Over the last five years or so, the law relating to how businesses deal with consumers over the internet (including through mobile phones) has changed significantly. If you haven’t made changes to your website over this period, then you are unlikely to be operating in accordance with the law. This could have serious consequences ranging from customers unexpectedly being entitled to a refund even if there is nothing wrong with your goods or services to enforcement action being taken by trading standards.
However, with Brexit looming and given that much of the UK’s consumer laws have their origins in the EU, is it still necessary to comply with consumer laws?
Defective goods or services
A completely new tiered set of remedies for defective goods was introduced by the Consumer Rights Act 2015 (CRA). This is very much a domestic UK piece of legislation and so will not be affected by Brexit. Under the CRA:
- consumers have a right to reject defective goods within 30 days of purchase and get their money back. This means that, where goods prove defective during this 30-day period, a business cannot simply offer a replacement or a credit note/gift voucher in return.
- after this 30-day period, consumers continue to have a right to request a repair or a replacement. If the business fails to repair or replace, the consumer can reject and get their money back or keep the goods and get a reduction in the price paid.
Under the CRA, contracts with consumers must be fair. The CRA contains a revised list of potentially unfair terms. The question of fairness will now also extend to price where the price is not transparent and prominent. Businesses must therefore ensure that their terms and websites do not include any potentially unfair terms. Clever or hidden legal wording is therefore unlikely to help a business avoid its legal obligations for defective goods or services.
Under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (the ADR Regulations) businesses must provide consumers who wish to pursue a complaint beyond the business’s internal procedures with:
- a statement saying that the consumer’s complaint is unable to be solved internally;
- the name and website address of an alternative dispute resolution (ADR) scheme (basically an approved process for the resolution of a dispute outside of court proceedings) which the consumer can use to solve the complaint; and
- a statement saying whether the business is legally compelled to or, if not, prepared to submit to the ADR scheme.
Bizarrely this means that a business must give the consumer details of an ADR scheme but the business does not have to agree to use that scheme!
The ADR Regulations implement an EU Directive. As such the ADR Regulations are part of UK law and, therefore, will remain UK law even following exit from the EU unless the UK decides to repeal the ADR Regulations.
Under what is known as the EU ODR Regulation a business must provide a link from its website to the European Online Dispute Resolution platform website. This platform is intended to speed up disputes between consumers in one EU member state with a business in another. Use of the platform is not compulsory for a business. Nevertheless the business is legally obliged to provide the link even if it only trades in the UK and has no intention of seeking to resolve disputes through the platform.
As this requirement to provide a link comes from an EU regulation as opposed to an EU directive, it is therefore directly applicable EU law. As such it will cease to be UK law upon the UK leaving the EU. In the meantime it continues to be applicable law in the UK. There is unlikely to be much appetite for UK authorities to enforce a provision that will cease to be legally effective in the UK once the UK leaves the EU. That said, this lack of appetite cannot be guaranteed and, as it is such an easy provision to comply with, the sensible and safest course of action is to provide the relevant link.
New website information and cancellation rights
The Consumer Contracts (Information, Cancellations and Additional Charges) Regulations 2013 (Consumer Contracts Regulations), which came into force in June 2014, impose many obligations on businesses selling to consumers through websites. These include:
- granting consumers a period of 14 calendar days from receipt of a purchase to cancel that purchase in case they change their minds;
- an obligation to make available to consumers a model cancellation form;
- an obligation to provide certain information to consumers both before and after making a sale. There are over 20 possible items of information that need to be provided;
- an obligation to label any online order button with the words “order with an obligation to pay” or similar wording;
- a prohibition on certain practices such as the use of pre-tick boxes for payment of additional services and the use of premium rate customer telephone helplines.
As the Consumer Contracts Regulations implement an EU Directive, again the Consumer Contracts Regulations will remain part of UK law following exit from the EU unless the UK decides to repeal them.
With the exception of providing a link to the European Online Dispute Resolution platform website, we see absolutely no reason to believe for one moment that the UK will have any wish to change any of the current consumer laws relating to online trading with consumers. Accordingly businesses cannot use the Brexit decision as an excuse for non-compliance. Those businesses who have not already updated their websites, terms of business and procedures should therefore take steps to comply with these new consumer laws as soon as possible.
Author: Declan Goodwin, Associate Director, Solicitor, Vistra Corporate Law
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