New powers to protect vulnerable and elderly consumers against rogue traders
Victims bullied or misled into buying goods and services are set to be given new rights to get their money back from rogue traders whose unfair practices cost them billions.
Draft legislation announced by Consumer Minister Jo Swinson today sets out how consumers will also have access to clearer information about any additional costs and more generous time limits for returning goods bought online.
The new proposals amending the Consumer Protection Regulations from Unfair Trading Regulations will:
• give consumers 90 days to cancel a contract and receive a full refund if they have been misled or bullied into agreeing it. After the 90 days consumers can still receive a proportion of their money back. Currently, it is unclear what consumers are entitled to in this situation;
• give consumers new rights to recover payments made to traders who mislead or bully them into paying money which was not owed. Currently, the trader can be prosecuted but the consumer finds it much more difficult to get their money back; and
• they will also have the right to claim compensation for any alarm or distress caused by these practices.
Jo Swinson also announced today details of how the Consumer Rights Directive will be implemented, including measures which will:
• Increase the time limit for returning goods purchased online or by phone from seven days to 14 days after the goods have been received, should the consumer change their mind.
• Ban pre-ticked tick boxes for extras that the consumer may not want or need and that could result in unexpected payment.
• Set out key information consumers should be given by traders before agreeing to purchase, like additional costs or cancellation rights.
In a 2009 report Consumer Focus calculated that the total detriment suffered by consumers as a result of misleading and aggressive practices was around £3.3 billion a year. Earlier Consumer Focus research found that over 60% of the population had been the target of an unfair commercial practice.
• In 7% of cases, the consumer suffered more than £500 worth of loss.
• In 3% the consumer suffered more than £1,000 worth of loss.
Despite the high standards exhibited by the vast majority of businesses, there are traders who seek to exploit consumers. Misleading and aggressive practices are a particular problem for vulnerable and elderly consumers, for example, when they fall victim to misleading or aggressive door step sales techniques.
Consumer Minister Jo Swinson said: "For too long the rules that apply when buying goods and services have been murky for both consumers and businesses. The situation is even worse for vulnerable consumers who are misled into buying something they neither need nor want.
“We want consumers to be confident to shop with a range of traders and to drive rogues out of business. The new rights announced today will mean consumers are entitled to the same level of protection whether they are purchasing goods or services online, at home or in a shop.”
Along with the draft Consumer Rights Bill announced in June, the reforms to consumer law will enhance consumer rights and make them easier to understand and help businesses interpret and apply the law. The changes will boost the UK economy by over £4 billion over the next decade.
Citizens Advice Chief Executive, Gillian Guy said: "Citizens Advice helps with over 77,000 problems with misleading claims and pressure selling a year. A beefed-up approach to tackling misleading and aggressive practices is desperately needed and will be a step towards protecting people from bullying businesses.
People are losing out as they take out services such as insurance, timeshares and home improvements only to later discover it is not what they were promised or wanted.”
Martin Lewis, creator of MoneySavingExpert.com, said:
“This is an important shift of emphasis from the rather arduous and resource-heavy prosecuting of rogue behaviour, towards rights for the individual. Individuals will gain more rights of redress and it’ll be easier for them to change their minds if something fails to live up to the spiel.
“In itself, this strengthens the deterrent for companies which target the vulnerable. The important part will be ensuring the system makes it relatively easy for people to enforce the rules – or only the financially-literate and confident will gain.”
Tom Ironside, British Retail Consortium Director of Business & Regulation, said: "The BRC supports both the new consumer rights that derive from the European Union Consumer Rights Directive and the proposals from the UK Government, to clarify consumer and business rights and obligations on aspects of the UK Sale of Goods Law and misleading and aggressive practices.”
Business will also benefit from the new Consumer Rights Directive regulations which will make it clearer that goods bought at a distance (e.g. online) must be returned to the trader before the consumer can get a refund. Traders will also be able to deduct money from refunds where there is evidence that a returned product has been used.
The new regulations would also ban customer help lines from charging more than the basic rate of a phone call to call the trader about something they have bought.
Notes to editors
1. The draft regulations on the Consumer Rights Directive (the draft regulations are called the Consumer Contracts (Information, Cancellation and Additional Payments) Regulations (CCRs) are available at: https://www.gov.uk/government/policies/providing-better-information-and-protection-for-consumers/supporting-pages/implementing-the-consumer-rights-directive-2011-83-eu
2. The draft regulations on Misleading and aggressive practices (the draft regulations are called the Consumer Protection from Unfair Trading (Amendment) Regulations 2013) are available at: www.gov.uk/government/policies/providing-better-information-and-protection-for-consumers/supporting-pages/misleading-and-aggressive-selling
3. Examples of where the draft regulations will help consumers:
Misleading and aggressive practice:
An elderly couple who live on the 7th floor of a tower block are bullied by a door to door salesman into purchasing a £2000 mobility scooter they don’t want or need. The scooter is delivered that same day. The couple do not use the scooter and complain to the company a month later. The company refuses to give them a full refund but Citizens Advice advise them that they can take action in the civil court. The court awards them a full refund and they are also awarded additional compensation for the distress they have suffered.
Purchasing something online:
You buy a dress from an online retailer and you don’t like the look of the fabric once you have seen it in person. You will now have 14 days after you receive it to change your mind and return the dress for a refund. Previously it was only seven days.
You buy a washing machine online. When you get to the payment page, the trader offers a 5 year warranty for £110. The box is already ticked. If you do not want the warranty, and miss or forget to untick the box, you are not liable for the £110, which should be refunded to you.
4. The Citizens Advice consumer service dealt with over 77,000 complaints about misleading claims and high pressure selling between April 2012 and March 2013.
5. Court fees costs from £35 for claims up to £300 and £95 for claims up to £3,000.
6. Consumers will be able to find out more information on the proposals and wider reforms on: https://www.gov.uk/government/policies/providing-better-information-and-protection-for-consumers
7. Comments can be submitted by 11 October via letter or preferably via e-mail to: email@example.com OR Consumer Bill Team, Consumer and Competition Policy Department of Business, Innovation and Skills, 1 Victoria Street, London, SW1H 0ET
8. Definition: a misleading commercial practice is one which contains false information, or if it is likely to deceive the average consumer in its overall presentation. An aggressive commercial practice is one which significantly impairs the consumer’s freedom of choice through the use of harassment, coercion or undue influence.
9. A copy of the Consumer Focus 2009 report into unfair commercial practices can be found at: www.consumerfocus.org.uk/files/2010/12/Waiting-to-be-heard.pdf
10. According to the latest IMRG (Interactive Media in Retail Group) Capgemini eRetail Sales Index, British online shoppers spent £68 billion in 2011.
11. The drive to fundamentally reform consumer rights and make sure consumers are getting a fair deal is part of the wider consumer changes the government has been making over the past year. This includes boosting the role of the Citizens Advice Service as the one stop shop for all consumer enquiries.
12. Information about doorstep selling and top tips on what to look out for available on Advice Guide: www.adviceguide.org.uk/wales/consumer_w/consumer_different_ways_of_buying_e/consumer_buying_on_the_doorstep_e/consumer_doorstep_crime_e/doorstep_sales_-_high_pressure_selling_.htm
13. The government's economic policy objective is to achieve 'strong, sustainable and balanced growth that is more evenly shared across the country and between industries.' It set four ambitions in the ‘Plan for Growth’ (PDF 1.7MB), published at Budget 2011:
• to create the most competitive tax system in the G20
• to make the UK the best place in Europe to start, finance and grow a business
• to encourage investment and exports as a route to a more balanced economy
• to create a more educated workforce that is the most flexible in Europe.
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.
DATE: 06 August 2013