Lucy HadrillLast week, MPs debated the Consumer Rights Act 2015 and the Consumer Ombudsman Scheme (COS) in the House of Commons. Sir Roger Gale chaired the 30 minute debate brought by Martyn Day (SNP) who previously raised the Act in a public petition in 2017, highlighting that it does not do enough to protect consumers against rogue traders who do not comply with its terms. Mr Day’s petition urged the government of the time to review the Act to ensure better protection for consumers.
In the debate Mr Day criticised the Act for not containing any provision to enforce consumers’ right to reject goods within 30 days and to receive a refund when the goods received are faulty or not as described, labelling this a ‘failing’. Drawing on one of his constituent’s experiences, he further highlighted that consumers cannot act against companies which do not participate in the COS, meaning their only option for redress is bringing legal action in the small claims court (or via a simple procedure in Scotland). Mr Day commented that it would benefit both consumers and traders if membership of ombudsman schemes were made mandatory for all organisations (currently membership is voluntary).
The MPs also discussed the use of alternative dispute resolution (ADR) to resolve disputes. Consumers have a right to take a dispute to ADR in the finance, energy, telecoms, estate agents and legal services sectors. However, in other sectors no such mandatory requirement exists and whilst is it available for businesses to use, they can also refuse to participate in an ADR process. Following Mr Day’s 2017 petition, the government produced a Green Paper in 2018 which consulted on how to improve the ADR system and how to support local and national enforcers to work together to protect consumers. Mr Day noted that, despite the Green Paper consultation closing in July 2018, no amendments have been made to the Act to tackle the situation. He also called for the consultation feedback to be published.
Kelly Tolhurst, the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy, responded by confirming that the government intends to launch a consumer and competition Command Paper, in which it will examine the areas of the dispute resolution landscape that are not working for consumers and set out proposals for reform. The government intends to consult on the proposals before taking any final decisions on the scope and nature of reform. Respondents will be able to present evidence in relation to the effectiveness of consumer redress mechanisms, including the role of ombudsmen and ADR provision.
The Command Paper will be published in spring 2020.
