Liz Male
Liz Male, chairman of TrustMark, explains what contractors working for homeowners need to know about new consumer protection regulations.
In what is being hailed as the biggest shake-up of consumer protection laws in a generation, consumers will now have a package of tougher rights regarding pre-contractual information requirements, cancellation of contracts and the payment of additional charges.
The Consumer Rights Directive, which is being implemented in the UK via legislation known as The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, came into force on 13 June 2014. It aims to clarify information rights and cancellation rights, and to prohibit some hidden cost practices when consumers buy certain goods and services.
These regulations replace the Distance Selling Regulations and Doorstep Selling Regulations and apply to all consumer contracts entered into on or after 13 June made on-premises (through retail stores), made at a distance (including online sales) and off-premises (eg in-home sales), unless the customer has chosen to sign away their rights at the start. The regulations are separate from those in the Consumer Rights Bill which is currently going through parliament.
What does this mean for building firms?
All firms, big and small, will now need to review their processes, change their paperwork and terms and conditions to ensure they are compliant with the new law. Failure to comply may result in prosecution or a fine and depending on the type of breach, the contract with the homeowner may also be invalid.
The regulations will put considerable new responsibilities on traders in relation to just about everything in the business that relates to their working relationship with domestic customers, so it is vital that all building firms and tradespeople are aware of these new laws and their potential impact on future jobs.
There are, however, some consumer contracts which are excluded from these new rules – one exception being that the regulations will not apply to contracts for the construction of new or substantially new buildings. But contracts for building work which alters rather than recreates an existing property will apply, such as extensions and conservatories or for repair and maintenance works. Builders who are involved with this type of work will need to amend their standard contract to ensure they are compliant.
Key changes
There are a number of key changes which are of particular concern to building firms. These include the following:
- Pre-Contract information. Consumers must now be given much more information before they sign a contract, about the trader, the goods, the price, any other applicable charges, the terms of the contract, and their cancellation rights in a clear and comprehensive manner.
- Traders will need the active consent of the consumer for all payments – pre-ticked boxes for additional payments, for instance, will no longer be permitted.
- Consumers will not be liable for costs which they have not been told about in advance.
- The cooling-off period for goods and services sold by distance or by off-premises selling will be harmonised across the EU to 14 days from date of delivery of the products, as opposed to the previous seven days from date of contract.
- Where a consumer has a right to cancel a contract, the trader is required to provide the customer with a model cancellation form.
- The cancellation period is extended to, broadly, 12 months if the trader fails to provide certain pre-contract information. The trader could also be liable to a fine of up to £5,000.
- There are some exemptions as regards cancellation rights, one of which is for products “made to the consumer’s specification” and another is for urgent repairs and maintenance when a consumer invites a trader to their home.
The role of TrustMark
As a government-endorsed quality scheme for expert tradesmen, it is our responsibility to try to help our registered tradespeople comply with these significant changes that now apply to home improvement and repair contracts.
These new Consumer Contracts Regulations will really help to clarify contracts for homeowners and tradespeople, so they should be viewed positively. It’s a big step forward to helping both sides enjoy a positive and transparent working relationship on all home repair, maintenance and improvement jobs.
Our approved scheme operators are already busy providing support to their registered firms to ensure they are getting the detailed guidance they need to be fully compliant.
“With these new laws, traders are required to give much more detailed information before and after making a sale, which can only be a good thing for consumers so they can ensure there are no hidden costs,” says Brian Berry, chief executive of the Federation of Master Builders (FMB).
“The purpose of this requirement is to make sure that, should a dispute arise at some point after the contract has been concluded, both parties have a record about what was agreed.
“But the burden of proof that the relevant information has been provided rests with the tradesperson. That’s why we are helping registered firms understand the new requirements and make appropriate changes to avoid the risk of committing a criminal offence and resulting in non-payment from a customer. We anticipate that in many cases our registered firms are already compliant with the consumer-friendly aspects of the regulations, but we encourage all firms to review their terms and conditions to make sure they are in line with the fine detail of these new changes.”
It is clear that the new Consumer Contracts regulations will give people greater protection against rogue traders, strengthen their rights and allow more power to challenge bad practice. As for the traders, these changes will have an impact on certain forms of building contracts and action should be taken to comply. Building firms should remain aware of these changes and bear them in mind when reviewing their standard contracts and when entering into new agreements with their customers.
For further information and to stay up-to-date with developments at TrustMark, visit www.trustmark.org.uk
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