By Daniel Hunter
Victims bullied or misled into buying goods and services are set to be given new rights to get their money back from rogue traders whose unfair practices cost them billions.
Draft legislation announced by Consumer Minister Jo Swinson today sets out how consumers will also have access to clearer information about any additional costs and more generous time limits for returning goods bought online.
The new proposals amending the Consumer Protection Regulations from Unfair Trading Regulations will:
- 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
Jo Swinson also announced details of how the Consumer Rights Directive will be implemented, including measures which will:
- increase the time limit for returning goods purchased online or by phone 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
- set out key information consumers should be given by traders before agreeing to purchase, like additional costs or cancellation right
In a 2009 Consumer Focus report Consumer Focus calculated that the total detriment suffered by consumers as a result of misleading and aggressive practices was around £3.3 billion a year. Earlier Consumer Focus research found that over 60% of the population had been the target of an unfair commercial practice.
In 7% of cases, the consumer suffered more than £500 worth of loss.
In 3% the consumer suffered more than £1,000 worth of loss.
Despite the high standards exhibited by the vast majority of businesses, there are traders who seek to exploit consumers. Misleading and aggressive practices are a particular problem for vulnerable and elderly consumers, for example, when they fall victim to misleading or aggressive doorstep sales techniques.
"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," Consumer Minister Jo Swinson said.
"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."
Along with the draft Consumer Rights Bill announced in June, the reforms to consumer law will enhance consumer rights and make them easier to understand and help businesses interpret and apply the law. The changes will boost the UK economy by over £4 billion over the next decade.
Citizens Advice Chief Executive, Gillian Guy said: "Citizens Advice helps with over 77,000 problems with misleading claims and pressure selling a year. A beefed-up approach to tackling misleading and aggressive practices is desperately needed and will be a step towards protecting people from bullying businesses. People are losing out as they take out services such as insurance, timeshares and home improvements only to later discover it is not what they were promised or wanted."
Martin Lewis, creator of MoneySavingExpert.com, said: "This is an important shift of emphasis from the rather arduous and resource-heavy prosecuting of rogue behaviour, towards rights for the individual. Individuals will gain more rights of redress and it’ll be easier for them to change their minds if something fails to live up to the spiel.
"In itself, this strengthens the deterrent for companies which target the vulnerable. The important part will be ensuring the system makes it relatively easy for people to enforce the rules — or only the financially-literate and confident will gain."
Tom Ironside, British Retail Consortium Director of Business & Regulation, said: "The BRC supports both the new consumer rights that derive from the European Union Consumer Rights Directive and the proposals from the UK Government, to clarify consumer and business rights and obligations on aspects of the UK Sale of Goods Law and misleading and aggressive practices."
Business will also benefit from the new Consumer Rights Directive regulations which will make it clearer that goods bought at a distance (eg online) must be returned to the trader before the consumer can get a refund. Traders will also be able to deduct money from refunds where there is evidence that a returned product has been used.
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.
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