Doing business with consumers

Special rules for consumer protection

A consumer is someone who purchases goods or services for personal use rather than on behalf of a business.

Consumers are generally afforded significantly more legal protection than businesses and, as such, there’s far less room for businesses to 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. For example, products should be advertised accurately and clearly to ensure the effectiveness of contracts. Using complicated or onerous contractual terms or attempting to exclude or limit liability should be avoided. 

The Consumer Rights Act 2015 (CRA) 

The Consumer Rights Act 2015 came into force on 1 October 2015 and only applies to items and services purchased after 1 October 2015. The Act includes new protections to reflect changes in the way consumers shop and makes the law easier to understand for both consumers and retailers. The CRA also makes it easier for any problems to be resolved. Retailers must ensure their standard terms and conditions (ie the provisions they use to govern the sale of goods or services to a customer) and sales practices comply with the law to ensure their contract terms are enforceable.

The CRA and the supply of goods

The CRA builds on and replaces some of the provisions contained in the Sale of Goods Act 1979 (SGA). This legislation implies terms into businesses’ contracts with consumers. This means that certain consumer rights are assumed to be contained in the contract formed when the consumer purchases something from the business, even if these rights are not actually written into the contract. Some of the consumer rights provided for in this way include: 

• the goods must be of satisfactory quality 

• they must be fit for purpose

• goods sold based on a description must comply with the description given to the consumer before their purchase

For more information, read Consumer rights.

Therefore, it’s important to be accurate and comprehensive when describing your products, particularly if you’re selling online or if the customer hasn’t been given a chance to inspect the goods before purchasing them.

Businesses must refund consumers for any faulty goods that a customer wishes to reject (ie return) within 30 days of purchase, and the money must be returned to them within 14 days. Beyond this refundable time period, the business must usually replace or repair any faulty goods. 

The CRA and the supply of services

The CRA also implies terms into consumer contracts related to services. An important implied term is that 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 commercially available services, 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. 

Unfair terms in consumer contracts

Businesses must ensure that their T&Cs are fair to consumers, particularly where the terms have not been negotiated with each particular consumer and a standard contract has been applied. Otherwise, businesses may find their contractual terms unenforceable. Terms should be transparent, prominent and easy to understand. 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.

Businesses are limited in when they can use contractual terms to limit or exclude liability (ie when they can make terms that reduce or remove the potential for consumers to claim compensation from them in the event of products being faulty). Usually, businesses cannot exclude liability when doing so may infringe on consumers’ statutory rights (eg the rights contained in the CRA) or when the exclusion of liability is generally unfair to the consumer.  

Making distance contracts with consumers

‘Distance contracts’ are contracts for the sale of  goods or services which are sold from a distance (eg online). The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) give consumers cancellation rights which allow them to cancel most distance purchases within a 14-day cancellation (or 'cooling-off') period. The 14-day period usually runs from the receipt of goods or, for services, from the date of entering into a contract. This 14-day period is expected to be extended to subscription contracts (ie contracts that automatically renew and charge the customer) in 2026. 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. For instance, goods should be delivered within 30 days in the absence of a pre-agreed time frame. The consumer can reject (ie return) goods under the CRA 2015, as outlined above. If this occurs, the basic delivery costs also have to be refunded.

The CCRs also give consumers the right to be provided with certain information before entering into many consumer contracts. This right applies to both off-premises and on-premises sales. For example, information must be provided about the characteristics of the goods or services being purchased, the price, the compatibility of digital content with other software and hardware, and any associated delivery costs.

Consumer rights and misleading or unfair sales tactics

The Consumer Protection from Unfair Trading Regulations 2008 impose restrictions on businesses related to misleading actions or omissions (eg when describing a product), misrepresentation, and aggressive sales tactics used during trade with consumers. The Misrepresentation Act 1967 also grants consumers rights to leave contracts that they entered into based on a misrepresentation (eg a false statement). These consumer rights are particularly relevant to firms who advertise their own or others’ products. 

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. 

It’s also important to be aware of which practices should be avoided if you want to create enforceable contracts with consumers which are followed through. If you have signed up to a code of conduct (ie a set of standards that businesses in, for example, a certain industry commit to voluntarily), you could be in breach of your legal obligations if you fail to follow the code. There are also many specific practices that are banned, including falsely claiming that offers are limited and bait advertising (eg where products are advertised attractively but the likelihood of the sale following through as specified is low ). A ban on drip pricing (ie where products or services advertised with a price that omits unavoidable fees which are later added, for example, at checkout) and authorising strategic fake reviews is coming into force on 6 April 2025.

Legal remedies are available for consumers when goods or services have been misrepresented or the consumer has otherwise been misled or unfairly coerced during the sales process. Cancellation of the sales contract and even the award of damages (ie financial compensation) following litigation are some of the possible consequences.

The Data Protection Act 2018

Most businesses dealing with consumers will need to process (eg store) 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, such as information about mental health). 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). 

Personal data must be processed in accordance with the data protection principles. This means that 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 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.

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

What happens if a business breaches consumer law?

Currently, the Competition and Markets Authority (CMA) does have limited powers of investigation and enforcement against traders (ie people acting for the purposes of their business, trade, profession, or craft) who use unfair commercial practices and breach consumer protection laws. These powers are designed to stop and deter businesses breaching market and consumer protection laws, and currently include:

• requiring businesses to provide certain information to them for investigations

• requesting injunctions against businesses from court

• issuing penalty fines for breach of consumer or competition law

• having businesses make commitments to address consumer protection issues within their organisations (ie undertakings)

• providing legally binding rulings on competition law and consumer protection, and

• some criminal powers to prosecute traders who use excessively unfair practices

However, these powers are often restricted as they are required to seek permission from the court to gain authority to exercise these enforcement powers.

On 6 April 2025, the Digital Markets, Competition and Consumer Act 2024 granted the CMA additional powers to investigate businesses that are suspected of breaching consumer protection laws. For non-compliant businesses, the CMA will no longer need to seek permission from the court and will likely be able to: 

• impose higher fines of up to certain limits, for example: 

  • the higher of £300,000 or 10% of the business’s global annual turnover for businesses in serious breach of consumer protection law

  • the higher of £150,000 or 5% of the business’s global annual turnover for businesses that are, for example, in breach of any promises made to the CMA

  • £300,000 for individuals 

• impose additional daily penalties for non-compliance

• require the business to compensate the consumer or allow them to end their contract early

• impose compliance obligations to ensure the business remains compliant with consumer protection laws in the future