Draft Consumer Rights Bill - Business, Innovation and Skills Committee Contents

6  Educating consumers and businesses

302. In April 2012, the Government announced, following consultation, that from April 2013, Citizens Advice and Citizens Advice Scotland would be responsible for consumer-facing education and consumer advocacy, and that the Trading Standards Institute would be responsible for most business-facing education activities.[473] The Competition and Markets Authority (CMA) may issue specific guidance for businesses in the sector concerned, or in relation to the application of unfair contract terms legislation where the CMA has primary enforcement responsibility.[474]

303. Submissions to this inquiry from all groups of stakeholders argued that an effective and timely education campaign on the draft Bill and the wider reforms to UK consumer law was a necessity.[475] Regarding funding for such a campaign, the Minister said:

In terms of budget, we are at the draft Bill stage at the moment and hoping to bring the Bill in, so we are not talking about increasing budgets in this particular financial year, but I do hope that we will be able to look at whether or not, even with difficult resources, Government is able to commit to funding some education initiatives.[476]

304. TSI said:

We feel a project following the enactment of the Bill requires much greater investment to enable the approximately one million consumer-facing businesses to fully understand their new obligations. While we appreciate some of these businesses will turn to the private training market to fulfil the knowledge gap amongst staff, we risk leaving micro and small businesses behind who are unlikely to recognise the change in their obligations and perhaps even less likely to use paid-for sources of training and information.[477]

305. Citizens Advice, who received 245,000 enquiries on consumer issues and received a further 700,000 calls to its Consumer Service telephone helpline in 2012/13, said:

One of the key objectives of the Bill is for consumer law to be easy to use. In

order for this to become a reality consumers and traders need to be aware of, and

understand, what the new law means for them.[478]

306. Citizens Advice argued for changes to the requirements around the provision of point of sale information, specifically, for appropriate point of sale information. A 2012 Citizens Advice survey[479] asked consumers how their consumer problems could be resolved more easily in the future. 43% of respondents survey said that information about their rights on receipts, at the till and on web sites would help them to resolve problems with a trader.[480] This is supported by the findings of a 2009 report of the Law Commissions, commissioned by the then Department for Business, Enterprise and Regulatory Reform:[481]

We recommend that there should be a summary of consumer legal rights for faulty goods available at point of sale or in another similarly prominent position in shops.[482]

307. Furthermore, Citizens Advice argued that the Consumer Rights Directive provides that businesses must supply to consumers a "reminder of the existence of a legal guarantee of conformity".[483] Citizens Advice argued that, while the detail of the requirement was uncertain, this could require point of sale information about consumers' legal rights. They said:

The Department for Business Innovation and Skills have said that they believe that this requirement is merely for a statement such as "You have a statutory guarantee that the goods will be provided to you in accordance with the contract". In our opinion this in not helpful. It does not really say anything except that a trader cannot break the contract and certainly does not inform the consumer as to their rights under that contract. This Bill provides a real opportunity to provide consumers with the information that they really need, rather than something which does not tell them anything.[484]

308. Citizens Advice argued that a requirement for point of sale information outlining the core rights for goods and digital content (to include the statutory rights relating to satisfactory quality, fitness for purpose and for goods and digital content to be as described) should be included at clause 10 of the draft Bill, which sets out the statutory right that goods will match the description.[485] On the topic of consumer education, the Minister said:

It is important that businesses are really clear about what their responsibilities are, making it easy for them to train their staff[...]It is also important to make sure that some materials are produced. As to whether that is point-of-sale stuff, I am very happy to look at that. Personally, I like the idea of being able to produce something the size of a credit card with five key bullet points on it, which people could stick in their purse so that they could check when they are out shopping.[486]

309. We conclude that lack of information about and understanding of consumer rights is a key cause of disputes and consumer detriment. In respect of improving consumer awareness and understanding of their legal rights and obligations, we agree with Citizens Advice that there is little point in requiring businesses to provide consumers with a reminder of the existence of a legal guarantee of conformity.

310. We recommend that the Government, in conjunction with Citizens Advice, the Trading Standards Institute and the Competition and Markets Authority, must set out a clear and detailed education strategy for both businesses and consumers in relation to the draft Bill and its wider reforms to consumer law in the UK.

311. We support the recommendation of Citizens Advice for inclusion of an express requirement, in clauses 10 and 38 (Goods and Digital Content to be as described) and clause 52 of the draft Bill (Information about the trader or service to be binding), for a trader to provide information about the relevant core statutory rights at the point of sale.

473   Department for Business, Innovation and Skills, Empowering and protecting consumers: government response to the consultation on institutional reform, page 7 Back

474   Ibid., page 7 Back

475   For example, Ev w17, Ev 59, Ev 78, Ev 83, Ev 62 Back

476   Q174 Back

477   Ev 78 Back

478   Ev 62 Back

479   http://www.citizensadvice.org.uk/redressing_the_balance Back

480   Ibid., p10 Back

481   Now DBIS Back

482   The Law Commissions, Consumer Remedies for Faulty Goods,2009, paragraph 7.28 Back

483   Ev 63 Back

484   Ibid.  Back

485   Ibid. Back

486   Q174 Back

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Prepared 23 December 2013