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Retailers prepare for new consumer rights for misleading or aggressive sales practices

Retailers are reviewing their sales practices and procedures and retraining staff in advance of new rules in October. The Consumer Protection (Amendment) Regulations 2014 will give consumers who are victims of misleading or aggressive sales practices the right to unwind sales contracts and claim refunds, discounts and compensation far more easily than before.

Under existing rules, retailers who sell products or services as a result of misleading and/or aggressive sales practices are liable to civil and criminal penalties, but have not had to compensate consumers affected. Instead, consumers must bring separate claims for misrepresentation – a complex and sometimes expensive option that few consumers have been prepared to take.

From 1 October 2014, consumers have a statutory right to unwind the contract within 90 days and claim a refund (unless the product has already been wholly or partly consumed or the service has been performed), or claim a discount. For a refund, consumers must clearly reject the product bought and any refund is calculated to that point.

If the consumer claims a discount this is calculated by reference to the seriousness of the retailer’s practices, starting with a 25 per cent discount for minor practices, rising to a 100 per cent discount for serious practices.

Consumers can also claim compensation for additional financial loss, alarm, distress, physical inconvenience or discomfort arising from the retailer’s practice.

If consumers are not satisfied with their statutory rights – for example, with the level of discount proposed – they still have the right to bring a civil action for misrepresentation.

Recommendations

Retailers should review their promotional and advertising practices and procedures to avoid the risk of claims and regulate how they should be handled if they arise. Staff training will be required, particularly among customer-facing staff.

20 October 2014

Jonathan Waters has over 12 years of experience advising businesses in relation to commercial disputes and how to avoid or resolve them. He has a particular interest in construction law and adjudication, and he is currently studying for an Msc in Construction Law & Dispute Resolution at King’s College. Before starting Helix Law, he was the partner in charge of Commercial Litigation, Employment Law and Property Litigation at Stephen Rimmer LLP. He has a degree in Business Administration and before qualifying as a solicitor he worked in industry and investment banking for over a decade.

This article is written to raise awareness of the issues it discusses and it may not be updated after it is first written, even if the law changes. It is not intended to be legal advice and cannot be relied on as such. Helix Law is not responsible or liable for any action taken or not taken as a result of  this article. If you think the matters set out affect you and you wish to apply them to your particular circumstances then we are happy to give you free initial telephone advice. 

Contact Helix Law on 01273 761 990 or email: [email protected]