Big changes are afoot to consumer law in the UK this year, with implications for all businesses selling goods or services to consumers.
First up is implementation of the EU Consumer Rights Directive, due to come into force 13 June 2014 and affecting all consumer contracts entered on or after that date. Among the more eye-catching is reform of cooling off and cancellation periods for doorstep sales and distance sales, ie those concluded with a consumer mainly by mail order, telephone or online. For both types of sales, there will be now be a statutory minimum cooling off period for the consumer of 14 calendar days and a 12 month cancellation period if the business fails to provide to the consumer the relevant information on the right to cancel. For all consumer contracts, however made, a business must now deliver goods within 30 days, unless otherwise agreed, a change from the previous requirement to deliver “within a reasonable time”.
It would be wrong though to think that this is all about empowering consumers. This is a “harmonising” directive, with the aim of providing consistency of consumer law obligations across the EU, which currently has 27 different regimes, and hence reducing the compliance cost and headache for businesses trying to sell cross- border and grappling with all the different consumer laws.
Another key element of the Directive, already in force in the UK, is a ban on excessive payment surcharges when a consumer pays by methods such as credit card, debit card or cheque. Such a charge, in addition to the headline price, is banned if it exceeds the cost to the business of using such a payment method. Businesses with fewer than 10 employees and new businesses which began trading after 6 April 2013 were exempt, but will now also be subject to the rules from 13 June 2014.
This is not though the end of the reform. Parliament is currently scrutinising the Draft Consumer Rights Bill covering, amongst others, new rights and remedies for consumers in the supply of goods, services and digital content, unfair terms in consumer contracts and new enforcement powers. Parliament is also scrutinising new regulations protecting consumers against misleading and aggressive practices and demands for payment. Consumers using suppliers in certain sectors (currently energy, current accounts, credit cards and mobile phones, but with the possibility of this being extended to other sectors) will have the right to obtain their transaction and consumption data. There is also structural reform taking place with the OFT offloading its powers and functions to bodies such as Trading Standards, Citizens Advice and a new Competition and Markets Authority, leading to its eventual abolition in April 2014.