Changes to Consumer Law - How Will They Affect Me?

By: Sarah Clark (ILEX) - Updated: 10 Jun 2015 | *Discuss

 

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The Government is looking at changes to consumer law that will give consumers protection from rogue traders and credit practices designed to get people into debt, such as unsolicited credit card cheques, as part of a range of the measures announced in the Consumer White Paper in July 2009.

Formal consultations are taking place over the period 2010 to 2012, and the plans are outlined in the White Paper written by the Department for Business, Innovation and Skills (BIS), called “A Better Deal for Consumers – Delivering Real Help Now and Change for the Future.”

The plans to simplify consumer law and introduce more resources to help consumers are part of a wider plan to deal with sharp business practices. They also look ahead to ways of tackling consumer credit issues that take lessons from the current economic situation and try to help consumers make better borrowing decisions.

Protection From Online Scams

Consumer law organisations like Trading Standards may also be given powers to close down illegal websites, act against online traders who misuse personal data, and take action against the use of spyware and malware online.

The Consumer Advocate

Another proposed power that the Consumer Advocate could have when appointed in 2010 would be the power to distribute compensation to UK consumers who have been taken in by foreign companies – and deal with unfair consumer credit agreements.

Helping Consumers Avoid Unnecessary Debt

There will be more regulation of credit and store cards, which should help prevent vulnerable people running up credit and store card debts which they have no ability to repay. Unsolicited credit card cheques are likely to be banned completely, as there are seen as a way to tempt consumers who moth not know about the sky high interest rates to borrow money they really shouldn’t.

The review will also look into changing the rules on interest rate increases on existing debts; raising the amounts payable on minimum monthly repayments; putting a stop to automatic credit limit raises without a request from the account holders, and the order in which debts run up on a credit card should be paid off.

Lenders will be forced to check consumers’ creditworthiness before they let them have any money, and to properly explain financial products – including what happens if they miss payments.

Although the consumer law reforms predominantly focus on credit and online scams, there are also plans to look into the laws on misrepresentation, to make it easier for consumers to take action if they feel they have been misled, and it's likely that the current consumer legislation covering the Sale of Goods, and the Supply of Goods and Services will be simplified, so that the same rules effectively cover goods and services in the same way.

The planned Consumer Rights Directive is expected to take the place of three current pieces of consumer law - the Supply of Goods (Implied Terms) Act 1973; the Sale of Goods Act 1979; and the Supply of Goods and Services Act 1982. It will give contracts for buying goods and services equal status in law, and remove distinctions between sale, hire and hire purchase contracts, making it easier for consumers to understand the law.

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