The Consumer Rights Act
The Consumer Rights Act 2015 is the law helping buyers to obtain redress when their purchases 'go wrong'. It is in the interest of anyone who sells goods or services to understand the Act and the responsibilities they have under it.
Essentially, the Act states that what you sell must fit its description, be fit for its purpose and be of satisfactory quality. If not, you - as the supplier - are obliged to sort out the problem.
As a business you are required to comply with the Act. Doing so can enhance your customer relationships.
This guide explains the Act and how to deal properly with complaints made under it. Remember that while the Act generally applies to protect individual consumers, it can also apply to the sale of goods between businesses.
Your responsibilities at the time you sell goods
Whenever you sell goods to a customer you have certain responsibilities.
You must make sure the goods 'conform to contract'. This means that they must be as you describe them. For instance, a car must be the exact model that you say it is, of the correct engine size and with the same number of previous owners as you tell the customer it has had.
By law, all descriptions - whether verbal, written, implied or given in an illustration - must be accurate and not misleading. If you describe goods inaccurately, the customer may have a claim against you for breach of contract.
Quality of goods and services
The goods or services must also be of satisfactory quality. Quality is a general term, which covers a number of matters including:
- fitness for all the purposes for which goods of that kind are usually supplied
- appearance and finish
- freedom from minor defects
You could also be held liable if the use of products or services you supply causes any damage, injury or death. However, most of the responsibility lies with the manufacturers and producers. See product liability.
Fit for purpose goods and services
You must also ensure the goods or services are 'fit for purpose'. This means they should be capable of doing what they are intended to do. For example, in the case of a pen it should be able to write. Also, if a customer has made clear they require the pen for a specific purpose - for instance, calligraphy - and you have confirmed that it will be suitable, then it must be fit for that purpose.
Not only are these your legal responsibilities - they make sound business sense if you want to attract and retain customers.
Your responsibilities if you sell services
Whenever you sell services to a customer you have certain responsibilities.
The Consumer Rights Act 2015 states that a person providing a service must do so with 'reasonable care and skill'. It also requires the service to be carried out within a 'reasonable time' and for no more than a 'reasonable charge' unless there was prior agreement with the customer about these matters.
What does 'reasonable' mean?
The definition of the term 'reasonable' will vary, depending on the circumstances.
If you have agreed a price for your service with a customer, it is not 'reasonable' to change it without a good reason. For example, a good reason would be providing services in addition to those originally agreed with the customer.
Similarly, if a defined timescale has been agreed with your customer for the delivery of services, it should not be changed without good reason and agreement with the customer.
Goods supplied during a service
Any goods you supply as part of delivering your service will be subject to the conditions under the Act which cover goods. For example, if you are a central-heating engineer, your service would be installing a central heating system, but you would also be responsible for the goods you install, such as pipes, radiators and boilers.
Although there is more responsibility attached to the manufacturers and producers of goods, you could also be held liable if the use of products or services you supply causes any damage, injury or death. See product liability.
Consumer rights when buying goods
If you sell goods that don't conform to contract you are legally obliged to resolve the problem if your customers seek redress. This includes goods that aren't as described, are unfit for their purpose or of unsatisfactory quality.
If you have supplied goods that do not meet the requirements above, there is a short period during which the consumer is entitled to reject them. This short-term right to reject goods lasts for 30 days unless the expected life of the goods is shorter, eg highly perishable goods.
If the consumer asks for repair or replacement during this initial 30-day period, the period is paused during the time it takes for this happen. This means the consumer will have the remainder of the 30-day period, or seven days (whichever is longer) to check whether the repair or replacement has been successful and to decide whether to reject the goods.
Consumer right to a refund
When a consumer rejects goods they can claim a refund. This would be a full refund or, in the case of hire, a refund for any part of the hire that was paid for but not supplied. A refund must be given without undue delay, within 14 days of the trader agreeing that the consumer is entitled to a refund.
The trader is responsible for the reasonable cost of returning the goods except where the consumer is returning them to the place where they got them, eg a retail shop. However, the consumer is not required to return the goods to this place unless this was agreed from the outset as part of the contract. Even if the consumer returns goods to the shop, they may sometimes be able to claim that cost from the trader. For example, where a motor vehicle breaks down and the consumer has to pay for a recovery service to return it.
In law you have a responsibility to your customer for up to six years from the date of purchase. During this period, you are legally obliged to deal with any claim of breach of contract.
Consumer rights when buying services
Customers have a number of rights under the Consumer Rights Act 2015 if they aren't satisfied with a service you have provided.
If the trader breaches the contract by failing to meet the required standards for the supply of services the consumer can expect the trader to put things right.
In these circumstances, the law says that the consumer is entitled to repeat performance of the service or to a price reduction.
This remedy is available where the trader fails to exercise reasonable care and skill or where they breach a requirement arising from information they have given about the service. The consumer can require the trader to repeat the service in order to complete it properly. This work must be done at no cost to the consumer, within a reasonable time and without causing significant inconvenience to the consumer.
The consumer cannot ask for repeat performance where it would be impossible to finish providing the service to the required standard
The consumer can claim a price reduction where repeat performance is impossible or cannot be done within a reasonable time and without causing significant inconvenience. A price reduction can also be claimed where the service is not done within a reasonable time or where the trader breaches a requirement arising from information they have given about something other than the service itself.
The amount of the price reduction will depend on how serious the breaches were, and it can be anything up to 100% of the price. If the consumer has already paid in full or in part for the service, he may therefore be entitled to some money back.
Consumer rights when buying digital content
The Consumer Rights Act 2015 defines 'digital content' as meaning 'data which are produced and supplied in digital form'. This covers many digital-formats including:
- computer games
- virtual items purchased within computer games
- television programmes
- computer software
- mobile phone apps
- systems software for operating goods - for example, domestic appliances, toys, motor vehicles, etc
Under the law certain standards apply to every transaction for the supply of digital content. The digital content must be:
- of satisfactory quality
- fit for a particular purpose
- as described
All of the statutory rights for the supply or intended supply of digital content apply only if the consumer has to pay a monetary price as part of the contract.
Payment may be directly made using money or indirectly by means of some other facility, eg a gift voucher, a token or virtual money in a game. Digital content can be sold as an item requiring a single payment or by means of an ongoing subscription allowing access to the digital content over a period of time.
If digital content is given away (for example, free computer system software) the statutory rights do not apply. This does not mean that the trader is not liable if the digital content causes damage.
What do I have to do if a customer complains?
If a customer complains about goods or services they've purchased from you, it's essential to establish what your responsibilities are under the Consumer Rights Act 2015.
Ask yourself whether the goods are not as you described them, unfit for their purpose, or of unsatisfactory quality. Ask if the services you have provided have been delivered with reasonable care and skill within a reasonable time for a reasonable charge.
If the customer does have a valid claim under one of the above conditions, then your next step depends on:
- whether the actual items are goods or services
- whether they are consumers or other traders
If faulty goods are involved and the purchase was made within the previous 30 days, you should offer a refund. The customer may also claim compensation from you either immediately following the sale or up to six years afterwards. This is uncommon, but if a customer does claim compensation and it's a reasonable claim, you can either:
- offer to repair or replace the goods
- pay the appropriate compensation
Consumers have (as opposed to other businesses) additional rights when they make a complaint.
Alternative Dispute Resolution
When there is a dispute between a business and a consumer, there are different options available to help resolve the issue. Alternative Dispute Resolution (ADR) is any process for the resolution of a dispute out of court. Although businesses do not have to agree to use ADR for a consumer dispute, they are required to provide certain information about ADR to consumers.
Additional rights for consumers when they make a complaint
Customers who are also consumers and not other traders have additional rights. These rights last for up to six years after sale.
Consumers are entitled to ask for either a repair or a replacement in addition to their right to a refund. Read more about what to do if a customer complains?
If they ask for a repair or replacement you should honour their request. But if it's impossible or disproportionately expensive to repair a product, you can offer a replacement instead.
Partial or full refund
If neither repair nor replacement are practical options, you can offer a partial or full refund if this would be cheaper for the business. When you're considering whether to give a full or partial refund, you can take account of the benefits the consumer has gained since they bought the goods.
Dispute a claim
If you want to dispute a claim by a consumer for a repair or replacement, remember that for the first six months it's up to you to prove that the fault was not present at the time of sale. However, after six months it's up to the consumer to prove that the goods were faulty when sold.
If a consumer complains about services you have provided then you should offer a repair or appropriate compensation.
What happens if I can't resolve a customer complaint?
If you have tried to resolve a customer's complaint but the situation is 'deadlocked', then what happens next will depend on whether:
- you have acted properly
- the customer decides to pursue the matter
If you accept that the customer's claim was valid under the Consumer Rights Act - but are confident that you have offered the necessary refund, repair or replacement - you may have met your legal obligations even if the customer refuses to accept that.
However, if you're uncertain that what you have offered is sufficient, you should seek advice from Consumerline.
If a customer does decide to pursue a claim, they can use the small claims procedure for goods up to a maximum value of £3,000. You can choose either to defend the claim yourself or appoint someone to represent you. Larger claims can be made through civil actions in the County Court.
Always try to resolve complaints if at all possible. Time spent on defending a legal claim will probably outweigh the time you'd have spent on resolving the matter amicably. Also remember that the inevitable outcome of an unresolved complaint is at least one lost customer and the potential for bad publicity.
When there is a dispute between a consumer and a trader, there are a range of options for resolving the dispute without going to court. These options can often be quicker and cheaper, and lead to a more satisfactory solution, than taking legal action.
The law seeks to promote the use of alternative dispute resolution (ADR) by ensuring that suitable options are available in all consumer disputes. All traders are required to inform consumers whether they are willing to use ADR.
Consumer Rights Act 2015 - what you need to know
The Consumer Rights Act 2015 is the main law helping buyers when their purchases 'go wrong'. If you sell goods or services, it's important to understand the Act and your legal duties.
Sale of goods
Changes to consumer rights when buying goods include:
- Consumers have 30 days to reject a faulty item and ask for a refund
- Traders get one chance to repair or replace a faulty item before the consumer can ask for a full or partial refund
- Goods must also be installed correctly if that is part of the contract
- Traders may have to pay compensation to consumers for any losses they may have suffered as a result of faulty goods
Provision of services
When selling services, your duties include:
- Traders must provide services: with reasonable care and skill; at reasonable cost; and within reasonable time
- If a service is unsatisfactory, the trader is obliged to carry out the service again free of charge or to give a price reduction. Where the service cannot be repeated (e.g. wedding photography) the trader may have to give a price reduction. This may be up to 100% of the total cost.
For the first time ever the law sets out specific rules for selling digital content such as e-books, phone apps, downloaded computer software or games, streamed films or music etc. The rules state:
- Any digital content you sell must be: of satisfactory quality; fit for a particular purpose; and as described
- If you sell faulty digital content, you may have to provide a repair, replacement, price reduction or refund
- Occasionally, a digital content purchase can corrupt the operating system, device or other content such as photos. In those instances the trader is obliged to repair the damaged equipment or content or pay compensation even if the content was a free download.
These new provisions make it easier for consumers to challenge unfair contracts, including hidden charges. Download an introduction to unfair contract terms (PDF 1MB).
Terms that unfairly disadvantage a consumer are not legally binding.
The Consumer Rights Act also obliges the trader to provide the consumer with a statement saying that it cannot resolve the complaint. If the consumer wishes to pursue the complaint, the trader must provide the name and website address of an organisation (called an Alternative Dispute Resolution Provider) that could assist them with their complaint.
The trader must also inform the consumer whether they are prepared to work with that provider to resolve the complaint.