Law Society Practice Note: Consumer Contracts Regulations

The Law Society have published a practice note relating to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “Regulations”) which come into force on 13 June 2014.

As the practice note succinctly puts it:

[The Regulations] regulate most contracts made between a "trader" and a "consumer".

The regulations are likely to apply to a wide range of contracts made between solicitors (as traders) and their clients (as consumers). Whether they apply will depend on the nature of the client and the circumstances in which the contract was made.

This practice note explains when the regulations will apply to contracts between solicitors and their clients, and explains the consequences.

Commercial lawyers have doubtless been busy during the last few months, prepping and advising clients on the impact that the forthcoming Regulations will bring. However, some of those who specialise in other areas might not have spotted the fact the Regulations can apply to the solicitor–client relationship -- meaning they need to sit up and pay attention to this stuff, too.

It just goes to show: the Law Society can be useful sometimes.  

Lending and Borrowing Laws for Loans

Guest PostIf you’re considering taking out a loan, it’s important to be aware of your rights beforehand. This means becoming acquainted with the laws which govern lending and borrowing terms in the UK. Doing so will ensure that you are fully aware of the risks of taking out a loan, and will help you to understand how best to manage the financial repercussions of doing so – including what may happen if you can’t make your repayments.

Taking Out a Loan

When you take out a loan you will always be asked to sign an agreement. This agreement will set out the terms of your loan, and by signing it you will be indicating that you are both aware of and in agreement with these terms. In the UK, most lending and borrowing agreements are regulated by the Consumer Credit Act. This Act gives rights to borrowers, and dictates the terms under which lenders can provide loans. If a lending agreement is governed by the Consumer Credit Act, you will receive a written copy of your agreement which clearly defines:

• How much you will be required to repay for your loan.
• What type of loan it is.
• The terms and dates of your payments.
• What will happen if your loan is cancelled, or if you pay it off early.

Not all lending companies adhere to the Consumer Credit Act, and some even operate illegally. Therefore, if you are considering taking a loan from a company which offers loans outside of the CCA, it’s important to find out whether or not they are FSA approved. A reputable company, such as www.1ststop.co.uk, will display this information clearly, but if not you are free to request it before signing a loan agreement.

Cancelling Lending Agreements

Everyone has the right to cancel a lending agreement, providing you do so within 14 days of the agreement being agreed upon. However a lending agreement cannot be cancelled if you have already signed the agreement document, and there are certain types of loans – including mortgages – which cannot be cancelled once agreed to.

Checking the Terms and Conditions

Before you agree to a loan, whether verbally or in writing, it’s always a good idea to thoroughly check the terms and conditions of the loan agreement. This is because an agreement of this nature is legally binding and you may incur a penalty for backing out early. If in doubt, always talk to your credit provider. They are obliged to advise you in full about every point of your agreement, before you sign.

Claimant hopes he is inching towards justice

From the Consumerist 10/01/11:

What with all that free healthcare and those easygoing natures up north in Canada, there's not much to get upset about. So why not sue over a penis enlarger to stir stuff up?

A Quebec man says that even though he used the penis enlarger in question for 500 hours total, it never worked. Imagine spending that much time with something that is doing absolutely nothing!

500 hours?! That’s dedication for you. But really – was there no (ahem) change whatsoever? 

If not, surely there was a point along the way before the claimant had amassed a whopping 500 hours of use that made him think, “maybe this isn’t working”.

He's going before small claims court, trying to get $762 in moral and punitive damages and to cover the cost of the tool [snicker snicker] in question, the $262 X4 Extender Deluxe Edition, says the Chronicle Herald.

At least he didn’t suffer any kind of injury or otherwise do himself a mischief stretching himself seven ways to Sunday!

I was going to produce some kind of spoof graphic for this post, but having stumbled across the manufacturer’s website, my reaction to their own banner was too good to omit.

Ouch!  That sounds horribly like spinal traction to me!!

With all those apparently wasted hours behind him, the man told a paper in Granby, Que., that he was speaking out so that other men wouldn't make the same mistake he had. A judge is expected to rule on the case in the next month and a half.

The story was posted on Consumerist back in early January, but after a quick search on Google, I’ve not been able to find any kind of update on the judgment. This case has really been inching along! Maybe the judge wanted to try the product for himself?

Anyhoo, all of this excitement has reminded me of a hilarious moment late last year in one of TWiT podcasts I regularly listen to.  Here’s a snippet.

What started out as an innocent discussion about the form factor of tablets / slate PCs quickly degenerates into something much worse!

 

Oh yes–Cali’s a sceptical kinda girl!

A Fishy Problem

From BBC News 22/04/10:

A fish and chip shop owner has been fined after his business passed a cheaper fish off as cod.

Trading standards officers analysed "cod" purchased at C'or Blimey in Bourton-on-the-Water, after a tip off from a member of the public in 2009.

They found the flesh was from panga - a cheaper, tropical fish.

Shop owner Neil Amsingh, 49, of Coventry was fined £1,000 and ordered to pay £1,000 court costs by Cheltenham Magistrates. He admitted the offence.

Naughty, Naughty!

The head of Gloucestershire County Council's Trading Standards, Eddie Coventry, said: "Panga sells for half the price of cod at market, but in some chip shops, customers are being charged the same price as cod, leading to a tidy profit for the unscrupulous chip shop owner.

"There is no reason why panga cannot be sold, but it must be described accurately so that customers get what they ask for at the counter."

Pangas are small salt-water fish, commonly caught off the coast of Southern Africa.

Mr Ambsingh could have perhaps tried a rather fanciful line of argument by claiming that him deceiving consumers in selling them cod when it was in fact Panga, was helping to preserve the rapidly dwindling (read: soon to be extinct) cod stocks. In other words, he was acting for the greater good of the planet which arguably should outweigh the financial welfare of a few gluttonous citizens who continue to gorge themselves on cod, despite the broad public awareness that the species is really ‘on the rocks’*.

If customers knew it wasn't cod they were buying, it’s likely they wouldn’t be as keen and if Mr Amsingh had charged a substantially lower price for it (i.e. passing the cost-saving on to the customers) they would almost certainly have grown suspicious.  Also, while the taste might be comparable, many customers simply have no sense of adventure in sampling other species with their portion of chips and might fear of being seen as a ‘cheap-skate’*.

But, nah... I wouldn’t have rated his chances very highly of successfully arguing that either. Would have been interesting to try though!  Also, it’s possible Mr Amsingh simply admitted his guilt after feeing such a ‘Panga’* of guilt!! ;-)

* I’m just on fire today!! ;-)   *Sigh* ……… I'm here all week, folks!  :p

"Carphone Warehouse broke Data Protection Act, says ICO"

From Outlaw News 17/01/08

“The Carphone Warehouse allowed customers to view other people's account details, passed inaccurate information on to debt collectors and opened accounts in the wrong name, according to the Information Commissioner's Office (ICO).

The actions were in breach of the Data Protection Act and the ICO has issued Carphone Warehouse and sister company Talk Talk with enforcement notices ordering them to comply with the Data Protection Act. If they fail to do so they risk a criminal prosecution.

"Both companies failed to meet the basic principles of the Data Protection Act," said an ICO statement.

Carphone Warehouse said that the incidents happened when the company was extremely busy.”

Sounds about right.

This story is worthy of a mention on law actually for at least two good reasons. Firstly, frequent readers of my blog will recall my penchant for covering stories relating to data protection issues and associated bungles, foul-ups and all the rest of it. Secondly, I’ve actually done a stint at ‘Carphone’ myself – not an entirely happy episode it has to be said, but there it remains etched in my memory, despite my best attempts to sweep it under the proverbial carpet.

I’ve no doubt Carphone Warehouse will have learnt its lesson from this run-in with the ICO. Far be it for me to criticise them, of course.

Finally - Data Protection Law to be Reviewed

From: Outlaw 14/12/07

The Government has launched a consultation into how personal data is treated in the aftermath of the HM Revenue and Customs' loss of 25 million people's sensitive information.

Information Commissioner Richard Thomas is one of the two men in charge of the consultation, which will focus on the use and sharing of information. The other is Government science and technology advisor Dr Mark Walport.

The consultation will consider changes to the Data Protection Act and will present Government with options for changes to the law.

“The review will be concentrating on information sharing. When do public bodies, in particular, need to make use of personal information held by others to do their job properly?" said Thomas. "Law enforcement, child protection and more personalised services may be examples. But we will need to assess the dangers if information is shared too freely."

And about time too.  This one is long overdue and imposing more stringent guidelines and operating procedures for data controllers has become a necessity.  The fact it's taken a series of high-profile blunders to bring about a review of the law is a crying shame and highlights the need for a more proactive review process of legislation.  Clearly the changes in the law must be mirrored by a change in attitude and working practices.  Simply making it compulsory for data controllers to encrypt data is of little use as to be viewed or edited, data must be unencrypted - thus returning it to a vulnerable state.  Better education and attention to security policies by those who work with data and more stringent rules relating to how and when data may be unencrypted and disseminated are needed to close the existing holes in the net. 

Small print could soon be a thing of the past

From Outlaw.com 19/11/07:

"Information requirements are an irritant for business and consumers routinely ignore the small print overload because it is turgid and confusing, according to a Government study. A new report calls for a rethink by policy-makers and businesses.

Consumer[s]... are not necessarily making informed decisions [about purchases] – meaning it is unlikely that regulated information is having a major impact on their behaviour."

The study further found that, "Consumers ignore the detail, especially when making spontaneous decisions, for example, when being offered a store card at point of sale. Low literacy groups said the small print was scary and humiliating. Other groups were blasé about ignoring the contract detail, describing it as unimportant and boring. When prompted for their reaction to wording such as "The Consumer Credit Act 1974" people "glazed over", according to the researchers. A representative response: "What the hell is the Consumer Credit Act 1974 anyway?"

I know how they feel, particularly having studied the monster in my Consumer Law module as an undergrad. Just kidding. The bottom line here is that something MUST be done about the issues relating to small-print - its ineffectual, pedantic and frankly, not fit for purpose. The idea of using layman's terms, flow diagrams, symbols and colours is a good one. Better education of the salespeople in relation to the goods they are selling and how they are affected by the CCA wouldn't be a bad thing either.

A simpler or alternative redrafting of the Act for reproduction in contract documents actually issued to consumers would perhaps be in order too. Of all the Acts out there, sections of the CCA, must be amongst the most commonly read by consumers and its wording should reflect that. Going even further, maybe businesses who sell products pursuant to the CCA should be required to produce an additional help-sheet providing a simplistic breakdown of information relating directly to the type of goods they sell and how it will affect the consumer's purchase. After all, if obligations are going to be imposed on businesses to conform to the CCA, they might as well be effective and worth the time and effort of implementing.