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Consumer Rights Act 2015: what all UK SMEs need to know

Consumer law changed on 1 October 2015, as the Consumer Rights Act came into force. How will these changes affect UK SMEs?

Rights Act

As the Government explains, the main changes cover:

  • faulty goods
  • unfair terms in a contract
  • non-competitive behaviour
  • inspections by public enforcers, such as Trading Standards
  • enforcement of breaches of consumer law, such as seeking redress for consumers who have suffered harm

As well as these changes there are two new areas of law covering:

  • redress if digital content is faulty
  • how services should match up to what has been agreed, and what should happen when they do not or when they are not provided “with reasonable care and skill”

UK consumer – business impact

Most media coverage has focused on the new purchase rights, which guarantee the right to:

  • to get what is paid for
  • reject faulty goods within 30 days of purchase
  • have faults put right free of charge, or to be provided with a replacement
  • a price reduction or to reject goods if problems are not addressed after six months

While these changes will impact retailers and benefit the majority of SMEs that lack a dedicated procurement department, the more import effects may come from elsewhere.

The reasonable care and skill requirement will matter to a range of UK SMEs that might not previously have considered the Consumer Rights Act, such as hairdressers or mechanics. For these types of services, refunds can now be claimed.

For more serious breaches, US-style class action lawsuits will now be easier to bring, potentially exposing SMEs to both substantial legal costs and increased pay outs if found at fault.

Other sectors will be specifically affected by the new rules: all letting agents in England are required to publicise a full tariff of their fees and there are now additional requirements on those selling tickets via secondary ticketing channels.

Business insurance

All businesses dealing with customers will need to get a clear understanding of the law. There are a range of business insurance covers that could help address at least some of the issues raised by the Consumer Rights Act 2015.

More information and guidance on the Consumer Rights Act 2015 can be found on the Business Companion website


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