Digital Markets, Competition and Consumers Act 2024

Part 4: Consumer rights and disputes

Chapter 1: Protection from unfair trading

Introduction

Section 224: Overview

This Chapter largely recreates the legal effect (with minor amendments) of the Consumer Protection from Unfair Trading Regulations 2008 (S.I. 2008/1277) and has the same core objective of protecting consumers from unfair commercial practices. The regulations were made to implement in the UK the Unfair Commercial Practices Directive 2005/29/EC (UCPD).
This section provides an overview of the sections in this Chapter on unfair business to consumer commercial practices.
Section 225 sets out the unfair commercial practices that are prohibited.
Sections 226 to 230 set out details of commercial practices that are misleading, aggressive, omit material information, or contravene the requirements of professional diligence.
Section 231 sets out how the unfair commercial practices are enforced by public bodies.
Sections 232 to 235 confer the consumer rights of private redress in relation to certain unfair commercial practices and provide for related matters.
Section 236 sets out what the consumer may do when they are supplied with a product from a trader that they did not request.
Sections 237 to 241 set out the criminal offences in relation to unfair commercial practices and provide for related matters.
Sections 242 to 252 set out miscellaneous and interpretative provisions as well as consequential and transitional provisions.

Prohibition of unfair commercial practices

Section 225: Prohibition of unfair commercial practices

This section sets a general prohibition on unfair commercial practices.
Subsection (2) prohibits any person who is responsible for the content of a code of conduct or for monitoring compliance with a code of conduct from promoting unfair commercial practices through the content of that code or in connection with that code. A code of conduct under Section 249 means an agreement or set of rules that define the behaviour of traders who agree to be bound by it. This includes codes of conduct relating to specific trades or industries.
Subsection (3) defines "commercial practice", "consumer" and "trader" for the purposes of this Chapter.
The definition of a commercial practice is broad and far reaching. A commercial practice can be derived from a single act or omission, depending on the relevant circumstances, as well as from repeated behaviour and a course of conduct (R v X Ltd [2013] EWCA Crim 818, at paragraph 22, Warwickshire County Council v Halfords Autocentres Ltd [2018] EWHC 3007 (admin), at paragraph 28). Subsection (3), paragraph (b) of the definition of commercial practice makes it clear that a commercial practice includes acts or omissions by a trader relating to a third party trader’s goods, services or digital content. Subsection (3), paragraph (c) of the definition of commercial practice establishes that an act or omission by a trader that enables private individuals (i.e. consumers) to sell products to that trader or another person are included in the definition of commercial practice. Subsection (5) makes it clear that a commercial practice includes acts or omissions which take place before, during or after promotion or supply. For example, the acts or omissions of a debt collection agency who acquires claims derived from consumer credit agreements with consumers and seeks to recover these debts some considerable time after the original consumer credit agreements were concluded can amount to a commercial practice. An act or omission need not relate to a promotion or supply to or from consumers which actually occurs, in order to amount to a commercial practice. This concept is concerned with systems rather than individual transactions between a consumer and a business. (Warwickshire County Council v Halfords Autocentres Ltd [2018] EWHC 3007 (admin), at paragraph 29).
The definition of "consumer" makes it clear that a consumer must be an individual (i.e. a natural person) and so excludes body corporates. The individual must be acting for purposes wholly or mainly outside of their business. It is irrelevant whether the individual is supplying, or receiving, a good, service, or digital content. The words "wholly or mainly" make it clear that:
1. The individual is still a consumer when acting for dual purposes (a consumer purpose and a business purpose) as long as the consumer purpose is the main purpose. This means, for example, that a person who buys a kettle for their home, works from home one day a week and uses it on the days when working from home would still be a consumer. An individual who occasionally sells their unwanted and used clothes on eBay is also likely to be a consumer. Conversely, a sole trader who operates from a private dwelling and buys a printer of which 95% of the intended use is for the purposes of their business, is unlikely to be a consumer.
2. An individual who supplies goods or services for mainly non-business purposes to a person who receives them for business purposes will still be a consumer. For example, an individual who sells their personal vinyl record collection to a second-hand record shop is likely to be a consumer.
3. Further, an individual who acts for the purpose of a future business, which is not yet up and running, is likely to be a consumer. For example, an individual who participates in training to gain skills or a qualification with a view to supply products for business purposes in the future is likely a consumer.
Subsection 3, paragraph (a) of the definition of trader states that any person who is acting for purposes relating to their business is a trader.
Subsection 3, paragraph (b) of the definition of trader says that a person (for example, an agent, subcontractor or representative) acting in the name of, or on behalf of, another person, for purposes relating to that other person’s business, is also considered a trader for the purposes of this chapter. It is irrelevant whether a person acting in the name of, or on behalf of, another is also acting for their own business in relation to the same act or omission.
Subsection (4) provides that for the purposes of the prohibition in subsection (1), unfair practices are commercial practices that are likely to cause the average consumer to take a transactional decision they would not have taken otherwise as a result of misleading actions, misleading omissions, aggressive practices, or a contravention of the requirements of professional diligence; that omit material information from an invitation to purchase; and commercial practices specified in Schedule 20. Commercial practices specified in Schedule 20 are considered unfair practices in all circumstances.

Schedule 20: Commercial practices which are in all circumstances considered unfair

This Schedule lists the commercial practices which are automatically considered unfair in all circumstances, and which are prohibited. The transactional decision test does not apply to these practices, meaning that a trader that carries out any of these commercial practices can be sanctioned by enforcers without assessing whether it is likely to cause the average consumer to take a different transactional decision in relation to a product.
Subsection 13(1) prohibits the submitting or commissioning of fake consumer reviews or consumer reviews that conceal the fact that they have been incentivised. A description of what a consumer review that conceals the fact that it has been incentivised means is provided by subsection 13(5)(c).
Subsection 13(2) prohibits publishing consumer reviews, or consumer review information, in a misleading way, for example platforms (or third-party traders operating on platforms) publishing consumer reviews in a misleading way by swapping a review of one product to another product (‘catalogue abuse’). A non-exhaustive list of what publishing in a misleading way includes is also provided by subsection 13(5)(i). Definitions of ‘consumer review information’ and ‘publishing’ are provided by subsections 13(5)(d) and 13(5)(h) respectively.
Subsection 13(3) requires traders that publish consumer reviews or consumer review information, from third parties to take reasonable and proportionate steps to prevent inadvertent publication of fake consumer reviews, consumer reviews that conceal the fact they have been incentivised, or consumer review information that is false or misleading and remove such reviews or information. What are reasonable and proportionate steps will depend on the circumstances of the case and what is necessary to prevent the publication of this information, and include assessment of the risk of publication of false or misleading information. The Competition and Markets Authority will publish guidance to assist traders in understanding their obligations.
Subsection 13(4) prohibits offering services to traders to (a) submit or commission fake consumer reviews, or consumer reviews that conceal the fact they have been incentivised or (b) publish consumer reviews or consumer review information in misleading ways. It would also prohibit offering services to facilitate these commercial practices. For example, by offering services that increase the chance of a fake consumer review being successfully posted on a platform or website by virtue of their expertise in bypassing the platform or website’s fake review detection measures. Facilitation may also extend to intermediary platforms that are aware of and allow fake consumer review services to be sold by traders on the platform.
Subsection 13(5) sets out definitional information for this section.

Section 226: Misleading actions

This section defines commercial practices that are misleading actions. The section prohibits traders from using misleading actions in a wide range of circumstances, including the use of misleading information relating to a product, a trader, or any other matter relevant to a transactional decision. A commercial practice can also be a misleading action if its overall presentation is likely to deceive the average consumer. Transactional decision is a broad concept covering both pre-purchase and post-purchasing decisions and includes decisions on whether to do something, or not to do something, there does not need to be an actual transaction between the consumer and trader. For example, it includes decisions on whether to visit a shop, to click through a website, to exercise a cancellation right or to pay a debt as well as a decision to purchase a product or to enter a contract.
For a commercial practice to be a misleading action, it must meet two conditions: first, the practice matches at least one of the descriptions outlined within subsection (1), and second, it is likely to cause the average consumer to take a transactional decision they would not have taken otherwise.
Subsection (2) and (3) clarify that even if information provided to consumers is factually correct, it can still be misleading as a result of the way it has been presented. For example, if a product has more than one charge, and a trader highlights just one of those charges on their website and provides less conspicuous information about the other charge(s), the information provided may be misleading by creating the impression that the product is cheaper than it really is (see for example C-611/14, Canal Digital Danmark A/S at paragraph 49). A practice like this could also amount to a misleading omission.
Subsection (4) clarifies that ‘another trader’ refers to a different trader to the trader supplying the marketed product for subsection 1, paragraph (c).
Subsection (5) clarifies a requirement in a code of conduct relevant for subsection 1, paragraph (d) is a requirement imposed on a trader where compliance can be verified and in relation to which the trader does not have discretion.

Section 227: Misleading omissions

This section defines commercial practices that are misleading omissions. The section prohibits traders from omitting or hiding information, or providing it in an unclear (which includes, unintelligible and ambiguous) or untimely manner. The section ensures that consumers get from traders all the information they need to make informed decisions in an upfront, clear, and timely manner.
For a commercial practice to be a misleading omission, it must meet two conditions: first, the practice must fall into subsection (1) by a) omitting material information, b) omitting information which the trader is required to give to the consumer under another enactment or c) failing to identify its commercial intent, and second the practice, is likely to cause the average consumer to take a transactional decision they would not otherwise have taken. Transactional decision is a broad concept covering both pre-purchase and post-purchasing decisions such as a decision about whether, how or on what terms to purchase, retain or dispose of a product. It includes decisions whether to do something, or not to do something. For example, it includes decisions whether to visit a shop, to click through a website, to exercise a cancellation right or to pay a debt as well as a decision to purchase a product or to enter a contract. It does not have to lead to a purchase. There does not need to be an actual transaction between the consumer and trader.
Material information is the full information that the average consumer needs to have, given the context, to make an informed transactional decision.
As indicated, a commercial practice also falls within this section if it omits information which the trader is required under any other enactment to give to the consumer as part of the practice or where a commercial practice does not identify its commercial intent. Examples of how commercial intent may be made clear include the presence of price, or a statement making it obvious that the practice is commercial. The context may also make clear that the intent is commercial - for example, information on a billboard that is obviously intended to market or advertise a product.
Subsection (3) provides that when considering whether material information has been omitted, account must be taken of the means of communication and what that allows for, including any limitations that are the result of space or time constraints, as well as the steps taken by the trader to overcome those limitations. For example, a trader selling cereal bars advertises a ‘t-shirt for £1’ offer on the wrappers. The wrapper is too small to include all of the information on the various conditions that apply (such as restrictions on the availability of the t-shirts). The trader is less likely to commit a misleading omission if they include important information on the wrapper, and make clear on the wrapper that terms and conditions apply and provide details of where they can be found.
Subsection (4) elaborates on the meaning of omitting information and clarifies that it applies when a trader provides material information in an unclear or untimely manner, or in a way that the consumer is unlikely to see, as well as when a trader fails to provide material information at all. The effect is that as well as considering how the words used in the commercial practice may be interpreted by the consumer, consideration also needs to be given to how the information is displayed, such as the font size used, the positioning and colour of text, and whether material information is sufficiently prominent. Examples of material information that a consumer is unlikely to see could include information provided only in the ‘small print’ terms and conditions, or which is only accessible by the consumer if they click on a hyperlink that could be missed or not opened.

Section 228: Aggressive practices

This section defines commercial practices that are aggressive practices, which can involve behaviour before a contract or purchase is made (if any) but can also occur after a transaction has taken place.
For a commercial practice to be an aggressive practice, it must meet two conditions: first, the practice uses harassment, coercion or undue influence (as defined), and second, it is likely to cause the average consumer to take a transactional decision they would not otherwise have taken. Transactional decision is a broad concept covering both pre-purchase and post-purchasing decisions and includes decisions whether to do something, or not to do something. For example, it includes decisions whether to visit a shop, to click through a website, to exercise a cancellation right or to pay a debt as well as a decision to purchase a product or to enter a contract.
Subsection (2) lists the factors that must be considered in determining whether a commercial practice uses harassment, coercion or undue influence.
Subsection (3), paragraph (a) also clarifies that coercion includes physical force.
Subsection (3) provides more detail on the use of coercion and defines the meaning of "undue influence." In relation to undue influence, there are numerous circumstances where a trader may be in a position of power, for example this may arise because of the trader’s expertise regarding a product or as a result of the particular circumstances of the consumer, for example if the consumer is indebted to the trader or otherwise is in a vulnerable position. The application of pressure in a way which significantly limits the consumer’s ability to make an informed decision can also arise in numerous circumstances. For example, where a consumer is informed that if they do not sign a contract immediately any subsequent contract entered into with the trader would be on less favourable terms.

Section 229: Contravention of the requirements of professional diligence

This section defines commercial practices that contravene the requirements of professional diligence. It sets an objective standard, determined in light of what is reasonable reflecting what traders ought to do, measured by reference to honest market practice or the principle of good faith in the trader’s field of practice.
For a commercial practice to contravene the requirements of professional diligence, it must meet two conditions: first, the practice falls below the standard of skill and care which a trader may reasonably be expected to exercise towards consumers, and second, it is likely to cause the average consumer to take a transactional decision they would not otherwise have taken.
"Honest market practice" means no more than the market practices of reasonable and honest traders in the field of activity. However, poor practice that may be widespread in a particular industry or sector does not equate to an acceptable objective standard. Considerations of honest market practices and good faith also involve looking at whether the legitimate interests or expectations of the average consumer in the particular sector have been taken into account by a trader (see for example C‑310/15 Vincent Deroo-Blanquart v Sony Europe Limited at paragraph 34).
"Good faith" means one of fair and open dealing. For example, a trader should not take advantage of the consumer’s lack of experience or unfamiliarity with a product. "Standard of skill and care" is not intended to convey or require more than would be reasonably expected of a trader in their field of activity.

Section 230: Omission of material information from invitation to purchase

This section sets out the conditions under which a commercial practice that is an invitation to purchase omits material information. However, if context makes information apparent, it does not need to be provided by the trader to the consumer as part of the invitation to purchase.
"Invitation to purchase" is defined in subsection (10). An invitation to purchase can exist in the entire phase before it is possible to make a purchase, not just immediately before entering the contract. The effect of the definition is that a commercial practice can constitute an invitation to purchase even where the information indicating the price and product’s characteristics is minimal. For example, in the case of C-122/10 Konsumentombudsmannen v Ving Sverige AB, an entry level price was held to be sufficient and only a visual or verbal reference was held to be necessary to describe a product that was available in many versions.
Following an invitation to purchase, the next step or likely transactional decision taken by the consumer does not necessarily have to be to purchase, and an invitation to purchase does not need to include an actual opportunity or mechanism to enable the consumer to purchase the product (nor does such an opportunity need to appear in close proximity to the communication).
Subsection (2) lists the categories of information considered to be material when a commercial practice is an invitation to purchase. It specifies that the total price of the product must be presented to consumers when there is an invitation to purchase and requires that where there are mandatory fees associated with a product that are not fixed and therefore cannot be pre-calculated, for example delivery fees, information about how these variable fees will be calculated must be provided to consumers.
Subsection (4) specifies that the total price of the product includes any fees, taxes, charges, or other payments that a consumer must pay to purchase the product.
Subsection (5) requires that where there are mandatory fees associated with a product that are not fixed and therefore cannot be pre-calculated, the information provided about how these variable fees are to be calculated must enable the consumer to calculate the total price of the product. This information must be set out with as much prominence as the headline price of the product, for example where a headline price is displayed on the webpage, information about the variable fees should not be presented in smaller text at the bottom of the page.
Subsection (6) outlines what "identity" in relation to a trader means and subsection (7) outlines what the trader’s "business address" means.
Subsection (8) provides that when considering whether material information has been omitted, account must be taken of any limitation resulting from the means of communication used and steps taken by the trader to overcome those limitations. The means of communication may include for example, apps, webpages, and in-store banners.
Subsection (9) elaborates on the meaning of omitting information. It clarifies that omitting information includes the provision of material information in an unclear or untimely manner, or in a way that the consumer is unlikely to see, as well as a failure to provide material information at all. The effect is that consideration is required of not only how the words used in the commercial practice may be interpreted by the consumer but also how the information is displayed, for example the font size used, the positioning and colour of text, and whether material information is sufficiently prominent. Examples of material information that a consumer is unlikely to see could include information provided only in the ‘small print’ terms and conditions, or which is only accessible by the consumer if they click on a hyperlink that could be missed or not opened.

Public Enforcement

Section 231: Public enforcement

This section provides for the enforcement of the prohibition of unfair commercial practices set out in section 225. Local weights and measures authorities in Great Britain (known as Trading Standards) have a duty to enforce the prohibition of unfair commercial practices in their areas. Similarly, the Department for the Economy in Northern Ireland has a duty to enforce the prohibition of unfair commercial practices in Northern Ireland.
The CMA has the power to enforce the prohibitions of unfair commercial practices in section 225.

Consumers’ right to redress relating to unfair commercial practices

Section 232: Right to redress

This section sets out the conditions under which a consumer has a right to redress. Consumers can make a claim in the civil courts against traders who commit misleading actions or aggressive practices. The conditions are outlined through subsections (2) to (5).
Subsection (1) provides that a consumer has a right to redress if the four conditions set out in subsections (2) to (5) are met.
Subsection (2) provides that the first condition can be satisfied where: a) the consumer enters into a contract with a trader for the supply of a product from the trader to the consumer ("business to consumer contract"), b) the consumer enters into a contract with a trader for the supply of a product from the consumer to the trader ("consumer to business contract" or c) the consumer makes a payment to the trader for the supply of a product (see section 248, subsection (1)).
Subsection (3) sets down the second condition namely that the trader engages in a misleading action or aggressive practice in relation to the product or, where a business to consumer contract for goods or digital content is entered into by the consumer, a producer (as defined in subsection (6)) engages in a misleading action or an aggressive practice and the trader is aware of the prohibited practice or could reasonably be expected to be aware of it.
Subsection (4) sets down the third condition, which is that the misleading action or aggressive practice is a significant factor in the consumer’s decision to enter the contract or to make payment for the product.
Subsection (5) sets down the fourth condition, which specifies that the goods are not excluded products by regulations under section 233.
Subsection (6) defines "producer" and subsection (7) defines "prohibited practice" (i.e. a misleading action or an aggressive practice) for the purpose of this chapter.
Subsection (8) sets out how the reference to transactional decision in section 225 for an aggressive practice and misleading action is to be applied for the purpose of this section.

Section 233: Rights to redress: further provision

This section sets out a delegated power for the Secretary of State to provide for the exercise of rights of redress for a consumer under this Chapter in relation to a right to unwind in respect of a contract; a right to a discount in respect of a supply of a product under a contract; and a right to damages. For rights to redress until regulations are made under section 233, see section 252.
Subsection (2) sets out examples of what the regulations under this section may include for the purposes of this delegated power, and subsection (3) provides examples of what the consequences of the exercise of a right specified in subsection (2), paragraph (e) may be.

Section 234: Enforcement of rights of redress

This section sets out how a consumer can enforce a right to redress.
Subsection (1) provides that a consumer with the right to unwind, the right to a discount or the right to damages under regulations made under section 233 may take civil action in court to enforce that right and seek redress. If the legal action succeeds, the court must make an order that gives effect to the consumer’s right and any associated consumer obligations under regulations under section 233 (see subsection (3)).
Subsections (4) and (5) explain that in relation to a claim (under this section) in England, Wales and Northern Ireland, the usual contractual limitation period of six years applies.

Section 235: Relationship between rights of redress and other claims relating to prohibited practices

This section outlines the relationship between the right to redress and other claims that are related to prohibited practices (i.e. misleading actions and aggressive practices).
Subsection (1) ensures that nothing in Chapter 4, Part 1, prevents a consumer pursuing a claim under a rule of law, equity, or other legislation.
Subsection (2) has the effect that the consumer cannot recover compensation twice for the same conduct.

Inertia Selling

Section 236: Inertia selling

This section sets out the circumstances whereby a trader demands immediate or deferred payment or the return or safekeeping of products supplied by the trader but not solicited by the consumer. The consumer is not required to pay for the products supplied by the trader.
Subsection (3) explains that when a consumer is provided with goods that they did not request, the consumer may treat them as though they were an unconditional gift.
Subsection (4) explains that the absence of a response from a consumer following the supply of the product they did not request does not mean the consumer consents to any demands by the trader for the consumer to pay, return, or safely store the product.

Offences relating to unfair commercial practices

Section 237: Offences

This section sets out the conditions under which unfair commercial practices amount to criminal offences.
Subsection (1) sets out that it is a criminal offence for a trader to engage in a commercial practice that involves a misleading action.
Subsections (2) and (3) set out that it is also a criminal offence for a trader to engage in a commercial practice that is a misleading omission or an aggressive practice.
Subsection (4) provides that it is a criminal offence for a trader to knowingly or recklessly engage in a commercial practice that contravenes the requirements of professional diligence (see section 229).
Subsection (5) explains that a trader who fails to regard whether a commercial practice contravenes the requirements of professional diligence is to be considered as being reckless regardless of whether the trader has reason to believe that it might.
Subsection (6) sets out that it is a criminal offence for a trader to engage in a commercial practice that omits material information from an invitation to purchase.
Subsection (7) sets out that it is a criminal offence for a trader to engage in any of the practices outlined in the schedule of commercial practices which are in all circumstances considered unfair (Schedule 20), other than an excluded description.
Subsection (8) outlines that the practices mentioned at paragraphs 12, 13 and 30 of Schedule 20 are excluded descriptions for the purposes of this section namely criminal liability does not attach to them.

Section 238: Defence of due diligence and innocent publication

This section sets out the circumstances in which the person accused (defendant) may rely on the due diligence and innocent publication defences for offences under section 237 that are misleading actions, misleading omissions, aggressive practices, omitting material information from an invitation to purchase, and the specific practices outlined in the schedule of commercial practices in Schedule 20. The defences do not apply in relation to an offence involving the contravention of the requirements of professional diligence.
Subsection (1) covers the defence of due diligence and sets down what the defendant charged with a relevant offence (see above) must prove to rely on this defence. Subsection (4) requires the defendant to obtain the court’s permission before relying on a third- party defence (i.e. the offence was due to the act or omission of a person other than the defendant) unless written notice of such a defence has been given to the prosecuting enforcer at least 7 days before the hearing and containing the information set out in subsection (4), paragraph (a).
Subsections (2) and (3) cover the defence of innocent publication, which is available when the defendant is charged with a relevant offence (see above) that is alleged to have been committed by the publication of an advertisement. Subsection (3) sets down what the defendant must prove to rely on a defence of innocent publication.

Section 239: Offences: Criminal liability of others

Subsections (1) to (3) have the effect that if a trader commits a relevant offence under section 237 (see section 237), or would have done so but for a defence under section 238, and this is due to the act or omission of another person, that person commits the offence and can also be charged with an offence, regardless of whether action is taken against the trader.
Subsection (4) specifies that references to a relevant offence under section 237 in other parts of the Chapter include references to an offence under that section by virtue of subsection (2) (where the commission of the offence, or of what would have been the offence, is due to the act or omission of another person, ‘P’, and ‘P’ commits the offence whether or not ‘P’ is a trader and whether or not P’s act or omission is a commercial practice).
Subsection (5) sets out that where a body corporate commits an offence with the consent or connivance of an officer of that body, both the officer and the body corporate is guilty of the offence and liable to be prosecuted and punished. This also applies if the offence is attributable to neglect on the part of the officer. Where the offence is committed by a limited liability partnership (LLP), subsection (6) sets out that members who hold a management function in that LLP may be guilty of an offence should the LLP engage in an offence by virtue of subsection 5. Subsection 7 sets out where a Scottish partnership commits an offence with the consent or connivance of a partner or due to neglect on the part of the partner, the partner as well as the partnership is guilty of the offence and liable to be prosecuted and punished.
Subsection (8) specifies that references to offences under section 237 in other parts of the Chapter include reference to offences by virtue of subsection (5) or (7).

Section 240: Penalty for offences

This section sets out the penalty for offences and is self-explanatory.

Section 241: Time limit for prosecution

This section outlines the time limits for prosecution.
Subsection (1) states that time limits for prosecution apply either within 3 years of the offence taking place, or within 1 year of the discovery of the offence by the prosecutor, whichever is earlier.
Subsection (2) explains how the period of 1 year beginning with the date of discovery of the offence by the prosecutor may be evidenced.

Miscellaneous

Section 242: Powers to amend this chapter

This section sets out delegated powers for the Secretary of State to amend this Chapter.
Under subsection (1), the Secretary of State may add practices, delete practices, or modify existing practices in Schedule 20 (commercial practices which are in all circumstances considered unfair).
Under subsection (3), the Secretary of State may extend the private rights of redress to unfair commercial practices to which redress rights currently do not apply. The Secretary of State may remove the rights of redress from unfair commercial practices so added.
Under subsection (4), the Secretary of State may add descriptions, delete descriptions added under subsection (4), or modify existing descriptions in the list of categories deemed to be ‘material information’ in the context of an invitation to purchase, for the purpose of omission of material information in relation to an invitation to purchase.
Before making regulations under this section, the Secretary of State must consult as required by subsection (5).

Section 243: Crown Application

This section establishes that the Crown is not criminally liable for any infringement of this Chapter but that does not affect the application of any provision of this Chapter applying in relation to a person in public service of the Crown.

Section 244: Validity of agreements

This section establishes that except as resulting from a consumer’s right to redress, an agreement shall not be void or unenforceable by reason only of a breach of the prohibition of unfair commercial practices or of the promotion of unfair commercial practices in section 225(1) and (2).

Interpretation

Section 245: Meaning of "transactional decision"

This section defines "transactional decision" for the purposes of this Chapter. The definition is broad in scope. It includes decisions taken by a consumer to both do something and not do something as well as a decision about whether, how or on what terms to retain or dispose of a product. In assessing whether a commercial practice is likely to cause the average consumer to take a different transactional decision, it is relevant to take into account the combined effect of any or all of the misleading acts and omissions that the trader may have engaged in (see for example Office of Fair Trading v Purely Creative Ltd & Ors 2011 EWHC 106 (Ch) (02 February 2011) at paragraph 72). There may be multiple transactional decisions as part of a single engagement with a trader. Complex transactions may therefore require the provision of information to a consumer at several points.
The definition has the effect that a transactional decision covers a wide range of decisions, including decisions pre-contract (regardless of whether a contract is made or not), at the time of contract, and post-contract.
For example, pre-contract decisions may include a decision to travel to a shop as a result of a commercial offer (see for example C-281/12, Trento Sviluppo srl and Centrale Adriatica Soc. coop. arl); a decision to agree to a sales presentation by a trader; and a decision to click through a website as a result of information relating to the product. A transactional decision also includes decisions regarding payment such as whether to pay a deposit, whether to pay in full, or to make a payment, and how payment should be made.
Post-contract decisions may include a decision to withdraw from or terminate a service contract and a decision to switch to another service provider.

Section 246: Meaning of "average consumer": general

This section defines "average consumer" for the purposes of this Chapter.
Subsection (2) outlines the characteristics of the average consumer. While the standard is objective in character, it recognises that the average consumer’s level of attention is likely to vary according to the category of goods or services in question. Also, for example, it recognises that an average consumer is likely to not be a technical expert. The average consumer definition is not a statistical test or statistical average.
Subsection (3) specifies that the average consumer cannot be expected to know anything that a trader hides from the consumer.
Subsection (4) sets out that where a commercial practice is directed at a particular group, the average consumer is to be understood as the average member of that targeted group.

Section 247: Meaning of "average consumer": Vulnerable persons

This section defines "vulnerable persons" as a particular group for the purposes of this Chapter.
This section is applied in two parts. First, when a person is vulnerable to a commercial practice, or vulnerable to the product related to a commercial practice, in a way that the trader can reasonably be expected to foresee. Second, as a result of the vulnerability, the practice is likely to impact the vulnerable person’s ability to make an informed decision, and therefore they are likely to take a transactional decision that they otherwise would not have taken.
Subsection (2) states that references to the average consumer in this Chapter in cases involving vulnerable persons, are to be read as references to an average member of a group of consumers who are vulnerable.
Subsection (4) outlines some of the ways by which a group of consumers may be vulnerable to commercial practices, or products relating to commercial practices. For example, elderly consumers may be more vulnerable to certain practices like pressure selling because of their age, and consumers affected by a serious illness or physical injury may be more vulnerable to misleading advertising that presents products able to cure them. Vulnerability can also be context dependent, so a group of consumers may become vulnerable due to the ‘circumstances they are in.’ This may include, among other things, being in mourning, going through a divorce, or losing a job. Section 248: Meaning of "product"
This section defines "product" for the purposes of this Chapter.
Subsection (2) specifies that a trader who demands payments from a consumer in settlement of liabilities or purported liabilities is to be treated in this Chapter as offering to supply a product to the consumer. In this case, the product that the trader offers to supply is the full or partial settlement of the liabilities owed.

Section 249: General interpretation

This section summarises how various terms are to be read for the purposes of this Chapter.

Section 250: Index of defined terms

This section is self-explanatory.

Consequential amendments and transitional provision

Section 251: Consequential amendments etc relating to this Chapter

This section outlines the consequential amendments to legislation relating to this Chapter.
Schedule 21 contains citations and references made to the Consumer Protection from Unfair Trading Regulations in other pieces of legislation have been amended to reflect that those regulations have been restated and are now contained in this Act.

Section 252: Transitional and saving provisions relating to this Chapter

This section sets out how this Chapter is to apply in relation to an act or omission which takes place on or after the commencement date of this Chapter. This Chapter applies to an act or omission which takes place on or after the commencement date. The Consumer Protection from Unfair Trading Regulations (S.I.2008/1277) will apply to any act or omission which takes place before the commencement date.
In the case of an act or omission that takes place before the commencement date, and is repeated or continues to take place on or after that date (continuing conduct), "the commencement date" is to be understood as the date on which section 225 (prohibition of unfair commercial practices) comes into force. The Consumer Protection from Unfair Trading Regulations (S.I.2008/1277) will apply in respect of the private rights to redress until regulations for this Chapter made under section 233 come into force.

Chapter 2: Subscription contracts

Introduction

Section 253: Overview

This section provides an overview of the chapter, which provides for duties on traders in relation to subscription contracts, the rights of consumers if those duties are breached, rights for consumers to cancel subscription contracts during cooling-off periods, powers to make further provision in relation to cancellation, offences for failing to provide information about cooling-off rights, and miscellaneous provisions.

Section 254: Meaning of "subscription contract"

This section defines the scope of a "subscription contract". Subsection (1) provides that a subscription contract is a contract between a trader and a consumer for the supply of goods, services or digital content by the trader to the consumer in exchange for payment by the consumer, which contains terms that have the effect set down (in either or both) subsections (2) and (3), and is not an excluded contract, as defined in section 255.
Subsection (2) provides that a relevant fixed term contract or a contract for an indefinite period will be considered a subscription contract if it has auto-renewing features as well as a right to bring the contract to an end, which mean a consumer must take action to stop the continuation of the contract beyond a mandatory period, or stop the renewal or extension of the existing contract period, rather than it terminating by default.
Subsection (3) provides that a relevant contract which involves the supply of goods, services or digital content as a free-trial or at reduced cost for a specified period of time, after which the contract continues at full cost (or the trader has an option to impose a charge or an increase to the original rate), will be considered a subscription contract if the consumer must take action to avoid defaulting to contract terms which involve paying the full or a higher price.
Subsection (4) clarifies that references to a consumer’s right to bring a contract to an end only extend to contractual rights to end the contract which can be exercised by the consumer without incurring a penalty which is more than nominal. In relation to a fixed term contract, this could include an early cancellation right which allows a consumer to exit the contract before the end of the fixed term period.
Where a contract does not meet the definition of ‘subscription contract’ set out in this Chapter, the Consumer Contract Regulations (Information, Cancellation and Additional Charges) Regulations 2013 will continue to apply unless otherwise excluded by those regulations.

Section 255: Excluded contracts

This section and Schedule 22 define "excluded contracts" which could otherwise meet the definition of subscription contract in section 254. Certain contracts that would otherwise be within the scope of this Chapter have been excluded either because there are already regulations that apply to these contracts which provide equivalent or higher consumer protection or where there is another relevant public policy reason. Definitions and descriptions of excluded contracts are provided in Schedule 22.
The Secretary of State has power, by regulations, to amend Schedule 22 to add, modify or remove a description of contract which is excluded. Regulations made under subsection (2) are subject to the draft affirmative procedure.
Subsection (5) refers to section 275 which sets out how the chapter applies to a contract that was an excluded contract at the time it was entered into, but subsequently ceases to be.

Schedule 22: Excluded contracts

Schedule 22 sets out the types of contracts which are wholly excluded from the regulatory duties and consumer rights under Part 4 Chapter 2.
Paragraph 1 specifies that contracts for the supply of regulated utilities, consisting of electricity, gas, supplies of heating, cooling or hot water made by a relevant heat network, the supply of water or sewerage services are all excluded from rules under Part 4 Chapter 2.
Paragraph 2 specifies that contracts for the supply of services of a banking, credit, insurance, personal pension, investment or payment nature are excluded.
Paragraphs 3 and 4 outline the kind of healthcare and medical contract that are excluded from the regulatory requirements under Part 4 Chapter 2. The scope of paragraph (2) is intended to closely follow the scope of the exclusion from the cancellation provisions outlined in regulation 27, paragraph (2), sub-paragraphs (a) and (b) under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. There are two related categories of excluded contract; first, contracts for the supply of a healthcare product under prescription, and second, contracts for the supply of a healthcare product by a healthcare professional under arrangements in the health service and where such products are, in some circumstances, provided free or on prescription. Generally, the specified contracts cover two elements, the purpose of the supply of the product and who is providing it. If the product is related to achieving a health outcome and is given by a relevant healthcare professional for that purpose, or is supplied following a prescription or directions from a prescriber, the contract will be excluded.
Paragraphs 5 to 7 outline legislation which sets the regulatory scope of OFCOM and the Phone-paid Services Authority (PSA) by extension. Contracts which are regulated by either organisation are excluded from Part 4 Chapter 2.
Paragraph 8 specifies that any contract to rent a home is excluded from regulatory duties under Part 4 Chapter 2.
Paragraph 9 is an exclusion intended for micro businesses conducting small scale operations to deliver everyday consumables akin to the exclusion effected by regulation 6 paragraph (1) sub-paragraph (f) of The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (‘CCRs’). In order to fall in scope of this exclusion, a trader must meet the definition of ‘micro-entity’ as per the definition set out in section 384A of the Companies Act 2006. This would apply whether a trader was incorporated or not. The trader would be considered in scope of the exclusion if, in their first financial year, they had reasonable grounds to believe they would satisfy the qualifying conditions. If a trader were to be in a year other than their first financial year, a business would have to look to the preceding financial year to determine if they were in scope of the exclusion. Where a trader delivers everyday consumables to consumers, such products should be delivered by the trader; to fall within the exclusion there should be minimal reliance upon using third party businesses to make delivery.
Paragraph 10 excludes regulated package holidays and other package travel contracts from Part 4 Chapter 2.
Paragraph 11 excludes regulated timeshares and other holiday products from Part 4 Chapter 2.
Paragraph 12 excludes contracts for the supply of childcare and provision of school age education, as well as ancillary products, such as food and drink, supplied in the course of providing childcare, and similar items intended for pupils in connection with childcare activity that may be provided by a separate party to the childcare provider. Childcare includes childcare regulated by Ofsted, childminders, providers on domestic and non-domestic premises and nannies.
Paragraph 13 excludes contracts for forms of gambling which are covered by certain prescribed legislation from the requirements of Part 4 Chapter 2.

Duties of traders

Section 256: Pre-contract information

This section sets out the requirements of traders in relation to information that must be provided prior to the consumer entering into the contract. The pre-contract information consists of 11 items of "key pre-contract information" (in Schedule 23, Part 1) and the "full pre-contract information" (in Schedule 23, Part 2). The key information must be given to consumers for all subscription contracts, regardless of whether this information is apparent from the context. The "full pre-contract information" includes again the "key information" (paragraph 13 of Schedule 23) and additional information set out at paragraphs 14 to 28 of Schedule 23. This additional information only needs to be provided to the extent that it is applicable to the contract and not already apparent from the context. Pre-contract information must be provided in clear and plain language, in a legible form (if in writing) or in a way that is audible and comprehensible (if given orally) (section 272, subsection (8)). If the full pre-contract information is not provided in a "durable medium" before the contract is concluded, it must be provided in this format as soon as reasonably practicable afterwards (section 257, subsection (9))). (Note that where a contract is entered into "in person," both the key and full pre-contract information must be given in writing and on a durable medium before the contract is entered (section 256, subsection (3), paragraph (c) and section 256, subsection (4)).
Subsection (1), paragraph (a) requires that before a trader enters a subscription contract the trader to give the key pre-contract information to the consumer, and paragraph (b) specifies that the full pre-contract information (set out in Part 2 of Schedule 23) must be given or made available to the consumer. There are no specific requirements as to how information is made available, as it will depend on the context and the individual product, however subsection (6) indicates that the test will be satisfied only if the consumer can reasonably be expected to know how to access the information and be able to access it. Information is unlikely to be "made available" if it is not clearly and prominently signposted or if it is obscured in some way either physically, or by being buried within lengthy documents. This may also constitute a misleading action or omission pursuant to Chapter 1 of this Part.
Subsection 2, paragraph (a) specifies that the pre-contract information (set out in parts 1 and 2 of Schedule 23) must be provided by the trader to the consumer as close in time to the consumer entering the contract as is practicable. This means immediately before the consumer places their order and/or enters into the contract (whichever is the earlier) where possible. This applies no matter where the subscription contract is entered into (i.e. it applies to contracts concluded online, over the telephone, face-to-face or any other way). How this might look in practice might vary depending on the type of contract and the consumer journey. The key difference is whether a consumer can see and read the pre-contract information because it is presented on a durable medium or otherwise in writing (i.e. online on the trader’s website, paper) or not (i.e. telephone).
Paragraphs (b) and (c) of subsection (2) also require that the requirements on providing pre-contract information must be carried out in accordance with subsections (3) and (4) of section 256 and any other requirements set out in regulations under section 277 subsection (1) paragraph (a).
For a subscription contract entered into face-to-face at a business premises, the consumer’s home or elsewhere, the pre-contract information must be given to the consumer in writing (and on a durable medium), so they have an opportunity to review it prior to entering into the contract. Similarly, for an online contract, the key pre-contract information must be given to a consumer in writing before the contract is entered and the full pre-contract information must also be accessible. Where a subscription contract is to be entered into in the course of a phone call, the consumer will be relying on the verbal information communicated by the trader or his agent. In those circumstances, the key pre-contract information must be relayed orally to the consumer, and the trader must still make available the full pre-contract information before the contract is made, so that the consumer is able to consider it before going ahead with the contract.
Subsection 3, paragraph (a) requires the key pre-contract information to be given together, as one whole set of information.
Subsection 3, paragraph (b) requires the key pre-contract information to be given separately and distinctly from the full pre-contract information and from any other information that might relate to the product. The purpose of this requirement is to prevent the key pre-contract information being obscured or reducing its prominence.
Generally, how traders comply with the various requirements in this section will depend on the product and the medium used to conclude contracts with consumers and communicate the prescribed information, but it should mean:
1. in the case of online contracts, key pre-contract information is clearly and prominently visible in the location where the consumer will enter into the contract and is directly accessible without a need for the consumer to take any further steps to access and read it;
2. the key pre-contract information is provided first, prominently and separate from the full pre-contract information;
3. the pre-contract information should not be obscured by the addition of other information which may compete for the consumer’s attention;
4. all the pre-contract information should be easily understood by the average consumer; and
5. all the pre-contract information should be presented in such a way as to come to the consumer’s attention so as to enable the consumer to easily identify and read the information; in an appropriate font, size, colour and position.
Subsection (3), paragraph (c) requires that where the contract is entered into in the simultaneous presence of the trader and the consumer, the key pre-contract information must be provided in writing and on a durable medium. In respect of durable medium that means a format (such as paper or email) which allows information to be addressed personally to the consumer and allows a consumer to easily store under their control and refer to if needed (see section 280 for the definition of durable medium). However, that does not mean the onus should be on a consumer to save a web page or print off a copy for their records. A mere provision of information on a website does not constitute durable medium.
Specific conditions relating to whether information provided via a website will qualify as durable medium include:
1. whether the website allows the consumer to store information addressed to her/him personally in such a way that s/he may access it and reproduce it unchanged for an adequate period, without any unilateral modification of its content by the service provider or by another trader being possible; and
2. if the consumer is obliged to consult that website in order to become aware of the information, the transmission of that information must be accompanied by behaviour on the part of the provider aimed at drawing the consumer’s attention to the existence and availability of that information on that website.
Subsection (3), paragraph (d) means that during the process towards completing the online purchase the consumer should see the written key pre-contract information at least once and is not required to take any further action, such as click on links or download separate documents, to access the information. To comply with the requirements, it should not be possible for the consumer to navigate e.g. a website ordering process, without seeing all of the key pre-contract information prior to being able to complete a purchase.
In the situation covered by subsection (3) paragraph (e) where it is not possible to provide the key pre-contract information in writing prior to the point of purchase, it must be relayed orally to the consumer. Where the information provided is spoken rather than written, it must be audible, clear and spoken at a pace that enables the consumer to fully understand all the information provided. The trader must still make available the full pre-contract information before the contract is made. One way the trader could do this is to refer the consumer to a webpage, or written document previously sent to the consumer, where the full pre-contract information is set out.
Subsection (4) provides that the full pre-contract information must be made available or given together; the consumer should be able to view that information in one place. However, this duty only applies to the additional information set out in paragraphs 14 to 28 of Schedule 23 when this information is applicable to contract and not already apparent from the context (subsection (5)). The requirements for the information to be given in writing and on a durable medium for contracts entered into in person under subsection (4), paragraph (b) are the same as those under subsection (3), paragraph (c).
The Secretary of State may by regulations amend Parts 1 and 2 of Schedule 23 so as to add, modify or remove descriptions of information. Subsection (9) provides that regulations made under this subsection (8) are subject to the draft affirmative procedure.

Schedule 23: Pre-contract information and reminder notices

Part 1 of the Schedule sets out the key pre-contract information which is required to be given to consumers under section 256, subsection (1), paragraph (a).
Paragraph 2 applies where the proposed contract falls within section 254, subsection (2) of the definition of subscription contract, and specifies that the consumer must be notified of the on-going obligation to pay unless steps are taken to end the contract and the minimum commitment period e.g. "you have subscribed for a minimum of 6 months, you may end your contract any time after [insert /day/month/year]"
Paragraph 3 applies where the proposed contract falls within section 254, subsection (3) of the definition of subscription contract, and specifies that the consumer must be notified that they will be charged, or charged a higher rate than the initial one, and the date on which the consumer will become liable for the first charge, or first higher charge.
Paragraph 4 refers to how often payments will be taken, e.g. monthly, weekly annually etc. as well as the amount that will be taken, or the minimum amount if the payment is variable. For certain contracts it may not be possible to specify the amount of the payments, for example, where the consumer is liable for a minimum payment under the contract but the actual amount payable each payment period will be calculated according to the consumer’s usage or choice of product for that period. In such cases it will be necessary to provide the consumer with information on how the price will be calculated. Any term of a consumer contract that allows for a price to be varied during the course of the contract must comply with the requirement of fairness in Part 2 of the Consumer Rights Act 2015.
Paragraph 5 is intended as a clarifying measure to enable consumers to compare prices. If contracts are not paid for monthly, consumers should be provided with a "pro-rata" cost per month. This requirement does not apply to contracts which are paid for monthly.
Paragraph 6 requires the trader to state the minimum total amount for which a consumer will be liable under the contract.
Paragraph 7 requires the trader to outline particulars of any terms within the contract that allow the trader to vary the frequency or amount of payments under the contract.
Paragraph 8 requires the trader to outline how the consumer can exit the contract and signpost to the location online or provide the necessary contact details to enable the consumer to do so.
Paragraph 9 requires the trader to state the amount of notice that the consumer must give to bring the contract to an end.
Paragraph 10 requires the trader to specify when a reminder notice will be sent to consumers in accordance with section 259 subsection (3).
Paragraph 11 requires traders to provide a summary of the consumer’s right to cancel the contract within the initial cooling-off period, and a summary of any right the consumer might have to cancel the contract within a renewal cooling-off period. The trader must also state that further details about the rights are set out in the full pre-contract information.
Part 2 of the Schedule sets out the full pre-contract information which a trader is required to give consumers under section 256, subsection (1), paragraph (b). Paragraph 13 of Schedule 23 provides that that this includes the key pre-contract information that was already required to be provided under Part 1 of Schedule 23. The requirements in addition to this are broadly the same as those requirements under schedule 2 of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 that are not already reflected in the key pre-contract information specified in Part 1 of the Schedule.
Paragraph 14 requires the trader to describe what the product is and to give as much information as is appropriate to the means of communication.
Paragraph 15 requires the trader to set out their identity and the identity of any other person the trader is acting on behalf of. In this context, ‘identity’ means the name of the trader, and if different, the name under which the trader trades.
Paragraph 16 requires the trader to provide their business address and any email address and telephone number. If the service address of the trader (the address at which the person will accept service of documents) is different to the business address, the trader must additionally provide this address.
Paragraph 17 requires the trader to provide the business address, email address and telephone number of persons on whose behalf the trader is acting (if that person has such addresses or phone number.) If the service address of that person is different to the business address, the trader must additionally provide this address.
Paragraph 18 requires the trader to specify all additional delivery charges and any other costs (if those charges cannot reasonably be calculated in advance, the trader is required to specify that such additional charges may be payable) which is inclusive of tax.
Paragraph 19 requires the trader to provide information regarding the payment, delivery and performance of the good, service or digital content, including the time which the trader undertakes delivery of these products.
Paragraph 20 requires the trader to provide details of their complaint handling policy.
Paragraphs 21 and 22 require the trader to provide information about the consumer’s right to cancel during the initial and renewal cooling off period. This includes information such as when these periods begin and end, how a consumer may exercise their right to cancel during these periods, the circumstances under which the consumer may lose their right to cancel and any consequences that arise as a result of the consumer exercising their right, such as refund entitlements.
Paragraph 23 requires the trader to provide the consumer with a reminder of the statutory rights of the consumer under Part 1 of the Consumer Rights Act 2015.
Paragraph 24 requires the trader to provide information about the existence and conditions of after-sale customer assistance, after-sales and commercial guarantees.
Paragraph 25 requires the trader to provide information on the existence of relevant code of conduct and how to obtain a copy.
Paragraph 26 require the trader to provide information on the existence and conditions of deposits or other financial guarantees that may be requested by the trader and paid or provided by the consumer.
Paragraph 27 requires the trader to provide information on digital content functionality and compatibility. This might cover information such as information about its computer language, file type, access requirements, updates, tracking, internet connection, geographical restrictions, any additional purchases required and information regarding compatibility of the product with both hardware and other software.
Paragraph 28 refers to the existence of any 'alternative dispute resolution' schemes that the trader is subject to and how the consumer may access them.
Part 3 of the Schedule sets out the reminder notice information which a trader is required to give consumers under section 259, subsection (1), paragraph (a).
Paragraph 30 requires the trader to highlight that the consumer will become liable for the renewal payment.
Paragraph 31 requires the trader to provide the date the renewal payment is due and the amount the consumer is liable to pay, in the reminder notice. Paragraph 32 requires the trader to specify the amount of the previous renewal payment (if any) for comparison (see also paragraph 33 if the previous renewal payment is lower that the renewal payment to which the notice relates).
If the consumer will be liable to pay further payments in addition to the renewal payment, if the contract renews, paragraph 34 requires the trader to disclose the amount and the frequency of those additional payments. Paragraph 35 requires the trader to specify the amount of any previous payments equivalent to those mentioned in paragraph 34 (i.e. recurring payments) for which the consumer was liable (i.e. during the current contract period which is due to expire), for comparison.
Paragraphs 33 and 36 require the trader to highlight any differences in the amounts of the renewal payment or the further recurring payments, as between the current contract period which is due to expire, and the renewed contract period in the event the contract were to renew.
Paragraph 37 requires the trader to specify the total minimum amount to which the consumer will become liable under the contract if it renews to a further term.
Paragraph 38 requires the trader to specify the date on which the consumer will become liable for the next following renewal payment (after the forthcoming renewal payment) or, if no further renewal payments will arise under the contract, the date on which the contract will come to an end.
Paragraph 39 requires the trader to specify means by which the consumer can bring the contract to an end to avoid further liability.

Section 257: Pre-contract information: additional requirements

This section outlines requirements in addition to section 256 around pre-contractual information.
Subsection (2) requires that the last step a consumer takes when entering an online contract is one where they expressly acknowledge that by entering into the contract, they will be obligated to make payments to the trader.
Subsection (4) requires traders to provide certain further information when consumers are invited to enter contracts online, namely whether there are any restrictions on the delivery of any goods to be supplied under the contract, and which means of payment can be used by the consumer. Subsection (3) requires that information to be presented in such a way that a consumer should not be required to take any other steps to view it other than going through the contracting process, and in accordance with any other requirements specified in regulations under section 277, subsection (1), paragraph (a).
Subsection (5) specifies that where the trader has not complied with subsection (2), the consumer is not bound by the contract.
Subsection (7) applies to contracts entered into orally and remotely, such as those concluded via a video or phone call. In such cases where the trader contacts the consumer, the trader is required to inform the consumer at the outset of the trader’s identity, the identity of any person on whose behalf the trader is acting, and the commercial purpose of the call.
Where the consumer has signed a contract in the course of entering into it face-to-face with the trader, the trader must give the consumer a copy of the signed contract immediately afterwards (subsection (8)).
If the trader has not given the full pre-contract information to the consumer in writing and on a durable medium before a contract was entered into, subsection (9) requires the trader to provide the information in this format as soon as reasonably practicable after the contract has been entered into. This must always be before any goods or services are supplied under the contract.

Section 258: Reminder notices

This section along with section 259 details requirements for "reminder notices". Reminder notices are written notifications to consumers that a subscription contract is continuing and a renewal payment will fall due unless they act to end the contract. These notifications must contain the information prescribed in Schedule 22, Part 3. The notice is designed to inform the consumer in simple terms of certain important information including the cost and features of the contract that is about to renew and the actions the consumer should take should s/he wish to avoid renewal. The notice can be given alongside other information e.g. marketing material, but the prescribed information set out in section 259 subsection (1) must be more prominent than any other information given to the consumer at the same time.
Subsection (1) provides that, where a trader enters into a subscription contract with a consumer without a concessionary period, the trader must give the consumer a reminder notice before each renewal payment that relates to the end of a relevant six-month period, as set out in subsection (2). "Renewal payments" are payments which can be avoided by a consumer where they exercise their existing rights under the contract to end the contract (subsection (7)). A payment cannot be "avoided" for the purposes of this section by the use of any early termination clause of the contract that involves the consumer paying a fee, or which involves the consumer breaching the contract.
Subsection (2) sets out what is considered a relevant six-month period for the purposes of subsection (1). It sets out that the relevant six-month period is considered to be 6 months, which begins on the day after the contract was entered into. Each subsequent six-month period is determined by each six-month period after the day the consumer became liable for a renewal payment in which a reminder notice was required to be sent under subsection (1).
Subsection (3) provides that, where a trader enters into a subscription with a consumer with a concessionary period, the trader must send the consumer a reminder notice before the first renewal payment the consumer is liable for under the contract, and each subsequent payment that related to the end of a relevant six- month period. A contract is considered to include a concessionary period if it meets the requirements set out in section 254, subsection (3).
A renewal payment will fall within subsection (5) and therefore trigger a reminder notice where it is the last (or only) renewal payment falling due within a relevant six-month period, or (where the consumer does not become liable for any renewal period during that period) the very first renewal payment after that relevant six-month period. The purpose of this provision is that a reminder notice is not required to be given more frequently than once every six months even if renewal payments fall due more frequently than this.
Subsection (7) defines a renewal payment as a payment which a consumer could avoid liability for, by exercising their right to bring the contract to an end.
Subsection (8) provides that the reminder notices requirements are subject to requirements on content, timing and how notices must be given under section 259.
Subsection (9) provides the Secretary of State with the power to disapply or modify the application reminder notice requirements in sections 258 and 259 in respect of certain traders or contracts types.
Subsection (10) provides that any regulations made under subsection (9) are subject to the affirmative procedure.

Section 259: Content and timing etc. of reminder notices

This section defines the requirements a trader must follow as to timing and content of a reminder notice and how the notice must be given.
Subsection (1) requires that the information prescribed in Part 3 of Schedule 23 must be included in a reminder notice together with any other information required by regulations under section 277, subsection (1), paragraph (b). The information must be given all together.
Subsection (2) provides that a reminder notice must be given in such a way that the prescribed information (as set out in section 259, subsection (1)) is more prominent than any other information given to the consumer at the same time. It also provides that reminder notices must be given in accordance with any other requirements prescribed in regulations under section 277, subsection (1), paragraph (a) additional to those requirements set out in subsections (3) to (7).
The purpose of the reminder notice is to give the consumer sufficient notice to decide if they still want the contract to continue, and if necessary, cancel their contract before the renewal payment is incurred. Subsection (3) sets out that a trader must specify the period in which consumers will receive a reminder notice in the pre-contract information they provide to the consumer.
Subsection (4) specifies that the reminder notice period set out in the pre-contract information must be reasonably in advance of "the last cancellation date". This period must be reasonable for the purposes of informing the consumer that they will soon be liable for a renewal payment. This period must also be reasonable for the purposes of enabling the consumer to take the necessary steps before incurring liability for the next renewal payment.
Subsection (5) defines the last cancellation date. This is the last day on which the consumer can exercise a right to bring the contract to an end and thereby avoid liability for the renewal payment.
Subsection (7) specifies where the trader is required to serve an additional reminder under subsection (6). Subsection (6) applies where the next following renewal payment that the consumer could avoid by ending the contract would be a year or more after the forthcoming renewal payment. (Or if no further renewal payments would arise under the contract, the contract would continue for at least a year after the forthcoming renewal payment.) The effect of these provisions is that for subscription contracts that will renew to a period of 12 months or more, a trader must give an additional reminder notice prior to the notice set out in subsection (3). This additional reminder notice must be sent prior to the notice set out in subsection (3) and at a time which is reasonable for the purposes of providing additional notification to the consumer that they will soon become liable for a renewal payment.
Subsection (8) defines a "12-month period" for the purposes of the provision in subsection (7) triggering a trader’s duty to serve an additional reminder.

Section 260: Arrangements for consumers to exercise rights to end contract

This section imposes requirements on traders that are designed to ensure they provide an easy and accessible means for consumers to end the contract. It makes it clear that consumers should not be hindered when trying to leave a subscription contract or stop it renewing.
Subsection (1), paragraph (a) requires that traders enable consumers to end the contract in a way which is straightforward.
Subsection (1), paragraph (b) provides that the process for consumers to end the contract must not require them to take any steps other than those which are reasonably necessary to end the contract. This requirement precludes traders adopting practices which unreasonably hinder a consumer exercising their contractual right to exit the contract.
Examples of practices that are likely to breach subsection (1), paragraphs (a) and/or (b) could include:
1. For online contracts (where consumers have been able to sign up at the click of a button online), making the process to exit the contract more onerous e.g. requiring customers to phone a call centre.
2. When a consumer contacts the trader by phone to end the contract, they are required to answer questions about the quality of the product, or why they’re leaving.
3. Requiring customers to go through an excessive number of steps, or unnecessary steps, to turn off auto-renewal online e.g. requiring them to complete a mandatory free text box or by not giving them the clear and prominent option to turn off auto-renewal or press a cancel button.
Subsection (2) and subsection (6) specify that the consumer may choose to notify a trader that they wish to exercise their contractual right to bring their subscription contract to an end by making a clear statement setting out their decision.
Subsection (3) provides that a consumer may exercise a right to bring a subscription contract to an end at any time permitted by regulations under section 277 subsection (1) paragraph (c), and subsection (5) provides that arrangements under section 260 must comply with any other requirements specified in such regulations.
Subsection (4), paragraph (a) provides that where a contract is entered into online, there must be a way for the consumer to exercise their right to cancel online. It does not prevent other means of doing so also being made available.
Subsection (4) paragraph (b) provides that traders must ensure that consumers do not find it hard to locate and access the mechanism for turning off auto-renewal or ending the contract online. An online mechanism offered by traders for consumers to end a subscription contract may breach this requirement if e.g. it is not clearly and prominently labelled, or it is only accessible by the consumer activating hover text or a drop-down menu.

Section 261: Duties of traders on cancellation or end of subscription contract

This section sets out requirements on the trader where the consumer has exercised a right to cancel under Chapter 2 or taken the necessary steps to end the contract under its contractual terms.
The trader must give the consumer an "end of contract notice". Regardless of the medium used by the consumer to end or cancel the contract, there is a requirement on the trader to acknowledge the cancellation request (once received) in writing on a durable medium and in accordance with any other requirements specified in regulations under section 277 subsection (1) paragraph (a). This must be within the period specified in regulations under section 277, subsection (1), paragraph (a). If no such period is specified in regulations, the notice must be given within three working days after the consumer giving notice of termination, or, where the consumer notifies cancellation online, the trader must give the end of contract notice within 24 hours of cancellation.
The end of contract notice must contain clear information that the contract has been or will be cancelled or ended, together with the date on which this occurred or will occur, together with any other information required by regulations made under section 277 subsection (1) paragraph (b).
Additionally, any overpayment received must be refunded. An overpayment is defined in subsection (6) as being any payment already made by the consumer for which they are no longer liable as a result of the contract termination.

Rights of consumers to cancel contract for breach

Section 262: Terms implied into contracts

This section provides that every subscription contract is deemed to contain terms to the effect that the trader has complied with the statutory obligations imposed by Chapter 2. These are:
1. The requirement to give key pre-contract information (section 256, subjection (1), paragraph (a))
2. The requirement to give full pre-contract information (section 256, subsection (1), paragraph (b))
3. The requirement to give a reminder notice (section 258)
4. The requirement to specify a reasonable period for giving reminder notices in the key pre-contract information (section 259, subsection (4))
5. The requirement to enable a consumer to easily bring a subscription to an end (section 260, subsection (1))
6. The requirement to acknowledge a consumer having brought the subscription contract to an end, or cancelled it under this Chapter, and the requirement to refund any overpayments (section 261, subsection (2)).

Section 263: Right to cancel for breach of implied term

This section provides a cancellation right for consumers for breaches of certain terms in relation to subscription contracts.
Subsection (1) confers the right for a consumer to cancel a contract for a breach of an implied or statutory requirement as set out in section 262, paragraphs (a), (c), (d) and (e).
Subsection (2) provides that, in the event of a breach by the trader, the consumer has cancellation rights.
The breach could be a failure to comply with any part of the requirements outlined in section 262, paragraphs (a), (c), (d) or (e). For example:
1. failure by a trader to give the consumer notice reminding them before the end of a commitment period that the contract will automatically continue, and they will be charged payment unless they take action to end the contract;
2. failure to provide all of the prescribed information in the reminder notice (i.e. non-compliant reminder providing partial information);
3. obscuring the prescribed pre-contract information by including additional information with it which is not prescribed; or
4. failure to comply with the rules relating to timings for reminders.
Subsection (3) provides that all a consumer must do to exercise this right is communicate their decision to cancel to the trader in accordance with subsection (4).
Subsection (4) provides that the consumer may notify a trader that they wish to exercise their right to cancel under subsection (2) by making a clear statement setting out their decision. Even if the trader mandates a specific process for ending the contract in accordance with its terms e.g. that cancellation must be communicated through the trader’s website, cancellation following a breach of terms will be effective if the consumer makes a clear statement to that effect.
Subsection (5) clarifies that the cancellation will take effect from the time the notification is given.
Subsection (6), paragraph (a) provides that any rights and obligations under the contract that would have arisen no longer apply after it is cancelled.
Subsection (6), paragraph (b) provides that following such cancellation, the consumer’s liability for previous payments will be extinguished, and the resulting rights to a refund will apply, to the extent provided for in regulations made under section 267 subsection (1) paragraph (b). Paragraph (c) provides that any other provision made under those regulations about the treatment of any products supplied under a cancelled subscription contract applies.
Subsection (7) means that the trader cannot apply any penalties, or charges on the consumer for cancelling the contract under subsection (2).
Subsection (8) refers to section 267, which gives the Secretary of State the power to make regulations about, inter alia, the exercise of the consumer’s right to cancel a contract including, for example, provisions requiring a cancellation right under this Chapter to be exercised before the end of a specified period (see the explanatory note relating to section 267).

Cooling-off rights

Section 264: Right to cancel during cooling-off periods

Subsection (1) sets out that a consumer has the right to cancel a subscription contract during the initial cooling-off period and any renewal cooling-off period that applies.
Subsection (2) specifies that no restrictions or conditions may be placed on this right, except those specified within the Chapter or regulations made under it.
Subsection (4) has the same meaning as section 260, subsection (6) and section 263, subsection (4).
If the consumer sent the notice of cancellation within the cooling-off period, then they are deemed to have cancelled it within the cooling-off period even if it is not received by the trader until after that period has expired (see section 272, subsections (4) and (5)). However, subsection (5) means that a contract is cancelled with effect from when the notification is given. This might be deemed to be the date when the notification would be normally received according to the means used to send it. For example, where a notification is given by post, it will be deemed to be received as specified under section 7 of the Interpretation Act 1978, specifically, effected at the time at which the letter would be delivered in the ordinary course of post, unless the contrary is proved.
Under subsection (6), cancellation under section 264 will end parties’ obligations under the contract and the consumer will be entitled to any extinguishment of liability or resulting refund to such extent as is prescribed in regulations under section 267 subsection (1) paragraph (b), and the treatment of any goods or other products supplied under the contract will be determined in accordance with provisions in such regulations.

Section 265: Meaning of "initial cooling-off period" and "renewal cooling-off period"

This section outlines the two kinds of "cooling-off period" during which a consumer may exercise a right to cancel under section 264. A "cooling-off period" is a 14-day period where a consumer may cancel their contract for any reason and receive such refund as is prescribed under regulations made under section 267, subject to any deductions that may apply under those regulations.
This section defines what a "cooling-off period" is and explains the distinction between an "initial" cooling-off period and a "renewal" cooling off period.
Subsection (1) describes the initial cooling-off period, which is similar to the cancellation period in The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. It starts from the day the contract is entered into and ends 14 days after the date of the contract, or, in the case of contracts for the supply of goods, the period ends 14 days after the date when the first goods are received.
Subsection (2) describes the renewal cooling-off period, which only applies in the case of a ‘relevant renewal’ of a subscription contract. It provides that the renewal cooling-off period starts on the day of the relevant renewal and ends 14 days beginning with the day after that date.
Subsection (3) indicates that relevant renewals are:
1. The first renewal payment to which a consumer becomes liable following the end of an initial free or discounted period; and
2. Any other renewal payment where:
  1. the next following renewal payment will not be due for 12 months or more, or
  2. no further renewal payments will be payable, but the contract will continue for a period of 12 months or more.
Subsection (4), paragraph (b) defines how the "12-month period" is to be assessed for the purposes of determining whether a renewal is a ‘relevant renewal’.
Subsection (5) clarifies that, to identify when the first supply of goods has taken place for the purposes of determining the commencement of the initial cooling-off period under subsection (1), paragraph (b), subparagraph (i), when that supply consists of multiple goods, the 14-day period would only start to run once all of the goods, which form part of the first supply, are received.
Subsection (6) provides that this section is subject to any extensions of a cooling-off period that may be provided for by regulations under section 267 subsection (1) paragraph (c).

Section 266: Cooling-off notice

This section details the requirement for a trader to give a consumer a "cooling-off notice" in relation to each renewal cooling-off period. "Cooling-off notices" are notifications to consumers that their contract is continuing, and they have a renewal cooling-off cancellation right. These notifications must contain the other information prescribed in subsection (2) and any other information prescribed in regulations under section 277, subsection (1), paragraph (b). The notice is designed to inform the consumer in simple terms of their cooling-off cancellation right.
Subsection (3) specifies that the notice must be given on the first day of the renewal cooling-off period or as soon as reasonably practicable afterwards, separately from the giving of any other information, and in accordance with any requirements in regulations made under section 277, subsection (1), paragraph (a).

Cancellation of contracts under this Chapter: further provisions

Section 267: Cancellation of subscription contract: further provisions

This section provides a delegated power for the Secretary of State to make provision, by regulations, about the exercise of a consumer’s rights to cancel a subscription contract under Part 4 Chapter 2.
Subsection (1) details the scope of the delegated power, specifically empowering the Secretary of State to make provision about the exercise of the rights by the consumer and the consequences which may follow the cancellation. Subsection (1) also empowers the Secretary of State to make regulations extending a cooling-off cancellation period to any extent.
Subsection (2) includes detail that the regulations may require the right to cancel to be exercised before the end of a specified period, and may impose any other conditions or restrictions on the exercise of that right. Subsection (2) also clarifies that the power set out in subsection (1), paragraph (a) can be used to make regulation to provide that a consumer may lose the right to cancel their subscription contract during a cooling off period, particularly if they choose to receive digital content or services under the contract during the cooling-off period.
Subsection (3) includes further details on what regulations may be made by the Secretary of State. This covers matters such as the extinguishment of the consumer’s liability for previous payments required under the contract, and the resulting right to a refund where such payments have already been made as well as the trader’s right to recover products that have already been supplied under the contract. Subsection (4) provides that regulations made under subsection (1), paragraph (b) can be used to remove or reduce the refund that a consumer is entitled to if they cancel their subscription contract during a cooling period, for example if they have received digital content or services under the contract.
Subsection (3) also allows for provision to be made setting out the consequences, firstly, where a consumer ends a contract under its terms in circumstances where s/he has one or more rights to cancel the contract under this Chapter, and secondly, where a consumer cancels a contract in circumstances where s/he has more than one cancellation right under this Chapter.
Subsection (5) requires that the Secretary of State’s power to make regulations setting out consequences of a consumer cancelling a contract when they have more than one cancellation right under Part 4 Chapter 2 (subsection (3), paragraph (e), subparagraph (ii)) must be exercised such that the consumer should be deemed to be exercising the most advantageous right available to them under Chapter 2. This means that the regulations must have the effect that where there is any overlap in such rights, the most advantageous rights must prevail. Specifics on what that could mean may be included in the regulations.
Subsection (6) imposes a duty on the Secretary of State to consult relevant persons prior to making any regulations under subsection (1), paragraph (c) (provision extending a cooling-off period).
Subsection (7) specifies that the first regulations made under this section, or any regulations made that include provision within subsection (1), paragraph (c) are subject to the draft affirmative procedure.
Subsection (8) specifies that regulations which are made under this section but where subsection (7) does not apply are subject to the negative procedure.

Offence of failing to provide information about cooling-off rights

Section 268: Offence of failing to provide information about initial cooling-off rights

This section creates an offence where a trader fails to provide the relevant information listed in paragraph 11, subparagraph (a) or paragraph 21 of Schedule 23 (information on a consumer’s initial cooling-off cancellation rights) in a manner compliant with section 256, subsection (1), paragraph (a) or (b) (as the case may be), before entering into an off-premises subscription contract. These paragraphs of Schedule 23 include information on when the consumer’s initial cooling off right will begin and end, how it can be exercised and the consequences of exercising the right. The offences reproduce offences that currently apply under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
Subsection (5) defines what an "off-premises subscription contract" is. Examples would include contracts concluded by door-to-door sellers and by traders using temporary high-street stands.
Subsection (6) defines "business premises".

Section 269: Defence of due diligence

This section provides traders with a defence of due diligence to the offence specified in section 268 where the trader can prove that another person was responsible for the offence and the trader took all reasonable precautions and exercised all due diligence to avoid committing the offence.

Section 270: Offences by officers of a body corporate etc

This section establishes direct liability for company officers for offences committed by the body corporate.
Subsection (1) specifies that the officer is liable if the offence was committed with their consent, connivance or due to their neglect.
Subsection (2) defines what an officer of the body corporate includes. This is not an exhaustive list.
Subsection (3) establishes that subsection (1) applies to body corporates which are managed by its members. Members of these body corporates with functions of management may therefore be found liable for an offence under this Chapter.
Subsection (4) establishes the same principles as subsection (1), but for Scottish Partnerships in relation to individual partners.
Subsection (5) specifies that a partner includes those which may not be legally partners of the organisation but purporting to act as one.

Section 271: Penalty for offence and enforcement

Subsection (1) specifies that a person convicted of a section 268 offence is liable on summary conviction to a fine. Subsections (2) to (6) provide for enforcement by local weights and measures authorities in Great Britain, and the Department for the Economy in Northern Ireland.

General and miscellaneous provisions

Section 272: Information and notices: timing and burden of proof

This section specifies the timing and burden of proof for information and notices that are given (or required to be given) under Part 4 Chapter 2.
Subsection (1) specifies that this section applies in relation to the entire chapter relating to subscription contracts.
Subsection (2) specifies that for electronic communication of notices or information sent by a trader to a consumer, delivery timing is deemed as instantaneous.
Subsection (3) clarifies that subsection (2) applies even if the consumer does not receive the notice if that was due to a reason beyond the trader’s control.
Subsection (4) provides that subsection (5) applies to determine whether the consumer has effectively exercised their statutory cancellation rights conferred by this Chapter, or their contractual rights to end the contract, by having given notice within the specified period or by the relevant date.
Subsection (5) provides that the consumer is to be treated as having given notice within the required period, or before the specified date, if the communication by which the notice is given is sent before the end of that period.
Subsection (6) specifies that the burden of proof is on the trader in any dispute between the trader and a consumer as to whether any information or notice has been given to the consumer by the trader in accordance with this Chapter.
Subsection (7) specifies that the burden of proof is on the consumer in any dispute between the consumer and a trader regarding whether a notice to end a contract or cancel it under this Chapter was notified by the consumer to the trader in accordance with the requirements of this Chapter.
Subsection (8) requires that any information that a trader gives to a consumer under this Chapter must be given in clear and plain language and must be legible if in writing, and audible and comprehensible, if given orally.

Section 273: Terms of a subscription contract which are of no effect

Subsection (1) means that any term in a contract which contravenes this Chapter has no legal effect to that extent, including any term that seeks to exclude or restrict a trader’s liability arising from the terms implied into the contract by section 262.
Subsection (2) provides that in cases to which this subsection applies, any term of a subscription contract has no effect to the extent that it makes consumers liable for a renewal payment prior to the day the contract renews.
Subsection (3) provides that subsection (2) applies in such cases as are specified in regulations made under section 277, subsection (1), paragraph (e) and that the regulations may include provision for determining when a contract renews in each category of case.

Section 274: Other remedies for breach by trader

This section clarifies that any rights the consumer may have under common law or statute for breach of any term of a subscription contract are not limited by any rights specified in this Chapter and the consumer may exercise both kinds of right in combination, as long as the consumer does not recover twice for the same loss.
Subsection (3) provides examples of what other such remedies may be available to the consumer.

Section 275: Application of this Chapter

This section specifies that if a consumer and trader choose the law of any other country to govern their contract, but the contract has a close connection to the UK, this chapter will apply.
Subsection (3) provides that Chapter 2 does not apply to contracts entered into before section 254 comes into force.
Subsection (4) sets out that subsection (5) and (6) provide how the Chapter applies to a contract that was once an excluded contract to the Chapter but subsequently ceases to be.
Subsection (5) to (8) modify the application of the Chapter to these contracts and modify duties on traders that have entered into a contract that was once an excluded contract but subsequently ceases to be.
Subsection (5), paragraph (a) disapplies the requirement for traders to have to send ‘key’ and ‘full’ pre-contract information to consumers in line with sections 256 and 257. Instead, traders must send this information in line with subsections (6), (7) and (8). Failure to provide this information in line with subsections (6) to (8) would be considered a breach of an implied term (see subsection (5), paragraph (d) for the modifications to the implied terms provisions at section 262).
Subsection (5), paragraph (b) disapplies the requirement for a trader to send a reminder notice during a concessionary period. Instead, a trader must follow all other reminder notice obligations beginning with the ‘relevant day’. The ‘relevant day’ would be the day the contract ceases to be an excluded contract.
Subsection (5), paragraph (e) disapplies the consumer’s right to cancel a subscription during the initial cooling -off period.
Subsection (6) requires a trader to give ‘key’ and ‘full’ pre-contract information, in line with Schedule 23, and subject to the modifications in subsection (7), within a reasonable period of the ‘relevant day’ (when the contract ceases to be an excluded contract), and in any case within 12 months from that day.
Subsection (7) removes the requirement for traders to give information related to the initial cooling off period or information relating to a concessionary period if the concessionary period has ended before the contract ceased to be an excluded contract.
Subsection (8) clarifies that the information requirements set out in subsection (6) apply regardless of whether any of this information has been given to a consumer before the contract ceased to be excluded.

Section 276: Crown Application

This section specifies that the Crown is bound by the provisions in this chapter, however, may not be criminally liable as a result.

Section 277: Power to make further provision in connection with this Chapter

This section gives a delegated power to the Secretary of State to make regulations, which are subject to the negative procedure, in relation to:
1. how and when information or a notice required to be given by traders to consumers under Chapter 2 may or must be given,
2. what information notices given under Chapter 2 must contain,
3. what arrangements a trader must make under section 260 to enable consumers to end contracts, and about when a consumer may exercise such a right. This may include provision restricting the period of notice that a trader may require a consumer to give to bring a subscription contract to an end;
4. specifying the period within which a trader must refund an overpayment under section 261, subsection (2), paragraph (b),
5. specifying cases to which section 273, subsection (2) will apply and making provision about the date when a contract renews for that purpose.

Consequential amendments

Section 278: Consequential amendments to the Consumer Rights Act 2015

This section makes consequential amendments to sections 11, 12, 36, 37 and 50 of the Consumer Rights Act 2015 and to paragraph 10 of Schedule 5 to that Act.
The amendments ensure that information that is given to consumers as part of the pre-contract information required under Part 4 Chapter 2 is treated as a term of the contract. This has the effect that traders cannot make changes to the matters covered by this pre-contract information without the agreement of the consumer, and if the trader breaches any such term, the consumer remedies provided for in Part 1 of the Consumer Rights Act will apply.
The amendment to paragraph 10 of Schedule 5 to the 2015 Act secures that the investigatory powers set out in that Schedule are available to domestic enforcers for the purposes of enforcing the offences in subsection (1) of section 268.

Section 279: Other consequential amendments

This section makes further consequential amendments to other legislation including amending the Enterprise Act 2002. This will ensure that information which comes to a public authority in connection with the exercise of any function it has under, or by virtue of, Chapter 2 Part 4 of the Act. It also permits disclosure of that information to any other person for the purpose of facilitating the exercise by that person, of any function they have under or by virtue of Chapter 2 Part 4.
In addition, this section amends the Consumer Contracts (Information Cancellation and Additional Charges) Regulations 2013 to remove subscription contracts as defined by section 254 from the scope of Part 2 of those Regulations on information requirements, and Part 3 of those Regulations on rights to cancel.

General interpretation

Section 280: Interpretation

This section defines certain terms and phrases in the subscription contracts chapter and explains how certain references should be interpreted.

Section 281: Index of defined expressions

This section is self-explanatory.

Chapter 3: Consumer Savings Schemes

Section 282: Meaning of "consumer savings scheme contract"

This section provides the definition of a "consumer savings scheme contract" which is in scope of the Act. They are contracts in which consumers make payments as a form of saving for goods, services or digital content to be supplied by the trader usually at a later date. They should meet at least one additional criterion outlined in subsections (2) to (4) and they should not be explicitly excluded by virtue of section 284, subsection (1) and Schedule 24.
The policy is to regulate such contracts, in particular to protect consumer payment(s) made to a trader who becomes insolvent before a consumer has been able to redeem their payment(s) for goods, services or digital content.
In subsection (1), paragraph (a), sub-paragraph (ii) the words "to an account that is held by the trader for the consumer" ("the consumer’s account")" simply means the trader holds money on the consumer’s behalf.

Section 283: Other defined terms

This section defines terms used in Chapter 3. Subsection (2) provides further clarification of the words "consumer account" in section 282, subsection (1), paragraph (a), sub-paragraph (ii).
Subsection (3) defines the term "protected payment" used in section 285, subsection (1) and section 286, subsection (2), paragraph (d).

Section 284: Excluded arrangements

This section introduces Schedule 24 which sets out arrangements excluded from the scope of a consumer savings scheme contract.
Subsection (2) provides a delegated power for the Secretary of State to add, remove or modify arrangements excluded by Schedule 24, which is subject to the affirmative procedure, see subsection (4).

Schedule 24: Excluded Arrangements

Schedule 24 lists seven arrangements which are excluded from the scope of a consumer savings scheme contract. Excluded arrangements include those in sectors which have their own regulatory regimes e.g. consumer contracts whose subject matter is regulated financial services activity (paragraph (1)), or where the trader is a small business (paragraph (5)).

Section 285: Insolvency protection requirement

The primary purpose of this section is to mitigate the risk of loss to consumers upon the insolvency of a trader offering consumer savings scheme contracts. The section provides that consumer savings schemes must be underpinned by arrangements that will cover, in the event of the trader’s insolvency, the cost of refunding payments made by a consumer which have not been redeemed at the time of insolvency. A trader can choose whether to protect payments by way of a trust arrangement or through insurance cover but cannot choose a mix of both options.
The requirement to protect payments made by consumers to consumer savings scheme contracts is intended to extend to traders who are established outside the United Kingdom and offer such schemes to consumers located in the United Kingdom.
A trader’s insolvency is defined by reference to the trader being subject to insolvency the meaning of which is defined in section 285 subsection (4), paragraphs (a) to (f). This defines insolvency to include a broad range of personal and corporate insolvency events. This approach should provide more certainty for business and consumers alike.

Section 286: Insurance arrangements

This section requires that a trader who intends to comply with the insolvency protection requirement in section 285 by way of an insurance policy (or policies) must ensure that the said policy (or policies) is an "appropriate policy".
Subsection (2) sets out the meaning of an "appropriate policy" and requires a trader to ensure that consumers are insured persons under the policy required under subsection (1), in respect of the costs of refunding payments in the consumer’s account which have not been redeemed at the time of the insolvency.
The meaning of funds which have not been redeemed shall be interpreted such that "redeemed" has the same meaning as in section 283, subsections (4) and (5). The purpose of section 286, subsection (2) is to ensure protected payments are returned directly to the consumer, in the event of the trader’s insolvency.
Subsection (3) requires a trader to pay the costs of arranging and paying for an appropriate policy and any related charges or taxes without recourse to the consumer payments which are to be protected under that policy.

Section 287: Trust arrangements

This section requires a trader who intends to comply with the insolvency protection requirement in section 285 by using a trust arrangement to ensure consumer payments are held in a trust located in the United Kingdom.
Subsection (2) requires the consumer’s payments to be held in the trust until either the funds have been redeemed by the consumer, or the payments have been returned to the consumer, unless payments can be released for one of the authorised purposes set out in subsection (3) and once the declaration in subsection (4) has been received in respect of a payment under 287, subsection (3), paragraph (a).
Subsection (5) is intended to ensure a level of independent scrutiny of the use of funds held in Trust.
Subsection (6) provides clarification of the meaning of "independent of the trader" specified in subsection (5).
Subsection (7) requires the trader to meet any costs associated with setting up and managing the trust arrangement; consumer payments to the trust cannot be used to pay such costs.
Subsection (8) requires the trader operating a consumer savings scheme to arrange for the trust’s accounts to be audited by an independent auditor every three years.
Subsection (9) requires trustee(s) of a trust set up to receive consumer payments under a consumer savings scheme contract to ensure funds which have not been redeemed at the date of the trader’s insolvency are returned to those consumers. This subsection ensures monies held in trust are returned to consumers in the event of an insolvency, i.e. treated separately from other assets of the business.

Section 288: Information requirements

This section sets out information to be provided to the consumer by the trader once the consumer has joined a consumer savings scheme, the time for providing that information and the manner of its provision.
Subsection (1) sets out the information a trader must provide to a consumer when using an insurance or trust arrangement to protect consumer funds. The trader is required to provide the information to the consumer within 30 working days of the consumer’s first payment into the consumer savings scheme.
Subsection (2) sets out the information a trader must provide where there is a change to the information in subsection (1) and the time within which the consumer should be notified.
Subsection (3) makes provision for a consumer to request the information in subsection (1) and for the trader to provide the information for free within 30 working days of receiving the request.
Subsections (4) to (6) set out how the information should be provided to the consumer; it takes into account the way the consumer savings scheme contract was entered into.
Subsection (7) mirrors section 285, subsection (3) - in other words, the information requirements apply to traders established outside the UK who operate consumer savings schemes in the UK.
Subsection (8) makes it an implied term of contract that the trader operating a consumer savings scheme comply with the information requirements set out in this section.
Subsection (9) sets out that, in addition, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 will apply to consumer savings schemes insofar as obligations under those regulations are not met by the trader complying with the information requirements in this section.

Section 289: Consequential amendments

This section adds Chapter 3 of Part 4 to the list of enactments listed in Schedule 3 of the Regulatory Enforcement and Sanctions Act 2008 and listed in Schedules 14 and 15 of the Enterprise Act 2002.

Section 290: Interpretation

This section defines key terms for the purposes of Chapter 3 of Part 4. There are terms which are given a narrower meaning for the purposes of Chapter 3 of Part 4 as compared to their corresponding meaning in Part 3. For example, the definition of a trader in Chapter 3 of Part 4 does not include the activities of any Government department or local or public authority.

Chapter 4: Alternative dispute resolution for consumer contract disputes

Interpretation of Chapter 4

Section 291: Meaning of "ADR" and related terms

This section defines ADR and related terms.
Subsections (2) to (5) define "ADR". This includes, but is not limited to, mediation, arbitration, early neutral evaluation and action under an ombudsman scheme. These examples are taken from the Practice Direction on pre-action conduct and protocols of the Civil Procedure Rules. In relation to the reference to arbitration in subsection (4)(b) and to resolutions which are binding on the consumer in subsection (5)(a), nothing in this Chapter is intended to qualify sections 89-91 of the Arbitration Act 1996 and the unfair terms provisions of Part 2 of the Consumer Rights Act 2015 in relation to the use of such forms of ADR in a consumer context.
Subsection (6) defines an "ADR provider" as a person who carries out ADR in relation to a consumer contract dispute (see section 292) or who makes special ADR arrangements for doing so.
Subsections (7) and (8) define "special ADR arrangements" as arrangements made by an ADR provider for ADR to be carried out by another person. Special ADR arrangements are explained in more detail in the context of section 293.
Subsection (9) provides a signpost to section 295 which sets out the definitions of "exempt ADR provider" and "exempt redress scheme" and identifies who are exempt ADR providers for the purposes of Chapter 4. Subsection (10) defines "accredited ADR provider", and subsection (11) defines "judge" for the purpose of the section.

Section 292: Other definitions

This section lists additional definitions in relation to consumer contract disputes.
Subsection (2) to (7) defines a "consumer contract". Subsection (2) provides that a consumer contract is a contract to which Part 1 (consumer contracts for goods, digital content and services) of the Consumer Rights Act 2015 applies (with the modifications in subsection (7)). Under subsections (3) to (6), those contracts are taken to include arrangements for the supply to consumers of electricity, gas and water, whatever their volume or quantity, and the provision of heating, cooling or hot water from a heat network.
Subsections (8) to (10) allow the Secretary of State, by regulations, to provide that contracts of a description specified in those regulations are not consumer contracts for the purposes of Chapter 4. Regulations made under these subsections will be subject to the affirmative parliamentary procedure.
Subsections (11) to (13) define a "consumer contract dispute". Consumer contract disputes relate not only to the contract but also to its making and the performance of obligations under the contract. Accordingly, the subject matter of the dispute may extend beyond the matters dealt with in Part 1 of the Consumer Rights Act 2015: for instance, the dispute might relate to a misleading action which the consumer contends was a significant factor in their decision to enter the consumer contract in question. The dispute must be one that may be determined by a court or tribunal: the requirements of Chapter 4 do not apply to more general complaints made by a consumer in so far as they relate to non-justiciable subject matter.
Subsection (14) provides that some other terms are to be interpreted in accordance with the Consumer Rights Act 2015 but with modification in relation to the term "consumer".

Prohibition on acting as ADR provider without accreditation etc

Section 293: Prohibitions relating to acting as ADR provider

Subsection (1) prohibits a person from carrying out ADR in relation to a consumer contract dispute unless (and to the extent that) that person is accredited, exempt (see section 295) or is acting in pursuance of special ADR arrangements made by an accredited or exempt ADR provider.
Subsection (2) prohibits a person from making special ADR arrangements unless that person’s accreditation or exemption allows them to make special ADR arrangements.
Special ADR arrangements are arrangements made by an ADR provider with another person to carry out ADR on that ADR provider’s behalf. They are designed to cover ADR schemes under which the ADR is provided through persons who might, for instance, be styled as "case handlers", "adjudicators" or "ombudsmen" who are employed, or engaged by, or on behalf of, an ADR provider running the scheme. In that case, the person carrying out the ADR would not need accreditation, so long as the ADR provider running the scheme is accredited or exempt and is permitted to make those arrangements.

Section 294: Prohibitions relating to charging fees to consumers

This section restricts the fees that ADR providers may charge consumers.
Subsections (1) and (2) prohibit accredited ADR providers, whether they provide the ADR themselves or through another person under special ADR arrangements, from charging the consumer fees for the ADR, unless those fees are charged in accordance with provisions approved by the Secretary of State. Any fees charged must be clearly published in a way that will come to the attention of consumers.
The objective of subsections (1) and (2) is to ensure that accredited ADR providers do not charge consumers excessive fees for their ADR services, and for there to be consistency and transparency about those fees.
Subsection (3) prevents a person who is carrying out ADR under a special ADR arrangement made by another ADR provider – whether the ADR provider making the arrangement is an accredited or exempt ADR provider – from charging the consumer any fee. This is to prevent a situation in which a consumer is charged twice, by the ADR provider making the special ADR arrangement and then by the person carrying out the ADR under it.
In this section, the "consumer" is meant as the person who is the consumer in the consumer contract dispute in question. There is no restriction on the fees that an accredited ADR provider, or person acting under special ADR arrangements, may charge the person who is the trader in that dispute.

Exempt ADR providers

Section 295: Exempt ADR providers

This section provides for exempt ADR providers for the purposes of section 293.
Under subsection (1), a person is an "exempt ADR provider" if they are listed, or of a description listed, in Part 1 of Schedule 25 or are acting under, or for the purposes of, one of the "exempt redress schemes" listed or described in Part 2 of that Schedule.
Subsections (2) to (7) allow the Secretary of State, by regulations, to amend Schedule 25 to add new exemptions, or to vary or remove existing ones. This will allow the exemptions to be kept under review and for possible additional exemptions in the future. Regulations made under these subsections will be subject to the negative parliamentary procedure.
Under subsection (3), the regulations may limit the scope of an exemption, for example by reference to the purposes for which an otherwise prohibited activity is carried out.
In accordance with subsection (5), the exemptions in Schedule 25 are of general application unless the Schedule provides for an exemption to be more limited.

Schedule 25: Exempt ADR providers

Part 1 of Schedule 25 lists persons, or descriptions of persons, which (so far as those persons provide ADR for consumer contract disputes) are exempt ADR providers for the purposes of Chapter 4. These are statutory bodies, or persons performing statutory functions, which it is not considered appropriate to regulate.
Part 2 of the Schedule lists redress schemes or similar arrangements that are to be "exempt redress schemes" for the purposes of Chapter 4. These redress schemes are regulated under other legislation and the exemption avoids duplication or conflict between the relevant statutory regimes.
Part 3 specifies in further detail the redress scheme to which Part 2 of the Schedule applies.

Accreditation: procedure etc

Section 296: Applications for accreditation or variation of accreditation

This section sets out requirements for applicants seeking accreditation or to vary their accreditation.
Subsection (1) requires applications for accreditation to be made to the Secretary of State and applicants to pay any applicable application fee as set out by ADR fees regulations (see section 300).
Subsections (2) and (3) are self-explanatory.
Subsection (4) allows an accredited ADR provider to apply to the Secretary of State to vary its accreditation. This might involve changes to the ADR that the ADR provider can provide or the special ADR arrangements it can make and changes to any conditions attached to its accreditation. In accordance with subsection (5), the application must be accompanied by any applicable fee set out by ADR fees regulations. An accredited ADR provider may also apply for revocation of their accreditation under section 298(2).
Subsection (6) enables the Secretary of State to determine the application procedures.
By virtue of subsections (7) and (8), this includes: the descriptions of ADR and special ADR arrangements for which limited accreditation may be applied for, which may be framed by reference to kinds of ADR and/or types of dispute; the form in which applications are made; and information applicants must provide.
Subsection (9) requires the Secretary of State to publish any application procedures determined under subsection (6).
Subsection (10) is self-explanatory.

Section 297: Determination of applications for accreditation or variation of accreditation

This section sets out requirements applying to the Secretary of State on receipt of applications for accreditation or for variations of accreditation.
Subsection (1) is self-explanatory.
Subsections (2) to (7) and (13) deal with the determination of applications for accreditation and subsections (8) to (13) deal with the determination of applications for variations.
Subsection (2), paragraphs (a) and (b), requires that the Secretary of State must, as soon as reasonably practicable, consider an application for accreditation and make a decision.
Subsection (2), paragraph (b), and subsection (3) allow the Secretary of State to: grant the accreditation applied for; grant an accreditation which is more limited in terms of the ADR that the ADR provider is permitted to carry out or the special ADR arrangement the ADR provider is permitted to make; or reject the application.
Subsection (2), paragraph (c), requires the Secretary of State to notify applicants of the decision in writing and to provide reasons for any decision to grant a limited accreditation or reject the application.
Subsection (4) provides that the Secretary of State may impose conditions on an accreditation.
Subsection (5) provides that the Secretary of State can only approve an application for accreditation if the Secretary of State is satisfied that the applicant will meet the accreditation criteria set out in Schedule 25 after the accreditation is granted.
Subsection (6) provides that, as a default, an accreditation is not time limited, but the Secretary of State may grant accreditation on a time limited basis. If the accreditation is time limited, the notice of decision must say so and specify the period of the accreditation.
Subsection (7) is self-explanatory.
Subsections (8) to (12), relating to the determination of applications for variations of accreditation, largely reflect subsections (2) to (7) with appropriate modification.
Subsection (13) requires that the notice of the decision to accredit or vary the accreditation of an ADR provider must set out any conditions applicable to the accreditation or its variation and provide reasons for them.
Subsection (14) enables an accreditation to be subject to conditions which make the ADR provider responsible for the acts or omissions of persons carrying out ADR under special ADR arrangements made by that ADR provider. This is to ensure that enforcement action under section 298 or 302 can be taken against the accredited ADR provider in relation to acts or omissions of that person.

Section 298: Revocation or suspension of accreditations etc

This section enables the Secretary of State to revoke or suspend accreditation, limit the accreditation or impose further accreditation conditions. These powers are exercisable by notice.
Subsection (1) is self-explanatory.
Subsection (2) enables ADR providers to apply to have their accreditation revoked.
Subsections (3) and (4) deal with circumstances in which the Secretary of State may exercise the powers in this section as a sanction.
Subsection (3) sets out the grounds on which those sanctions may be applied. Those grounds are: contravention of the prohibitions in sections 293 (carrying out ADR, or making special ADR arrangements, where the ADR provider is not permitted to do so) or 294 (charging fees where the ADR provider is not permitted to do so); failure to comply with the accreditation criteria (see section 301); failure to comply with any conditions imposed on the ADR provider’s accreditation; and failure to comply with an enforcement notice (see section 302).
Subsection (4) sets out the sanctions. The Secretary of State can vary an ADR provider’s accreditation by either limiting it to certain types of ADR or special ADR arrangements, imposing new conditions (or varying or removing existing conditions), or both. The Secretary of State may suspend or revoke the accreditation. Subsection (5) clarifies that the limiting of accreditation in subsection (4)(a)(i) includes limiting accreditation to consumer contract disputes already in ADR or existing special arrangements.
Subsection (6) requires that, before imposing the relevant sanction, the Secretary of State must give the ADR provider an opportunity to make representations about its conduct and the action the ADR provider considers appropriate for the Secretary of State to take.
Subsection (7) limits the variations that can be imposed under subsection (4)(a) to those variations that the Secretary of State considers necessary to ensure compliance with the accreditation criteria or existing conditions. Subsection (8) clarifies that existing conditions means the conditions as they stood before any variations made under subsection (4)(a) or (9)(b).
Subsection (9)(a) requires the Secretary of State to keep any variations made under subsection (4)(a) under review and under subsection (9)(b) revoke or reverse those that the Secretary of State no longer considers necessary.
Subsections (10) to (13) set out requirements to ensure certainty as to when any variation, revocation or suspension has effect and when any suspension ceases.
By virtue of section 305(1)(b) and (2), the Secretary of State may publish information about sanctions imposed under this section to bring these to the attention of consumers.

Section 299: Fees payable by accredited ADR providers

This section requires accredited ADR providers to pay any fees required by ADR fees regulations. It is intended that, in addition to any fees for applications for accreditation or variation of accreditation under section 296, once accredited ADR providers will be required to pay periodic fees for their continuing accreditation.

Section 300: ADR fees regulations

Subsection (1) allows the Secretary of State, by regulations, to set fees for applications for accreditation and for variation of accreditation and periodic fees for maintaining accreditation.
The power to make regulations will allow fees charged to be kept under review in the future. Regulations made will be subject to the negative parliamentary procedure.
Subsection (2) clarifies that the regulations may set different fees for different cases or circumstances and may provide for cases or circumstances where no fees may be required. The regulations may set payment schedules for periodic fees.
Subsection (3) ensures that, in setting fees, the Secretary of State has regard to the need to ensure that the fees are set at levels commensurate, over a reasonable course of time, with the costs of the Secretary of State in performing the related administrative functions.

Section 301: Accreditation criteria

Subsection (1) introduces Schedule 26 which lists the accreditation criteria, with which an ADR provider must comply to be, and remain, accredited.
Subsections (2) and (3) allow the Secretary of State, by regulations, to amend Schedule 26, either by adding a new criterion, or by varying or removing any existing criteria. Regulations made under these subsections will be subject to the affirmative parliamentary procedure.

Schedule 26: Accreditation criteria

Schedule 26 sets out the accreditation criteria with which an ADR provider must comply to become, and remain, accredited under Chapter 4.
Part 1 sets out the criteria. These are designed to ensure that ADR providers meet standards of accessibility, expertise, fairness, independence, impartiality, and transparency so that consumers receive better outcomes in resolving disputes with traders.
Part 2 contains supplementary provisions on the interpretation and application of the criteria in Part 1. In particular, paragraph 9 clarifies that the accreditation criteria only apply to ADR providers so far as it is reasonable to regard them as applicable in relation to the ADR and activities of the ADR provider and any special ADR arrangements that it makes. This recognises that the criteria in Part 1 are criteria in the nature of general principles, not all of which will be relevant in the same way to all forms or contexts of consumer ADR.

Enforcement of prohibitions etc

Section 302: Enforcement notices

This section allows the Secretary of State to issue enforcement notices to an ADR provider for contraventions of Chapter 4.
Subsection (1) specifies the contraventions for which the Secretary of State may give an enforcement notice. These consist of carrying out ADR or making special ADR arrangements without being accredited to do so; charging consumers unauthorised fees for that ADR; breaching accreditation conditions; failing to pay periodic accreditation fees; failing to provide information required by the Secretary of State.
Subsection (2) requires that, before deciding to issue an enforcement notice, the Secretary of State must give the provider a chance to make representations about its conduct and whether an enforcement notice should be given.
Subsection (3) specifies that an enforcement notice may require the ADR provider to do, or not do, such things as are specified in the notice in order to ensure compliance with a requirement that has been breached.
Subsection (4) and (5) deal with the contents of enforcement notices and are self-explanatory.
Subsections (6) and (7) enable the Secretary of State to revoke enforcement notices or any requirements they contain and, in the latter case, make consequential changes to any remaining requirements which are not revoked.
Subsection (8) provides that, with permission of the relevant court, the enforcement notice may be enforced as if it is a court order.
Subsection (9) provides authority for the Secretary of State to publish information about enforcement notices. The objective is to enable the Secretary of State to publicise enforcement notices, to bring them to the attention of consumers.
Breach of the requirements of this Chapter may also constitute a relevant infringement to which the civil enforcement regime provided by Chapter 3 of Part 3 of this Act (enforcement of consumer protection law) applies.

Provision of Information etc

Section 303: ADR information regulations

This section, pursuant to subsection (1), allows the Secretary of State, by regulations, which are subject to the negative parliamentary procedure, to require ADR providers and other persons to provide ADR information (see section 306(1)) to the Secretary of State (or to other persons to which functions are conferred under section 307), and/or to publish ADR information for the benefit of consumers.
Subsection (2) specifies the persons on whom those requirements may be imposed. These are persons who are or have been: accredited ADR providers; exempt ADR providers; and persons carrying out ADR under special ADR arrangements. Furthermore, those requirements may, in relation to relevant ADR information (see section 306(2)), be imposed on regulators. The purpose of including regulators is to elicit information about ADR provision in regulated sectors which may, in particular, be useful for ascertaining the appropriateness of exempting, or continuing to exempt, relevant ADR providers such as under sectoral redress schemes.
Subsection (3) limits the purposes for which information may be required, these being publication of information for the benefit of customers and monitoring or evaluating the accreditation regime and the provision and quality of ADR in the United Kingdom.
Subsection (4) to (6) are self-explanatory.

Section 304: ADR information directions

This section, pursuant to subsection (1), allows the Secretary of State to give a direction requiring a person to provide the Secretary of State with ADR information.
The purpose of this section is to allow the Secretary of State to require information of a specific kind from a particular person, as and when it is needed, in contrast with the requirements imposed by regulations under section 303 which are more general in their application and envisage provision of information at regular intervals.
Subsection (2) specifies the persons to whom directions may be given and mirrors section 303(2).
Subsection (3) specifies the purposes for which a direction may be given. The purposes mirror those in section 303(3) but, in addition, include any other purposes connected with the exercise of the Secretary of State’s functions under Chapter 4.
Subsections (4) to (7) are self-explanatory.

Section 305: Disclosure of ADR information by the Secretary of State

This section provides for publication or disclosure of ADR information by the Secretary of State.
Subsection (1) specifies the ADR information to which the section applies, this is both information provided to the Secretary of State under sections 303 and 304 as well as information held by the Secretary of State for the purposes of any function of the Secretary of State under Chapter 4. The latter category of information would, for instance, include information relating to any sanctions imposed under section 298 such as a revocation or suspension of accreditation.
Subsection (2) allows the Secretary of State to publish that information for the purpose of providing information to consumers.
Subsection (3) lists persons to which the information may be disclosed.
Subsections (4) and (5) are self-explanatory.
In relation to disclosure of information, see also Schedule 27 which brings Chapter 4 within scope of Part 9 of the Enterprise Act 2002.

Section 306: Meaning of "ADR information" and other terms in sections 303 to 305

This section defines terms used in sections 303-305.
Subsection (1) defines "ADR information".
Subsection (2) defines "relevant ADR information" and this includes information relating to: ADR carried out by a relevant ADR provider; special ADR arrangements made by a relevant ADR provider; ADR carried out in pursuance of those arrangements; and anything done by a regulator which affects the relevant ADR provider in those activities.
Subsection (3) clarifies that, in relation to a regulator, a "relevant ADR provider" is an ADR provider regulated by that regulator whether that ADR provider is accredited or exempt.
Subsection (4) clarifies that references to information about ADR carried out by ADR providers or special ADR arrangements includes information about fees charged to consumers or traders.
Subsections (5) and (6) are self-explanatory.

Involvement of other bodies in the regulation of ADR providers

Section 307: Power to provide for other persons to have accreditation functions etc

This section, pursuant to subsection (1), allows the Secretary of State, by regulations, which are subject to the affirmative parliamentary procedure, to confer certain functions on another person. This might, for instance, allow for some decision-making by a regulator or other person who has expertise in disputes of a particular kind.
Subsection (2) lists the functions that can be conferred.
Subsections (3) and (4) ensure that, when functions are conferred under this section, the persons on whom those functions are conferred can exchange information with each other and with the Secretary of State (who can similarly disclose information to them). Subsection (3) also enables the regulations to abolish functions conferred by regulations under this section.
Subsection (5) enables the regulations to amend Chapter 4. This may be necessary to allow relevant requirements of the Chapter to function effectively where functions are conferred on another person, such as for provisions of the kind in subsection (3). This power does not displace or limit the powers to make consequential provisions in section 336 and consequential, supplementary, incidental, transitional or saving provisions under section 337.
Subsection (6) is self-explanatory.

Complaints by consumers to traders

Section 308: Duty of trader to notify consumer of ADR arrangements etc

This section requires traders to provide consumers with information about ADR or other complaint resolution arrangements in which the trader is required to participate.
Subsection (1) provides that the section applies where a trader responds (see further subsection (3)) to a complaint from a consumer in relation to a consumer contract.
Subsection (2) illustrates the subject matter of complaints relating to a consumer contract to which the section applies.
Subsection (3) imposes the substantive requirement and is to be read with subsection (4). The requirement arises when the trader communicates the outcome of the complaint. At that point, the trader must inform the consumer about any ADR or other arrangements for securing or facilitating resolution which are available to the consumer and in which the trader is required to participate by legislation or contract. The requirement ensures that the consumer, if dissatisfied with the outcome of the complaint, is made aware of those arrangements. The arrangements in relation to which the requirement applies are not limited to accredited ADR and are wider than the definition of ADR in section 291.
Subsection (5) provides that, where a trader does not comply with this section, the Secretary of State may give that trader an enforcement notice in accordance with section 302(1).
Subsection (6) clarifies that the trader notification obligation does not qualify any other obligation a trader may be under to provide information.

Consequential amendments etc and transitional provision

Section 309: Consequential amendments etc relating to this Chapter

This section gives effect to Schedule 27 which makes consequential changes to other legislation.

Schedule 27: Chapter 4 of Part 4: consequential amendments etc.

This Schedule modifies other legislation for the purpose of Chapter 4. In particular, this Schedule:
1. Amends section 14 of the Prescription and Limitation (Scotland) Act 1973, section 33B of the Limitation Act 1980, section 1B of the Foreign Limitation Periods Act 1984, article 51B of the Limitation (Northern Ireland) Order 1989 (S.I. 1989/1339 (N.I. 11)) and section 140AA of the Equality Act 2010. These provisions extend limitation periods to facilitate consumer ADR if the deadline for commencing proceedings would otherwise expire during or immediately following the ADR process and the amendments update these provisions to reflect the enactment of Chapter 4.
2. Adds Chapter 4 to Schedule 3 of the Regulatory Enforcement and Sanctions Act 2008 (RESA) in line with the inclusion of Chapters 1-3 of Part 4 in that Schedule.
3. Amends Schedule 5 to the Consumer Rights Act 2015 (investigatory powers etc.) so that the Secretary of State can use the investigatory powers in that Schedule for investigating actual or suspected breaches of Chapter 4.
4. Adds a reference to Chapter 4 in Schedules 14 and 15 of the Enterprise Act 2002. The amendment of Schedule 14 ensures that information relating to individuals and businesses which comes to the Secretary of State in the exercise of the Secretary of State’s functions under Chapter 4 is "specified information" to which the restrictions on disclosure under Part 9 of the Enterprise Act 2002 apply. The amendment to Schedule 15 ensures that the Secretary of State may, under section 241(3) of that Act, disclose that information to any other person for the purposes of Chapter 4. This ensures consistency with other consumer protection legislation to which Part 9 of the Enterprise Act 2002 applies.
5. Revokes the EU-derived Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (S.I. 2015/542), which Chapter 4 of Part 4 replaces.

Section 310: Transitional provisions relating to this Chapter

This section makes transitional provisions.
Subsections (1) and (2) provide that the prohibitions on carrying out ADR under section 293(1) and on charging fees to consumers under section 294(1) do not apply in relation to ADR started before these prohibitions come into force. Subsection (3) defines when ADR is started for these purposes, which is when the dispute was first sent to or otherwise communicated to the ADR provider.
Subsection (4) provides that the prohibition in section 294(3) on the charging of fees by a person carrying out ADR under special ADR arrangements does not apply to ADR started before that prohibition comes into force.
Subsection (5) provides that the prohibition in section 293(2) on a person making special ADR arrangements does not apply in relation to special ADR arrangements made by that person before that prohibition comes into force where that person is an exempt or accredited ADR provider whose exemption or accreditation would cover the making of those special ADR arrangements.
However, subsection (6) provides that, where that prohibition does apply, subsection (5) does not prevent the continuation of special ADR arrangements relating to ADR started before that prohibition comes into force.
Subsection (7) provides that, for the purposes of the transitional provisions in subsections (4) and (6), ADR is taken as starting when the dispute is first referred to the ADR provider making the special ADR arrangements or the person carrying out the ADR under those arrangements, whoever receives it first.
Subsection (8) provides that the requirement under section 308(3) to inform consumers about ADR or other arrangements available to them does not apply where the consumer’s complaint was received by the trader before the coming into force of that requirement.

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Explanatory Notes

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Part 4: Consumer rights and disputes

Chapter 1: Protection from unfair trading

Introduction

Section 224: Overview

Prohibition of unfair commercial practices

Section 225: Prohibition of unfair commercial practices

Schedule 20: Commercial practices which are in all circumstances considered unfair

Section 226: Misleading actions

Section 227: Misleading omissions

Section 228: Aggressive practices

Section 229: Contravention of the requirements of professional diligence

Section 230: Omission of material information from invitation to purchase

Public Enforcement

Section 231: Public enforcement

Consumers’ right to redress relating to unfair commercial practices

Section 232: Right to redress

Section 233: Rights to redress: further provision

Section 234: Enforcement of rights of redress

Section 235: Relationship between rights of redress and other claims relating to prohibited practices

Inertia Selling

Section 236: Inertia selling

Offences relating to unfair commercial practices

Section 237: Offences

Section 238: Defence of due diligence and innocent publication

Section 239: Offences: Criminal liability of others

Section 240: Penalty for offences

Section 241: Time limit for prosecution

Miscellaneous

Section 242: Powers to amend this chapter

Section 243: Crown Application

Section 244: Validity of agreements

Interpretation

Section 245: Meaning of "transactional decision"

Section 246: Meaning of "average consumer": general

Section 247: Meaning of "average consumer": Vulnerable persons

Section 249: General interpretation

Section 250: Index of defined terms

Consequential amendments and transitional provision

Section 251: Consequential amendments etc relating to this Chapter

Section 252: Transitional and saving provisions relating to this Chapter

Chapter 2: Subscription contracts

Introduction

Section 253: Overview

Section 254: Meaning of "subscription contract"

Section 255: Excluded contracts

Schedule 22: Excluded contracts

Duties of traders

Section 256: Pre-contract information

Schedule 23: Pre-contract information and reminder notices

Section 257: Pre-contract information: additional requirements

Section 258: Reminder notices

Section 259: Content and timing etc. of reminder notices

Section 260: Arrangements for consumers to exercise rights to end contract

Section 261: Duties of traders on cancellation or end of subscription contract

Rights of consumers to cancel contract for breach

Section 262: Terms implied into contracts

Section 263: Right to cancel for breach of implied term

Cooling-off rights

Section 264: Right to cancel during cooling-off periods

Section 265: Meaning of "initial cooling-off period" and "renewal cooling-off period"

Section 266: Cooling-off notice

Cancellation of contracts under this Chapter: further provisions

Section 267: Cancellation of subscription contract: further provisions

Offence of failing to provide information about cooling-off rights

Section 268: Offence of failing to provide information about initial cooling-off rights

Section 269: Defence of due diligence

Section 270: Offences by officers of a body corporate etc

Section 271: Penalty for offence and enforcement

General and miscellaneous provisions

Section 272: Information and notices: timing and burden of proof

Section 273: Terms of a subscription contract which are of no effect

Section 274: Other remedies for breach by trader

Section 275: Application of this Chapter