New rules surrounding online content will change the way digital firms handle complaints about their products and services.
The new Consumer Rights Act 2015 (CRA), which comes into force on October 1, will reform consumer law in the UK by granting customers greater rights over defective digital products.
With increasing reliance on digital products for entertainment and productivity, the new rules aim to combine the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 and bring regulations into the 21st century by recognising digital content as a new category of product.
What is digital content?
Under the act, digital content is defined as ‘data which is produced and supplied in digital form, including software, music, computer games and applications’, so the new rules will affect a whole host of businesses in the creative industry that sell directly to consumers.
While the changes may be good news for consumers, what does this mean for businesses which offer digital products and services online and how will it affect how complaints are dealt with? Here, commercial law expert David Filmer explains.
Who does the Consumer Rights Act 2015 apply to?
The CRA relates to the quality, purpose and description of digital content and applies automatically to contracts between consumers and businesses for digital content that has been:
- Paid for by the consumer;
- Supplied free with goods, services or other digital content that the consumer has paid for;
- Paid for with another facility that has been purchased with money e.g. gift vouchers or virtual currency.
Remedies for breach of rights
Unlike with goods, consumers have no right to reject digital content, except in cases where digital content is included in goods.
The main remedies for defective digital products are repair, replacement or a reduction in price, however a consumer cannot expect a repair or replacement if this would be impossible or disproportionate compared to other remedies.
If a repair or replacement is impossible or not carried out within a reasonable amount of time or poses significant inconvenience to the consumer, then the consumer has the right to a reduction in price.
In addition to the new statutory rights regarding quality, there is also new protection for consumers who, as a result of purchasing digital content, suffer damage either to their device or to other digital content or software.
If the damage suffered would not have occurred if the trader had exercised reasonable care and skill, consumers have the right to require the provider to either repair the damage and bear all costs of doing so or pay appropriate compensation.
Implications for businesses
Businesses which will be affected by the CRA have until October 1 to prepare for the impact of the new provisions. These businesses need to:
- Review terms and conditions of supply to ensure that the terms are in line with the new regime;
- Prepare complaints procedures or review existing procedures to ensure the correct implementation of the tiered remedies and deal with price reductions;
- Internal training of customer-facing staff; and
- Consider steps to address risks arising from the new right to repair or compensation for damage to devices, including reviewing software testing processes and existing insurance cover.
For more information on the new digital content regulations contact David Filmer on 01772 258321. David is a director at Harrison Drury solicitors in Preston, helping to provide expert legal advice on all corporate and commercial mergers and acquisitions for a range of clients throughout the North West.