The document summarizes new consumer rights under the Consumer Rights Act 2015. It outlines three key rights for consumers: (1) the right to unwind a contract if a business engaged in a prohibited practice like misleading actions or aggressive practices that influenced the consumer's decision; (2) the right to a discount on payments if unwinding is not possible; and (3) the right to claim damages for financial losses caused by prohibited practices. It provides examples of misleading actions and aggressive practices and notes available defenses for businesses against damage claims. Consumers can bring civil claims to enforce these new rights.

1. What? Yet more rights for
consumers?
Friday, 23 January 2015

2. Weightsand
MeasuresAct
The 2008 Regulations binned much well known consumer law

3. Average consumer

4. Transactional Decision

5. 31 Banned Practices
Sorry, none left at
£100 but we do have
this one for only £500!

6. Misleading Actions

7. Misleading Omission
FOR
SALE
One
previous
owner

8. Aggressive Commercial Practice

9. Professional Diligence
Now brace yourself
Rodney!

10. Criminal Conviction

11. Restraining Order

12. THE RIGHT TO MAKE A CLAIM
Jennifer Sewell

13. Consumer’s right to claim
Only relates to payments or contracts made after 1 October 2014
A consumer has a right to claim if three conditions are satisfied

14. Condition 1
• The contract must be one of the following;
– Consumer buying a service or product (which includes goods)
from a business
– Consumer selling goods to a business (part exchange scenario)
– Consumer making a payment to a business for the supply of a
service

15. Condition 2
• The business engaged in a prohibited practice in
relation to the product
• In relation to “goods” or digital content the business is
aware that it engaged in a prohibited practice or could
reasonably be expected to be aware of it

16. Condition 3
• The prohibited practice is a significant factor in the
consumer’s decision to enter into the contract or make
the payment

17. Condition 2 - Prohibited practice
1. Misleading actions
2. Aggressive practices
These can occur before during or after a transaction
with a consumer to give a consumer grounds to make
a claim

18. Misleading actions
1. Advertising in such a way that causes confusion
between the product being advertised and the product
of a competitor
2. A failure to comply with a Code of Conduct which the
business has undertaken to comply with and has
indicated on its advertising that it complies with it

19. Misleading Actions
3. A commercial practice which
i. Contains false information and is therefore untruthful; or,
ii. Its overall presentation deceives or is likely to deceive the
“average consumer” even if the information provided is
factually correct

20. Misleading Actions
iii. The false information or deception relates to;
– the existence or nature of the product;
– the main characteristics of the product;
– the extent of the trader's commitments;
– the motives for the commercial practice;
– the nature of the sales process;
– any statement or symbol relating to direct or indirect sponsorship or
approval of the trader or the product;
– the price or the manner in which the price is calculated;
– the existence of a specific price advantage;
– the need for a service, part, replacement or repair;
– the nature, attributes and rights of the trader;
– the consumer's rights or the risks he may face

21. Misleading Actions
The action must cause or be likely to cause the “average
consumer” to take a “transactional decision” he would
not have taken otherwise

22. Aggressive Practices
The use of harassment,
coercion or undue
influence to significantly
impair or be likely to
significantly impair the
average consumer’s
freedom of choice or
conduct in relation to a
product.

23. Aggressive Practices
• Factors that will be considered in determining whether a
practice is aggressive include;
a) its timing, location, nature or persistence;
b) the use of threatening or abusive language or behaviour;
c) the exploitation by the trader of any specific misfortune or
circumstance of such gravity as to impair the consumer's
judgment, of which the trader is aware, to influence the
consumer's decision with regard to the product;
d) any onerous or disproportionate non-contractual barrier
imposed by the trader where a consumer wishes to exercise
rights under the contract, including rights to terminate a
contract or to switch to another product or another trader; and
e) any threat to take any action which cannot legally be taken

24. A few examples…

25. A few examples…
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27. REMEDIES
Rebecca Latus

28. Remedies
• There must be:-
– A contract
– A prohibited practice - a misleading action or an aggressive
practice
– The prohibited practice must be a significant factor in the
consumer’s decision to proceed

29. Remedies
• Three possible remedies
– Unwinding the contract
– Discount
– Damages

30. Business to Consumer Contract - right
to unwind the contract
• Available when
– The consumer states to the trader that they reject the product
– Within the relevant period
– At a time when the product is capable of being rejected

31. The relevant period
• 90 days starting from the later of either
– The day the consumer enters the contact; or
– The relevant day

32. Capable of being rejected
• A product may only be rejected if
– In the case of goods, these have not been fully consumed
– In the case of a service, this has not been fully performed
– In the case of digital content, this has not been fully consumed
– In the case of a lease, this has not expired
– In the case of a right, this has not been fully exercised

33. An example

34. Effect of unwinding a Business to
Consumer Contract
• The contract ends, releasing both parties from their
obligations
• The trader must give the consumer a refund
• If the contract is for the sale or supply of goods, the
consumer must make them available for collection by the
trader

35. Business to Consumer Contract - right
to a discount
• A discount may be claimed if
– The consumer has made one or more payments for the product
or at least one payment is still outstanding; and
– The consumer has not sought to unwind the contract
• A consumer may want to claim a discount where
– It is not possible to unwind the contract; or
– The consumer wants the contract to continue with the rest of the
terms unaffected

36. Consumer to Business Contract - right
to unwind
The same right to unwind applies in Consumer to
Business Contracts
• The consumer may
– Treat the contract as at an end
– Have their goods back, where the trader is able to return the
goods in the same condition as sold, in which case the
consumer must repay the trader what was paid for the goods; or
– If the goods cannot be returned in the same condition, be paid
the amount, if any, that the market price of the goods exceeds
the price the trader actually paid

37. Right to damages
• The consumer must have suffered
– A financial loss; or
– Alarm, distress or physical inconvenience or discomfort
… that would not have happened if the prohibited
practice had not taken place

38. What will the damages cover?
• These will compensate the consumer for
– Reasonably foreseeable losses
– Consequential losses only (i.e. there is no compensatory
element)

39. Defences for traders
These will only apply where the remedy claimed is
damages, not where the remedy is unwinding or a
discount
• The trader can avoid paying damages if he can prove
that
– The prohibited practice happened due to
• a mistake
• reliance on information supplied to the trader by another person
• the act or default of a person other than the trader
• an accident, or
• another cause beyond the trader’s control, and
– He took all reasonable precautions and exercised all due
diligence to avoid it happening

40. How are the rights enforced?
• Consumers may bring civil claims
• Other claims such as breach of contract and mistake are
not affected, but no double compensation

42. George Coyle Rebecca Latus Jennifer Sewell
Partner
george.coylerollits.com
01482 337351
Associate
rebecca.latus@rollits.com
01482 337356
Associate
jennifer.sewell@rollits.com
01482 337368