New consumer rights to protect against aggressive and misleading salesmen
The department for Business Innovation and Skills (BIS) has published draft legislation aimed at better protecting consumers, particularly vulnerable ones. The new rules also include measures aimed at penalising companies using misleading or aggressive tactics to make that all important sale, by awarding compensation for emotional distress to affected consumers.
More details on the new Consumer Directive have also been published, which will improve rights and clean up sales practices for all consumers.
Announcing the changes, 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.”
Poor sales practices are a sizeable problem. The Citizens Advice consumer service dealt with over 77,000 complaints about misleading claims and high pressure selling between April 2012 and March 2013. Consumer Focus have previously calculated that the total detriment suffered by consumers as a result of misleading and aggressive practices was around £3.3 billion a year with over 60% of the population having been the target of an unfair commercial practice.
These latest amendments to the unfair trading regulations are specifically designed to make the rights of affected customers more robust and to hit businesses using these underhand tactics where it hurts by allowing claims for potentially unlimited compensation for hurt and distress suffered by the bullied consumer.
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
give consumers the right to claim compensation for any alarm or distress caused by these practices
For the purposes of the draft legislation, a misleading commercial practice is one which contains false information, or if it is likely to deceive the average consumer in its overall presentation and an aggressive (bullying) commercial practice is one which significantly impairs the consumer’s freedom of choice through the use of harassment, coercion or undue influence.
The Consumer Directive will:
increase the time limit for returning goods purchased online or by phone (distance selling) from 7 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, often used for adding extended warranties or insurance premiums to purchases
set out key information consumers should be given by traders before agreeing to purchase, like additional costs or cancellation rights
The new regulations would also ban customer helplines from charging more than the basic rate of a phone call to call the trader about something they have bought. Given the ridiculous rates of some non-geographic numbers, this is likely to hit certain retailers right in the profit margin.
Comments on the draft legislation can be submitted by 11 October via email [email protected] or letter to Consumer Bill Team, Consumer and Competition Policy, Department for Business, Innovation and Skills, 1 Victoria Street, London, SW1H 0ET