New consumer protection legislation

Iain Rrobinson reviews the likely impact of this latest piece of legislation

Consumer rights legislation is to be overhauled in the next eighteen months. New rules from Brussels, concerns over ‘hidden charges’, and the inability of current consumer law to deal adequately with digital downloads mean that a Consumer Rights bill is working its way through Parliament.

Most of the proposed changes are still open to consultation, so not all of these changes will make it into law without untouched.

The main changes are these:

  1. Pre contract information – Businesses must give clear, specific information on the main features of the product or services being sold and the total purchase price. They also have to give the name and address of their business, and any ‘cooling off’ period.
  2. Use of pre ticked boxes for add-on services – These must all be ‘opt-in’, not ‘opt-out’ or pre-selected.
  3. Credit card charges – Businesses won’t be able to make ‘excessive’ charges for paying a certain way.
  4. Premium rate telephone lines – these may well be completely prohibited.
  5. Cooling off periods – Distance sales contracts (for example, online, catalogue or door step sales) to consumers have a ‘cooling off period’ in which customers can change their minds without reason and still be entitled to a refund. The new legislation may double this from seven to fourteen days. Failure to inform a consumer of this right may result in the cooling off period being increased to one year.

Businesses are advised not to panic – this isn’t law yet. Equally, they should not sit on it and do nothing. For instance, it is a good idea for businesses to review their terms and conditions now, before the legislation comes in during 2013 and risks making their contracts unenforceable.

The other change proposed is to consumer rights on digital content. Because one never really ‘buys’ digital content such as downloaded music or apps – one just has a licence to use it and/or store a copy – the law might be changing. It would give consumers rights to transfer their access to it to someone else, require digital downloads to meet description (including trial or demo versions) and be of satisfactory quality. Consumers may even get the right to reject the content and have a refund.

For practical business advice contact iain.robinson@sleeblackwell.co.uk