The Competition & Markets Authority (CMA) recently issued its revised “Statement on coronavirus (COVID-19), consumer contracts, cancellation and refunds“, which was first made available on 30 April 2020. The updated statement now focuses on consumers’ rights where lockdown rules do not prevent a trader from rendering a service but change how it can be rendered.
For instance, if the service is fundamentally different to what was initially agreed, the consumer would usually have the right to cancel its contract and be reimbursed. Now, if the differences in the service are only minimal, a consumer should be able to decide between cancelling the contract on the trader’s standard terms (as long as these are fair), or receiving the service and obtaining an appropriate deduction in the price.
While the updated statement also foresees the situation where the provision of a service is hindered by compliance with COVID-19 restrictions which are laid down in the form of government guidance (rather than law), it goes on to reaffirm that the consumer would still have to cancel the contract on the trader’s standard terms (again, as long as these are fair). Nonetheless, the statement underscores the significance of promoting adherence to such government guidance and exhorts traders to treat consumers fairly.
Another crucial amendment to the CMA’s updated statement warns that consumers should not be required to take unreasonable or unnecessary steps to be reimbursed and that a formal claim is not required for a refund to be due. An overhaul to the section focusing on the timing of reimbursements now clarifies that an interruption in the service caused by COVID-19 is now less likely to be a satisfactory justification for late repayment. An additional segment of the statement reinforces the need for trader’s standard terms to specify plainly and prominently the amounts to be withheld or charged on consumer cancellation, which sums shall not be disproportionate.
The material contained in this article is only a general review of the topics covered and does not constitute any legal advice. No legal or business decision should be based on its content.