CMA crack down on consumer rights in COVID-19

2nd June 2020

Somewhat unsurprisingly, the current climate has seen the Competition and Markets Authority (CMA) receive increasing numbers of complaints from consumers in relation to cancellations and refunds within contractual relationships.

As a result, the CMA established a consumer rights COVID-19 taskforce to respond specifically to such problems and provide guidance on the measures to be taken to contain them going forward.

Consumer rights in COVID-19 complaints

Complaints regarding holidays and airlines account for three quarters of the total number of complaints about cancellations relating to COVID-19. This is expected to increase with the summer holiday season fast approaching.

Businesses should be aware that despite the unprecedented and challenging circumstances we are all currently finding ourselves in, the CMA still expects a full refund to be offered to consumers in the following situations:

  • where a business has cancelled a contract without providing any of the promised goods or services;
  • where no service is provided by a business because this is prevented due to the current government public health measures; and
  • where a consumer cancels or is prevented from receiving any service because the current government public health measures mean they are unable to use the service.

The consumer rights COVID-19 taskforce initially prioritised three areas of particular concern, with a fourth soon being added on, as follows:

  1. weddings and private events – including the refusal by venues to refund any money for the cancellation of such events, and telling people to claim on their insurance instead;
  2. holiday accommodation – including consumers being pressured to accept vouchers instead of refunds;
  3. nurseries and childcare providers – including nurseries requesting parents pay very high sums of money to keep a place open for their child whilst their nursery is closed;
  4. package holidays – including the refusal of refunds, the practice of making it very difficult for consumers to obtain refunds, and insisting consumers accept vouchers or rebook for a later date.

If you have seen or experienced businesses behaving unfairly during the coronavirus pandemic in relation to cancellations and refunds, the CMA encourages you to report this via their online complaints form.

The extortionate hand sanitiser…

The coronavirus pandemic and the resulting restrictions implemented throughout the world also present a significant risk of prices being raised above justifiable levels, particularly for essential goods. The consumer rights COVID-19 taskforce is also investigating complaints of this nature and collating evidence about price rises further up the supply chain.

They have asked those reporting to specify, where possible, the original price and the raised price. The Association of Convenience Stores (ACS) has also urged retailers to report those attempting to raise prices unfairly.

Businesses experiencing large price rises or other unfair practices from their suppliers are encouraged to report this on the CMA website.

Enforcement action

Businesses need to be aware that the CMA has a range of options at its disposal to tackle harmful practices. Should it find evidence that companies are failing to comply with the law, appropriate enforcement action will be taken. This includes recourse to court proceedings if a firm does not address its concerns.

Businesses should continue to strictly follow consumer protection legislation, namely the Consumer Rights Act 2015 and the Consumer Protection from Unfair Trading Regulations 2008, and seek legal advice where they are unsure of their position.

Similarly, individuals should be aware that they are able to take their own legal action against unfair terms, should such a need arise.

We have specialist dispute resolution lawyers who are experts in this area advising both businesses and consumers on contractual disputes. If we can be of any assistance in respect of a dispute please contact us to discuss the position further.

This article has been co-written by Heather Welham and Vikki Sidaway.

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