Traders’ obligations to consumers: An overview of the Consumer Rights Act 2022
The Consumer Rights Act 2022 (the “Act”) imposes a wide range of obligations on traders and service providers. The Act significantly overhauled Irish consumer protection law, bringing it further into alignment with European standards. A central aim of the legislation is to promote transparency and fairness in consumer contracts.
The Act also significantly expands the enforcement powers of the Competition and Consumer Protection Commission (“CCPC”), increasing regulatory scrutiny and the consequences of non-compliance. It is therefore essential that providers of goods and services understand and comply with their obligations to avoid the risk of enforcement action or prosecution.
The Act sets out obligations in respect of three main categories of contracts:
(i) contracts for the sale of goods; (ii) contracts for the supply of services; and (iii) contracts for the supply of digital content or digital services.
Some of the key areas requiring compliance are outlined below.
Right to information
For a consumer to be bound by an agreement, the trader must provide certain prescribed information in a clear and comprehensible manner.
- On-premises contracts (except certain day-to-day transactions)
Traders supplying goods, services or digital content under an on-premises contract must provide specific information to the consumer, including: the main characteristics of the goods or services; the trader’s name, legal entity and address; and the total price payable.
- Off-premises contracts (for payments in excess of €50)
Additional information requirements apply to off-premises contracts. Traders must provide, among other things, the address of their business (if different from their place of establishment); the address of any trader on whose behalf they act; and details of any out-of-court redress mechanisms available to the consumer.
The information must be provided in a durable medium and must be legible. Traders must also provide a template cancellation form where a right to cancel applies.
Separate rules arise where a consumer requests immediate repairs or maintenance and pays less than €200.
Furthermore, confirmation of the concluded contract must be provided before or at the time the contract is entered into.
- Distance contracts
In general, the same information requirements apply to distance contracts as to off-premises contracts, but no minimum payment threshold applies.
Further obligations arise where the contract is concluded via an online marketplace (including websites and applications). Additional requirements also apply where the contract is concluded by electronic means.
Consumers must be provided with confirmation of the contract once it is concluded.
Right to change /cancel
The Act grants consumers a right to cancel certain distance and off-premises contracts. It also sets out circumstances where the right does not apply. For example, where a service has been fully performed after the consumer expressly requested performance and acknowledged that the right to cancel would be lost once the service was completed.
Where a cancellation right exists:
- The consumer must cancel before the end of the cancellation period.
- No reason for cancellation is required.
- The consumer must cancel in the manner provided for by the Act.
- No costs shall be incurred by the consumer for cancellation, other than specific costs provided for in the Act, such as non-standard costs of returning goods and costs for damaged goods.
- Different cancellation periods apply depending on the type of distance or off-premises contract. Upon expiration of that period, the consumer loses the right to cancel.
- If the trader fails to provide the required information on cancellation rights, the cancellation period is extended.
Rights to consumer information, cancellation of contracts and other related rights provided for by the legislation cannot be waived.
Unfair terms
The Act provides that certain terms are deemed “unfair” and are not binding on consumers. The Act contains a list of terms that are always unfair (the “Black List”) and a list of terms presumed to be unfair unless proven otherwise (the “Grey List”). Ultimately, if a dispute arises, it is for the courts to determine whether a term is unfair in the circumstances.
Beyond unfair terms, the Act prohibits misleading, aggressive, and unfair commercial practices. Breaches may result in enforcement action by the CCPC.
Breaches of consumer law / Complaints to the CCPC
The CCPC has statutory authority to take enforcement action where consumer rights have been infringed. In recent months, we have observed and advised on a marked increase in CCPC enforcement activity, with the regulator more frequently investigating practices, scrutinising terms and conditions, and issuing formal warnings.
The following are examples of enforcement actions which may be brought:
- Prosecution – certain breaches of the Act constitute criminal offences and may result in fines and/or imprisonment.
- Prohibition orders – the CCPC may seek court orders prohibiting a business from engaging in specified practices.
- Compliance Notices – the CCPC may issue such a notice on a business, requiring that they rectify/remedy their practices within a specified timeframe. The business has a right of appeal to the Courts.
Given the CCPC’s increased enforcement activity and expanded statutory powers, businesses that fail to review and update their terms, policies, and practices face a materially higher risk of investigation, sanctions, and prosecution.
If you would like further information regarding your business’ obligations to consumers, please contact Cian Clinch (cclinch@hayes-solicitors.ie) or Eimear Kinsella (ekinsella@hayes-solicitors.ie).
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