Consumer Protection Flashcards
Why do consumers need protection?
Many businesses are managed in an ethical fashion, providing excellent goods and services to meet customer expectations.
However, the drive to maximise profit overwhelms some organisations resorting them to dubious tactics in order to increase sales and revenue.
Poor quality goods, substandard services, misleading information and pressurised selling tactics are amongst the unethical practices
Consumer Rights Act 2015
The consumer rights act 2015 is the major piece of law covering the purchase of goods, services and digital content.
It states that all goods must be of satisfactory quality, fit for purpose and must correspond with any description given.
If a consumer buys a product that isn’t satisfactory or doesn’t match description, they are entitled to return the goods and ask for a refund.
It also stated that services must be carried out for a reasonable price, within reasonable time, and with reasonable care and skill.
Consumer Protection from Unfair Trading Regulations 2008
This legislation makes it a criminal offence for a businesses to engage in unfair business practices
This means that businesses can be prosecuted and fined for engaging in these practices, such as making untrue statements, using aggressive sales techniques.
Consumer Credit Acts 1974 and 2006
These laws control the way that businesses lending money operate. These laws require the creditor (lender) to give certain key information to the debtor (borrower) before the contract is made.
This includes interest rates, how much the repayments will be and the cancellation rights of the debtor. Credit companies have to publish a figure knowns as APR.
This APR enables consumers to compare credit deals. The law also give the debtor a ‘cooling down period’ after signing a credit contract during which they can change their mind (normally 14 days)
All organisations involved in credit must obtain a licence form the appropriate government authority - it is a criminal offence to operate without one.
The consumer contracts (Information, Cancellation and Additional charges) regulations 2013
These help protect consumers who buy over the phone or online. These are distance sales, which mean that there was no face to face contact at the time of purchase.
If a businesses breaks these regulations then the consumer is not bound by the purchase contract. The regulations provide the consumer with a cancellation period of 14 which consumers are entitled to change their mind and cancel the contact and revive a refund.
The role of Ombudsman
Ombudsman services are available for various industries and offer complaints procedures for dissatisfied customers.
Ombudsman services are set up by the government and are free for consumers to use. Consumers can usually complain once they have tried to resolve any dispute with the relevant business.
The ombudsman are the last port of call before full legal action in court is taken. The ombudsman will look at all written information provided by the consumer and the business and make a decision accordingly. The decision is final and can only be overturned by a court.
Trading Standards Department
All local authorities have a Trading Standards department. The department is responsible for checking that local businesses are complying with the various trading laws.
Trading standards officers visit business and carry out spot checks. They investigate whether goods are correctly described, priced clearly and sold in the correct quantities.
They will also ensure no counterfeit goods are being sold. Trading standard officers can prosecute business if necessary and this can result in fines and in extreme cases imprisonment.
The Competition and Markets Authority (CMA)
The CMA was set up by the government in 2014, it’s mission statement is to make markets work well for consumers.
In order to pursue this aim, the CMA carries out investigations to ensure that the businesses are not engaging in anticompetitive business practices that restrict competition.
These practices would include price agreements where businesses agree not to compete on price, or boycott activities where suppliers refuse to supply to retailers if they stock the goods of a competitor.
The CMA also investigates proposed mergers if the merger would result in a company with such a large market share that it may restrict competition.
