A new dawn for UK consumer law

On the consumer law side, the Government has confirmed the key dates below :

April 2025 – The CMA’s new consumer enforcement regimes and aspects of the DMCC  which replace the current unfair trading regulations of 2008 will commence.  The new savings scheme rules will also not commence before April 2025.

Spring 2026 – The new legal framework applying to subscription contracts will not be implemented earlier than this, giving businesses time to adjust their technical capabilities to comply.

Changes to UK competition law and a new digital markets competition law regime are expected to come into force by the end of this year/start of 2025 (see A new dawn for UK competition law: Less then 3 months to go before new competition powers come into force).

You are very welcome to join us for our Webinar, Legal Update on the DMCC, between 14:00pm and 14:40pm on Tuesday, 3^rd of December 2024. We will provide a comprehensive Legal Update on the DMCC and the changes made to both Competition law and Consumer law. To register to join this Webinar, please use this link. A recording will be available following the 3^rd of December.    

The CMA’s new enforcement powers

This means that there is now six months before the CMA will be able to directly enforce consumer law upon businesses.

As we have previously commented,  the CMA’s new enforcement powers include the ability to issue the following substantial fines

• Breaching consumer laws: up to 10% of annual global turnover
• Breaching an undertaking to a regulator: up to 5% of global turnover and an ongoing fine of 5% of daily global turnover
• Providing misleading or false information to a regulator:  a fine of up to 1% of global annual turnover

Examples of consumer law breaches include:

Using unfair terms,  for example,  having the ability to vary contractual terms,  the subject matter or the price unilaterally;

Engaging in unfair commercial practices, such as misleading or providing unclear information about the contract or the applicable charges,  such as music or sport tickets;

Imposing unfair default or penalty charges,  for example,  where a consumer damages a hotel room or a hire vehicle or cancels their booking;

Misleading consumers about their legal rights,  for example, limiting their rights to return faulty goods or their right to complain about services, or failing to provide the statutory cooling off periods;

Misleading consumers about the nature of the products or services being sold,  for example, stating that an item is “100% Environmentally Friendly” when the product is not.

What can businesses do now with only six months to go?

There is still time to review consumer facing contracts and materials for compliance before the DMCC comes into force. Many of our clients are already getting ready for the  new enforcement powers, and taking steps to ensure they do not find themselves facing regulator criticism going forward.  Below are some examples of what we are seeing at the moment:

• A review of customer complaints to identify any potential weaknesses
• Consideration of the customer journey and the numerous interfaces with consumers, such as advertising,  websites and after sales service
• Reviewing fees,  prices and charges and how these are presented to the consumer and what processes are in place to change them in the future
• A review of consumer facing terms and conditions, consumer notices and guarantees
• Considering any default or breach charges that might be applied and understanding how these are calculated
• Whether subscriptions are used, and if so, conducting a gap analysis against the new subscription regime
• A review of any green / environmental /sustainability claims about the business or any of its products

Eve England,  a Partner at the Eversheds Sutherland Consumer Law team said,  “It only seems like yesterday that these legal changes were part of the previous Governments plans.  After following the journey of the DMCC through Parliament up to its adoption in May 2024 these laws are now becoming a reality.  The next six months will go quickly and we recommend that businesses carefully consider their compliance with consumer law now to identify any weaknesses prior to the new CMA enforcement regime.”