New rights for consumers on the courts?
Very rarely do we see news coming out of a Government department that gives us a warm and fuzzy feeling in our our consumer champion department. However, the latest consultation launched by the department for Business Innovation and Skills (BIS) could do just that, by giving more power to consumers wanting to take retailers to court, and by forcing those found lacking to offer redress to all consumers.
The new consultation on civil enforcement remedy, which closes on 31 December in case you are interested in adding your tuppence worth, plans to give authorities or enforcers (like Trading Standards) a wider range of powers to:
- make sure businesses abide by consumer law and increase good practice
- reimburse consumers for money lost
- boost consumer confidence and empower them to exercise greater choice
Some of the ideas included in the consultation are aimed at making sure retailers are better at complying with the relevant consumer law, while others deal with complaints-handling, and how consumers can find out which businesses they can trust and which they cannot.
But perhaps the most interesting and exciting* proposals deal with those cases where a consumer might look to take a retailer to court. At present when a business breaks a consumer law, the customer can go to an enforcer for help, who will take forward the complaint on their behalf, seeking a criminal prosecution or an injunction order in the civil courts which stops the conduct in question. However, the individual will not necessarily see any positive action by the business or gain any benefits for themselves as a result, although the hope would be that other, future consumers will benefit. All very altruistic, but not great for the pockets of the trailblazers.
The new proposals suggest that, where a consumer has lost a sum of money due to a business breaking consumer law, be it through overpayment or being mis-sold something, all consumers would get that money back. Businesses would also be compelled to address the cause of the consumer’s complaint, meaning they cannot simply make a superficial change to solve an individual problem.
Examples given by BIS of how these changes could work are:
- if a company was found to have overcharged all its customers for the guarantees it sold with a washing machine, that company could be asked to write to all its customers informing them of their right to a sum of money if they send back a tear-off slip within a certain time
- after a company mis-sold insurance with its coffee machines and ignored complaints, as well as fixing the individual problem it will have to make sure it changes its sales and complaints policy so that other customers don’t get the same problem
Consumer Affairs minister Jo Swinson said:
“Too often consumers are short changed as the result of criminal prosecutions under consumer law: currently a business is condemned and fined, but nothing is done to repay the money lost by the customer. Instead, customers are forced to foot the bill for costly and time consuming legal action to get their money back.
“When consumers, especially vulnerable consumers, have been wronged they should be able to have free access to justice quickly and simply. With these proposals, when a business has infringed your rights as a consumer the court will make sure they reverse the damage and give consumers their money back. This will put the balance back in the system, and give consumers more power to exercise their choices confidently.”
Which?!? Executive director Richard Lloyd said,
"These new powers should help ensure consumers are no longer left out of pocket if they have been ripped off or are the victims of mis-selling. We hope these proposals will spread better practice among businesses and help boost consumer confidence, which is vital to our economic recovery.”
* or as exciting as Governmental proposals get, anyway. Which isn’t that exciting.