The Consumer Rights Act 2015

The Consumer Rights Act 2015 came into force on 1st October 2015.

The Act is designed to consolidate eight different pieces of legislation into one Act - in order to make the law and implementation simpler for both business and consumers. The Act also takes account of the growth of digital and download services by providing the same protections as those already in place for physical goods.

The new Act applies to the supply of goods, services, and digital content.

It is important to remember that the Act applies to businesses and consumers, and not business-to-business relationships.


Consumer Defined
A consumer is defined as - "an individual acting for purposes that are wholly or mainly outside that individual's trade, business, craft or profession". This definition is actually wider than previous definitions of a consumer.

The significance of this is that there may be situations where a consumer buys a product that is usually used for business purposes, however, the person buying it does not normally carry on that business. They could argue that they are a consumer and so can benefit from the additional protections given to consumers. An example of this could be a person who buys a cement mixer for building work on their home and it breaks down. Business/trade users usually buy the mixer, but in this instance, the person who bought it is not running a building business - and so could rely on consumer protection under the Act.


Trader Defined
The definition of a trader is more straightforward - "a person acting for purposes relating to that person's trade, business, craft or profession, whether acting personally or through another person acting in the trader's name or on the trader's behalf".


Consumer Rights Defined
Under the Act consumers can expect the following basic statutory rights:

1. Any service provided must be carried out with "reasonable care and skill". So a trader must provide as a minimum the level of service that another competent trader in the same trade or profession would provide.

2. Any information given in writing or verbally to the consumer by the trader or their representative is binding if the consumer relies on it. Typically this can include timescales for work to be completed and quotations for the cost of work - if the consumer relied on those and contracted with the trader or professional because of them under the Act those written or verbal statements form part of the contract.

The highly significant point here is verbal representations, (more on this below). Basically, a trader should keep all promises to their written contract and not promise anything else verbally.

3. The service provided must be done at a reasonable price. Many traders will provide written quotations with clear pricing. Professionals will usually provide details of their hourly rates or may agree a fixed price for a piece of work. The issue occurs where the price is not clear before the start. In this case, the trader must charge a reasonable amount. What is reasonable is judged against what other traders in the same field would charge. If the trader over-charges it will be fairly obvious.

4. The service must be carried out within a reasonable period of time. If the contract does not give a completion date (and many do not) the timescale must be reasonable. Reasonable does depend on the circumstances of the service provided, for example where specialist skills or work are required or the work is quite complex.

A recent case we came across was an older, expensive car that required an extensive repair after a crash. The company carrying out the repair took a long time (10 weeks). However, in that time they had to obtain parts direct from the manufacturer in Germany and specific advice regarding the repair process and paint matching. The work was complex and required a very significant amount of work. Even though the time taken was long (had the Act applied back then) the trader could have justified the time taken due to the nature of the work.

On a more mundane level, plumbers will frequently not provide a fixed quote for basic work such as replacing a tap because access to the tap may be difficult and the tap may be heavily corroded and may have to be cut out.


Where a trader fails to provide a reasonable service a consumer has the following possible remedies:

1. Repeat performance - where the trader fails to exercise reasonable care and skill or they breach a requirement that arises from the information they provided - in writing or verbally. The consumer can ask the trader to repeat the service to complete it properly. This must be done by the trader at no additional cost to the consumer, within a reasonable time and without significant inconvenience to the consumer. However, there are practical limitations to this - it may be the service is a one-off event or time sensitive, for example, a wedding video or an auction. If this case a price reduction (refund) is more practical.

2. Price reduction - alternatively where repeat performance is impractical the consumer can ask for a price reduction. The consumer can also ask for a reduction where the service is completed, but not within a reasonable time or where the trader breaches a part of the contract. The reduction can up to 100%. If the service has already been paid for, the consumer should receive a refund.

The Act does not specifically allow the consumer to get another trader to complete the work and then bill the original trader for the work. But under existing consumer law the consumer can still claim compensation against the trader - and then get another trader to do the work properly. This frequently happens when the original trader is so incompetent that the consumer does not want them back.


No Remedies
There are circumstances where the consumer cannot seek a remedy:

1. Where the issue is due to fair wear and tear over time, basically bits fall off bikes and children wreck your house etc.

2. If the service is carried out with reasonable care and skill but does not meet the consumer's desired result, unless the trader and consumer agree the desired result orally or in writing beforehand.

3. Where the consumer goes against advice provided by the trader or requests shortcuts or quick fixes against advice. The risk due to a verbal agreement here is high, so traders are strongly advised to put everything in writing.

4. Where the consumer causes damage or delay through his or her own action or inaction.

5. Where the consumer simply changes their mind - the flock wallpaper or feature-wall scenario. For example, the "amusing" situation recounted by a decorator who spent three days painting an interior in expensive Farrow & Ball paint as directed by the lady of the house only for the man of the house to return from a business trip at the end of the third day and combust on seeing the shade he disagreed with all over the house - in this situation the decorator still gets paid in full.

Though it is important to note that a consumer can change their mind and cancel during any "cooling-off" period. If a consumer wishes the trader to start work within the cooling-off period the consumer must specifically and in writing contract-out of the period.


Dealing with Complaints
Traders have a legal duty to deal with consumer complaints as promptly as possible. This includes returning calls, replying to letters and emails etc. and addressing the issues complained of. This is covered by the Provision of Services Regulations 2009.


Digital Content & Services
Now that we have become the Netflix generation the law has had to change to keep pace with the growth in digital services and downloads.

The Act is described as the first legislation to cover this, however the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 covers digital services, but really only in relation to cancellation rights - and not very successfully either.

The Consumer Rights Act states the supply of digital services will be treated the same way as the supply of goods (physical goods). The goods must be of satisfactory quality, fit for purpose and also conform to the description provided by the trader. Very importantly, this description can be written, but it can also be verbal, basically what was said to you as a consumer at the time. (More on this below.)

However, the Act only applies to digital content or services where they are supplied for a price - so not freebies, or

Where they are supplied as an addition to other services that the consumer did pay for, and are available to the consumer because they paid for the other goods. So basically goods bundled in free with other paid-for goods. In this situation, if the free product actually causes damage to say your computer or phone the trader is still liable for this - as a contract has been formed between the trader and the consumer because the consumer has paid for some services. These are called "mixed contracts", for example, a consumer purchases a computer game on a disc and the game comes with additional downloadable content, (known as DLC to gamers).

When the Act talks about goods supplied for a price the definition is quite wide and includes gift vouchers, tokens, virtual money or in-game currency. We assume this could be taken to include virtual money earned in game, as it has a value because the person spent time earning it playing the game.

The Act also allows and recognises that downloads such as software and games frequently have minor issues and allows (and therefore encourages) traders to provide updates, fixes, and patches to address these.

For digital products, the consumer can request a repair or replacement. The trader must provide a repair or replacement within a reasonable time and with minimal inconvenience to the consumer.

However, the consumer cannot insist on an individual repair on his or her device if this is impractical and costly for the trader - in this instance, a replacement is the most practical option.

If not resolved, the consumer can request a price reduction should repair or replacement not be possible, or it is not carried out in a reasonable time or it inconveniences the consumer. All this is nice and legal - and hypothetical. The reality is that a trader will provide an almost immediate replacement and if this cannot be made to work they will proceed to a refund, but many will request that the consumer removes the product from their device.

Importantly - where the consumer can show the digital product is defective within six months of it being first supplied it is taken that the product was defective at the time of actual sale.

The area where the Act falls down is the lack of recognition that in the case of digital goods and services the vast majority of problems stem from issues beyond the trader's direct control, such as the consumer's own phone, tablet or computer. Many people have devices that are barely functioning after years of poor maintenance or is the case of phones overloaded with existing apps. Another issue is interrupted downloads caused by the consumer's Internet access dropping during the download, this regularly occurs with Wi-Fi access. The Act fails to address these real-world issues.


Watch What You Say
Under the Act, a consumer can rely upon anything said by a trader (or anyone providing a service or representing a service provider) that encourages the consumer to enter into the contract.

We would advise not saying (as saying could be promising) anything outside the contract. Basically, put everything in writing and always refer back to the written contract. Do not have informal chats with consumers where you could be tied into providing the earth, or more.

To give you an idea of how potentially far-reaching this could be - universities are now training academic staff on what to say at open-days regarding course details and provision. Everything must now be couched in terms of what "may" be provided "if sufficient" numbers of students sign-up for a course or a module on a course.

This could potentially be a trap for virtual every organisation and will require significant additional staff training to avoid.


Financial Services Industry Excluded
The Act does not apply to the financial services industry (including banks) as their conduct is already governed by existing regulations enforced by the Financial Conduct Authority (FCA)


How Far Reaching?

The potential liability surrounding verbal agreements or additions cannot be overstated. It will be interesting to see the case law that emerges in the coming months and years regarding the Act.

Though in some respects all the Act does is codify the levels of customer service already offered by many companies in a competitive market - compliance with the Act will not be a struggle for these firms. However, it will be for some who have not adequately invested in the services and support they provide.