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The Consumer Rights Act New Requirements & Remedies for Services

New requirements and remedies should increase certainty and happiness for all

New requirements and remedies should increase certainty and happiness for all

The main provisions of the Consumer Rights Act 2015 are now in force and a large number of our document templates have been reviewed and updated to help you in getting along with the new Act.  As well as bringing many different pieces of legislation together, the Act has also brought with it some new requirements for traders to comply with and remedies to help protect consumers when things don’t work out.  In this post we’ll be taking a look at the rules covering the provision of services.

Legal Requirements for Services

When it comes to the requirements set out in the law, it should come as no surprise (or if it does – as a pleasant one) that your legal obligations do little more than echo good business sense.

What is important here from the legal point of view is the actual performance of the service, not the end result (but let’s face it – you want to keep your customers happy so the end result should be quite important to you!).  As for what “reasonable skill and care” is, that will take account of various factors, including prevailing standards in your particular industry or sector, and the price paid for your services.

CRA Services Requirements Infographic 1 Blog Sized

What about the reasonable price and time requirements? For the most part, you won’t find these mentioned in our templates because these rules apply only if the relevant information has not already been given to the customer, or is not already included in the contract (or the customer has not paid a price).  The bottom line: you should always ensure that your customer knows what’s going on.  By making sure that any and all information given to the customer at all stages (both before and after any contract has been made) is detailed and clear – especially on these points – it will be what you have agreed between you and not what the law implies when it comes to price and time for performance that matters.  Again, your goal should be a happy customer and keeping people in the dark doesn’t usually lead to that outcome – so this should be an easy requirement to meet and you have most likely been meeting it since day one!

New Rules on Information

As under the recent Consumer Contracts Regulations, any information you provide to your customers about yourself or your services can be taken as a contractual term.  In addition, the Consumer Rights Act bestows similar status on information provided voluntarily where that information is taken into account by the customer when deciding whether or not to enter into a contract, or where it is taken into account when the customer makes a decision about the service after entering into the contract.

It is important to note that this does not tie you to everything you say – any qualifying statements made at the same time will be taken into account when determining whether or not something you have said or written to the customer should be treated as contractually binding.  Nevertheless, when considering statements made in advertising and other forms of marketing, this is an important point to be aware of.

Returning briefly to the Consumer Contracts Regulations and, more specifically, the pre-contract information requirements that they set out, any such information will also be treated as a contract term.

So what if things change? The key point to the rules governing the binding nature of information given by traders to consumers appears to be the prevention of unilateral changes or – to put it in blunter terms – getting the customer’s business by promising one thing, but actually giving them another.  The information can be changed, provided both the trader and the customer expressly agree to it.  Once more, then, although these are legal requirements and breaching them could have serious ramifications, if you are running an honest business and not trying to mislead your customers, compliance should be a virtual given.

What Could Possibly Go Wrong?

 If something goes wrong and it turns out that you have not complied with your obligations in some way, the Consumer Rights Act has introduced new remedies for consumers purchasing services.

Services Remedies - Consumer Rights Act 2015

If the service is not performed with reasonable skill and care, the customer will have the right to repeat performance.  If that isn’t possible, or isn’t done within a reasonable time or without inconvenience to the customer, they will have the right to a reduction in price (up to the full price for the service).

If the service isn’t performed within a reasonable time (though remember what we said above about specifying such information in the contract), the customer may have the right to a price reduction.

What about the all-important information? If the service isn’t performed in accordance with information you have provided about it, the same remedies of repeat performance and price reduction will again apply.  If, on the other hand, the problem relates to information you’ve provided about yourself (as opposed to the service), the only remedy on offer from the Consumer Rights Act is a price reduction.

Repeat Performance

The goal of this remedy is to put things right, leaving the customer in the position he or she would have been in had the service been performed correctly in the first place.  The “repeat” part, then, doesn’t necessarily refer to the whole kit and caboodle – you must only perform the service again to the extent required to ensure compliance with the contract.

This must be done within a reasonable time and without causing your customer significant inconvenience.  What’s more, you must not charge the customer for repeat performance – the cost is yours to bear and yours alone.

Remember, if the repeat performance can’t be carried out within a reasonable time, without significant inconvenience to the customer, or if it is simply not possible, the customer should be given a price reduction.

Price Reduction

 In cases where your customer may be entitled to a price reduction, this can be any amount up to and including the full price.  The Consumer Rights Act refers to the price reduction being of “an appropriate amount” – this essentially refers to the difference in value between the service the customer should have received and the value of that which they have actually received.  Remember also that the customer may be entitled to a price reduction if you have provided incorrect information about something else, for example, your business.

Where the customer has already paid something, they may be entitled to a refund as a result of the price reduction.  Under the Consumer Rights Act, refunds must be given “without undue delay” and in any case, within 14 calendar days starting on the day that you agree your customer is entitled to the refund.  Unless the customer expressly agrees otherwise, you must use the same payment method originally used by the customer when they paid in the first place – so no refunding them with useless vouchers when they paid by debit card!  Finally, you may not impose any fee on the customer for issuing the refund.  But you weren’t going to do that anyway, were you?

Onward!

 It is, without a doubt, important to be aware of your obligations under the Consumer Rights Act, and the remedies open to consumers should you fail to comply with those obligations in some way.  With that said, nothing here should come as a particular surprise and, as we have noted more than once, if your goal in business is to keep your customers happy and informed, complying with these rules should be a cinch.

Join us in our next blog post for details on the new digital content provisions of the Consumer Rights Act and in the meantime, feel free to drop us a line with any comments you might have on your life as a service provider under this shiny new legislation!

By Iain Mackintosh

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