Doing business with 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 number of special rules which apply to doing business with consumers, particularly when it comes to the terms and conditions (T&Cs) 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.

The Consumer Rights Act 2015 came into force on 1 October 2015 and only applies to items bought after 1 October 2015. The Act includes further protections to reflect changes in the way consumers shop, making the law easier to understand for both consumers and retailers. The Act also makes it easier for any problems to be resolved. Retailers must ensure their standard terms of business and sales practices comply with the law to ensure their contract terms are enforceable.

Any goods being sold to consumers must live up to their description, so it’s important to be accurate and comprehensive 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 satisfactory quality and fit for purpose. 

You are obliged to refund consumers for any faulty goods within 30 days and the money returned to them within 14 days. Beyond this refundable time period, you’re 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 that isn’t completed to a sufficient standard may result in the consumer being entitled to a full refund. 

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 (ie not couched in legalese). Terms that 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.

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 are exempted from the 14 day cooling-off period. 

Exempt products include: 

• CDs, DVDs or software where the seal has been broken

• perishable items

• tailor-made or personalised items

Exempted services include leisure service activities on specific dates such as car hire, wedding venues and theatre tickets for specific performances. 

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.

Misleading actions or omissions, misrepresentation in all its forms and aggressive sales tactics are all illegal under consumer law.

Although there is often scope for subjectivity in this area (eg 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 that are banned, including false limited offers and bait advertising (eg 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.

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 (ie information that comes within the 'special categories of personal data'). These businesses should be aware of the UK General Data Protection Regulations (GDPR), the Data Protection Act 2018 (DPA) and the Privacy and Electronic Communications Regulations (PECR). 

For more information read Data privacy and cookies, Data protection and Processing personal data. 

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 UK without adequate protection

Businesses that collect and process personal data must pay the Information Commissioner’s Office (ICO) a data protection fee unless they are exempt.