Doing business with consumers

Consumer rights have been beefed up considerably in the last 20 years.

Businesses selling goods or services to consumers are now subject to stringent regulations.

Make sure you are aware of your obligations.

Special rules apply to consumers

A consumer is someone who purchases goods or services for personal use, as opposed to buying something on behalf of a business.

In general, consumers are afforded significantly more legal protection than businesses and, as such, there’s far less room for manoeuvre when dealing with consumers.

There are a variety of special rules which apply to doing business with consumers, particularly when it comes to the terms and conditions contained in consumer contracts.

Businesses contracting with consumers must abide by a wide range of consumer law requirements.

Products should be advertised accurately, and clarity is vital in order to ensure the effectiveness of contracts.

Using complicated or onerous terms, or attempting to exclude or even limit liability, should be avoided.

It’s vital that small businesses operate in accordance with the following consumer laws.

Sale of Goods Act and Supply of Services Act

Any goods being sold to consumers must live up to their description, so it’s important to be as accurate and comprehensive as possible when describing your products – particularly online or if the customer hasn’t been given a chance to inspect the goods before purchasing them.

Furthermore, goods provided must be of a satisfactory quality and fit for purpose.

You are obliged to refund consumers for any faulty goods within 30 days and the money returned within 14 days.

Beyond this refundable time period, you’re still required to replace or repair any faulty goods.

Any services provided to consumers, including the delivery of goods, must be supplied with reasonable care and skill.

This applies to the whole range of services commercially available, from plumbing to cosmetic surgery.

Work which isn’t completed to a sufficient standard may result in the consumer being entitled to a full refund.

Sale of Goods and Associated Guarantees

Consumers rights are further strengthened by the Sale of Goods and Associated Guarantees Directive.

Under the regulations, products must be ‘in conformity’ with the contract.

To be in conformity, your products must meet specific conditions about quality.

The conditions are mostly the same as the Sale of Goods Act.

The consumer is entitled to certain remedies, that is, repair, replacement or refund when products do not meet the specific quality standards.

If the consumer finds a problem within 6 months of purchase, it is assumed that it was there at the time of delivery.

It is up to you, the seller, to prove otherwise.

There is a limitation of 6 years to a right to remedy.

This means that the consumer is entitled to raise a problem about a product for up to 6 years from the date of purchase.

Unfair Terms in Consumer Contracts Regulations

You must ensure that your T&Cs are fair to the consumer, particularly where the terms have not been negotiated and a standard contract has been applied.

In general, you cannot excessively exclude liability and the terms should be transparent, prominent and easy to understand (i.e. not couched in legalese).

Terms which give the trader a right to fundamentally change the goods or services to be supplied under the contract will be considered unfair, as will any clauses which entitle them to unreasonable compensation should the consumer decide to cancel the contract.

Consumer Rights Regulations

Consumer rights in relation to online purchasing can be stronger than their offline rights on some occasions.

Any goods or services which are sold to consumers online, at a distance, or away from a trader’s premises, must allow for a minimum 14 day ‘cooling off’ period during which the contract can be cancelled (either 14 days from receipt of goods or from the date of entering into a contract for services).

For digital downloads, consumers will need to waive their cancellation rights before digital content can be provided.

Certain products and services that do not qualify for the 14-day cooling off period:

• Exempted products include CDs, DVDs or software where the seal has been broken; also perishable items and tailor-made or personalised items.
• Exempted services include leisure service activities on specific dates such as car hire, wedding venues, theatre tickets for specific performances, etc. For these services, the consumer has the same cancellation rights as if they were signing the contract in person.

Goods must be delivered within at least 30 days in the absence of a pre-agreed time frame.

If the consumer cancels the contract, basic delivery costs have to be refunded.

The provision of key information is a crucial requirement for vendors and applies both to off-premises and on-premises sales.

For example, information must be provided about the goods or services being purchased, the price, the compatibility of digital content and details of any associated delivery costs.

Unfair Commercial Practices

Misleading actions or omissions, misrepresentation in all its forms and aggressive sales tactics are all illegal under the Consumer Protection Act 2007.

Although there is often scope for subjectivity in this area (e.g. artistic licence in advertising content), it’s important to keep in mind the overall purpose of consumer legislation which is to provide fairness and clarity for consumers.

If you have signed up to a code of practice, you could be in breach of your legal obligations if you fail to follow the code.

There are also 31 specific practices which are banned, including false limited offers and bait advertising (e.g. where deals are made misleadingly attractive).

Legal remedies are available for consumers when goods or services have been misrepresented or they have otherwise been misled or unfairly coerced during the sales process.

Cancellation of contract and even damages are some of the possible consequences.

Data Protection Act

Most businesses dealing with consumers will need to process personal data at some point, whether this just consists of contact details or more sensitive information (i.e. information that comes within the ‘special categories of personal data’).

These businesses should be aware of the Data Protection Act 2018 (DPA) and the Privacy and Electronic Communications Regulations.

The DPA is the main legislation implementing the General Data Protection Regulations (GDPR) in Ireland.

Any personal data must be:

• used fairly, lawfully and in a transparent manner;
• collected for specified, explicit and legitimate purposes;
• adequate, relevant and its collection is limited to what is necessary;
• accurate and kept up to date;
• kept in a form that enables identification of data subject rights for no longer than is necessary;
• handled according to the data protection rights of individuals;
• kept secure and not transferred outside of the European Economic Area (EEA) without adequate protection.

To find out more about data protection and GDPR, see the guidance on the DPC’s website

Right to redress

If the consumer has a problem with something they have bought due to a defect or fault it is always the seller who must put things right.

As a general rule the seller must offer a repair or a replacement.

Alternatively, they can give a refund.

However, the consumer may have no grounds for redress if:

• you informed them of the defect before they bought the item – for example, the goods were marked ‘shop-soiled’ or they were advised of a part that needed replacing, for example in a second-hand vehicle
• the damage was caused by their own misuse or negligence – if the fault appears within 6 months after it was received, the onus is on the consumer to prove that they did not cause the damage
• they made a mistake when buying the item – for example, buying a black dress instead of blue or entering the wrong dates for a flight
• the fault is superficial and the consumer examined the item before they bought it and should have seen the defect
• they changed their mind – the right to cancel under the Consumer Rights Regulations does not apply to goods bought in-store.