New EU rules on refunds could ‘affect’ consumer confidence
The rules that allow consumers to get their money back on faulty goods could be at risk because of proposed European changes, it has been claimed, and any change may harm consumer confidence.
The Law Commission, the body that monitors the legal system, has said that planned European reforms could mean that consumers will only be able to insist on a repair to or a replacement of faulty items rather than demanding a refund.
Under the current regulations, an item should be as it is described in the shop or website and should be of satisfactory quality. If it is faulty, or has been wrongly described, the consumer can ask for a refund, a replacement or a repair.
To get a refund, a consumer must make their complaint within a reasonable time, which usually means returning the item inside a month.
In the case of repairs and replacements, there are two six-month rules. To turn down a request for a repair or replacement in the first six months after a purchase, the retailer needs to prove the item was satisfactory when it was bought.
For the next six months, it is up to the consumer to prove there was something wrong with the item at the time of its purchase if they are to be entitled to a replacement or repair.
Scrapping the right to a refund could undermine consumer confidence, the Law Commission report argued.
It said: “We recommend that the right to reject should be kept as a short-term remedy of first instance. It is a simple remedy which inspires consumer confidence.
“Consumers know that they can get their money back if the product is not as promised, provided they act quickly. This makes them more prepared to try unknown brands and new retailers.”
However, the Law Commission report, while rejecting the planned European reforms, did support a clarification of the rules on refunds.
In place of the present “reasonable time”, the report recommended a more defined period of 30 days, although with a degree of flexibility to allow for perishable goods, where the timeframe would be shorter, and major items, perhaps bought a month or two in advance as gifts.
The mooted European rules may also affect the way small faults or imperfections are dealt with, reducing the consumer’s rights from a refund to a discount only.
The Law Commission said that dropping the right to a refund could entail long and unnecessary wrangles between customers and businesses.
The report added: “Consumers often care a great deal about the appearance of new consumer goods. What is minor to the retailer may not be minor to the consumer. A risk is that traders might argue that any fault is minor, so that refunds will no longer be offered in practice.”
The Department of Business accepted the main thrust of the Law Commission’s findings.
A department spokesman responded: “We agree with the recommendation that the right to reject faulty goods must be retained in UK law. It is a cornerstone of the UK consumer protection regime and highly valued by the public.
“We are continuing to work on securing an amendment to the proposed directive which will retain the right to reject for UK consumers. We are optimistic that we will be able to achieve a satisfactory solution.”