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Consumer Rights Act 2015 - key changes affecting consumer contracts

Most businesses will already be familiar with pre-contractual information requirements and cancellation rules for consumer contracts; under the CRA, such information will now become terms of the contract. As under existing legislation, businesses providing goods and/or services to consumers online or at a ‘distance’ (eg by email or phone) are under various obligations which mean:

  • businesses must provide more details about cancellation rights, return costs and complaints and redress mechanisms;
  • businesses must provide a refund within 14 days of cancellation of the service contract or receipt of goods;
  • the ‘cooling off’ period from when a consumer can voluntarily withdraw from a contract was extended to 14 days;
  • consumers must expressly/actively agree to any additional payment before it is taken (eg pre-ticked box for additional payment is no longer be permitted); and
  • unless agreed otherwise, goods must be delivered within 30 calendar days.

The CRA introduces a broad set of enforcement powers, which will largely be enforced by the CMA and local Trading Standards Services (TSS).

A key change is that the CRA amends the Enterprise Act 2002 to widen the scope of the enforceable undertakings which an enforcer can seek under Part 8 of the Enterprise Act – either through negotiation with a trader who has breached consumer law, or in court. These ‘enhanced consumer measures’ mean that a business could have to:

  • provide redress to consumers who have suffered loss from breaches of consumer law;
  • provide more information to consumers so they can make better informed purchasing decisions; for example, the court could order that a business post an item on their website notifying consumers of their actions; and
  • introduce new compliance measures; for example, make changes to staff training or appoint a compliance officer.

This is a significant development, as under the previous regime enforcers could only seek orders to stop the offending conduct.