What do the Consumer Protection (Amendment) Regulations 2014 mean for your business?

The Consumer Protection (Amendment) Regulations 2014 come into force with effect from today 1 October 2014 and applies to any contract entered into on or after that date.

Misleading and aggressive commercial practices can be a major problem and a vast number of consumers have fallen victim at some point.  Under the existing laws that govern misleading and aggressive practices it can be difficult for consumers to get their money back and the government is looking to combat this with its latest consumer protection legislation.

New Rights of Consumer Redress

Under the Regulations consumers will have the right to seek redress and if appropriate, compensation when they have been targets of misleading or aggressive commercial practices from businesses. If they feel that they have been treated unfairly, consumers will have the right to unwind, claim discounts on contracts and have a right to claim damages.

A right to unwind: Presuming the product bought has not been fully consumed or the service fully performed, a consumer is entitled to unwind a contract, allowing them to be put back into the position they were in before entering into the contract provided they inform the business of this within 90 days of the date they entered into the contract. In such circumstance the consumer may be entitled to a full refund.

A right to discounted contracts: Consumers who do not exercise their right to unwind a contract may still be able to claim a discount on the price paid for the goods/service in respect of past or future payments due under the contract. Depending on how serious the prohibited practice is, the consumer may seek a discount between 25% and 100%. The level of seriousness is determined based on the incident complained of, the behaviour of the business and the impact on the consumer at that time.

A right to seek damages: Under the Regulations consumers are able to claim damages for two types of losses: (a) any financial losses; and (b) alarm, distress or physical inconvenience that may have been caused due to the misleading or aggressive practice. Businesses do however have a defence of ‘due diligence’, available if a business can prove that the loss was caused as a result of events that were beyond their control and that they took all reasonable precautions to avoid the occurrence of the prohibited practice.

It will be interesting to see to what extent the Regulations will impact on businesses and how easily consumers will be able to assert these rights as a consumer. They will still have to bring civil proceedings against a business to enforce their rights. Whilst the Regulations do provide businesses with some defences such as a mistake, due diligence and reliance on information from a third party, a business has to take all precautions to avoid any occurrences of this kind.

The government has issued guidance for businesses and consumers on the new rights that are coming into force:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/343753/bis-14-1430-misleading-and-aggressive-selling-rights-consumer-protection-amendment-regulations-2014-guidance.pdf

Before entering into a contract with a consumer a business need to be aware of what constitutes a prohibited practice.It may be necessary to make the appropriate references to the Regulations in your terms and conditions and literature as the Regulations apply equally to advertised products as they do to face to face sales.

For advice and assistance on how the Regulations or recent changes to consumer law in general may 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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