Consumer Protection Regulations 2014 – Warning To Businesses With Yet More Consumer Protection To Come

Consumers are set to gain yet more protection through the coming into force of the Consumer Protection (Amendment) Regulations 2014 (‘the Regulations’) later this year, providing them with the right to seek redress from businesses if they feel that they have been unfairly treated.Consumers will be able to seek compensation when they have been the victim of misleading actions or aggressive commercial practices serving as another warning to businesses to monitor their business practices, materials and terms following the implementation of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

Misleading actions would arise out of a business deceiving a consumer into purchasing goods or services through the use of false information.  Businesses will need to be aware that under the Regulations, a consumer shall be entitled to receive damages; to receive discount on the amount paid or payable; and be entitled to unwind the transaction such that the consumer is put back into the position they would have been in had they not entered into the contract.

Under current rules the consumer has no direct right to redress with the existing rights appearing complex and of little use to the consumer.  Subject to certain exceptions, the Consumer ProtectionRegulations 2014 will introduce standard remedies allowing consumers to:

  1. A right to unwind – if a consumer wishes to unwind a contract, they must clearly state this to the business within 90 days of the date the contract was made (provided the product has not been consumed) entitling the consumer to a full refund;
  2. A right to discounted contracts – provided that a consumer has not exercised their right to unwind the contract, they may seek a discount of between 25% & 100% for past or future payments, depending on the seriousness of the business’ prohibited practice, the impact it has on the consumer and the time already elapsed before the claim is brought.
  3. A right to seek damages – damages may be sought for a financial loss and/or distress, physical inconvenience or discomfort.  Businesses do however, have a ‘due diligence’ defence in relation to the right to damages if they can prove that the loss was caused as a result of events beyond the business’ control (amongst other things) and they took all reasonable precautions to avoid the occurrence of the prohibited practice.

Before entering into a contract with a consumer, businesses need to be aware of what constitutes a prohibited practices to ensure that they do not fall foul of the new 2014 Consumer Protection Regulations.  Businesses must not market their products in such a way that it appears misleading to the consumer and ensuring that its materials and terms and conditions are compliant is of vital importance.  For advice and assistance on how recent changes to consumer law have and will affect your business contact the Forbes Solicitors Business Law department on 0800 037 4628 or send an email enquiry using our Contact Form.

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