failed to carry out services properly (for example, their work left the consumer’s home in a dangerous state); or
- they sold the consumer a fake or counterfeit item
To report a trader to Trading Standards, the consumer would first need to call the Citizens Advice consumer helpline and report the matter to them. An adviser will assess the problem and will pass the case on to Trading Standards if appropriate. (If the consumer lives in Northern Ireland, he/she would need to contact Consumer line in order to report a trader to Trading Standards). Alternatively, the consumer could report a trader to Trading Standards using an online form or by writing to the consumer helpline.
Again, Trading Standards cannot begin legal proceedings for compensation on behalf of an individual consumer.
Several different types of statutory regulators operate in the UK. Some regulators are required to provide consumers with access to a free or low-cost conflict resolution scheme in the event of a dispute. By way of illustration only, the following organisations are all statutory regulators:
- Financial Conduct Authority (FCA)
- Solicitors Regulation Authority
- Civil Aviation Authority (CAA)
- Office of Rail and Road (ORR)
- Ofcom – independent regulator and competition authority for the UK communications industries
- Phonepayplus – regulator for phone-paid services in the UK (as part of Ofcom, it replaced ICSTIS)
- Ofgem – the Office of the Gas and Electricity Markets
- Ofwat – the Water Services Regulation Authority
- Utility Regulator – regulating electricity, gas, water and sewerage industries in Northern Ireland
- Water Industry Commissioner for Scotland
- Advertising Standards Authority (ASA)
- Food Standards Agency (FSA)
Trade bodies and professional associations
Many different types of trade bodies and professional associations operate in the UK; many reputable tradesmen will belong to a trade body and abide by its membership rules. Importantly, many trade bodies provide consumers with access to a free or low-cost conflict resolution scheme. By way of illustration only, the following organisations are all trade bodies:
- Federation of Master Builders (FMB)
- National Association of Estate Agents (NAEA).
- Association of British Travel Agents (ABTA)
- Direct Selling Association (DSA)