In moving Amendment 9, I wish to speak also to Amendments 13 and 25 in this group, which all stand in my name and that of my noble friend Lord Stevenson of Balmacara.
Amendment 9 is central to the aim of the Bill as it states that the trader must be explicit about people’s statutory rights at the time of the purchase so that people know when they are buying something what they can do if something goes wrong and what their rights are. The Bill’s laudable aim of simplifying rights and making them useable will be achieved only if consumers understand what those rights are. The best time to explain them is when they are about to make a purchase; we should not wait until something goes wrong. For the vast majority of consumers nothing does go wrong, or we hope that is the case. We purchase goods where nothing goes wrong far more often than we do goods where something does go wrong, but it is at the moment of purchase that these rights should be explained. It is also part of the process of deciding whether to buy something. It is important to know what redress you have if you are worried about whether something is faulty or will work. I cannot be the only person who has been a bit mystified when standing by a till and reading a notice which says, “This does not affect your statutory rights”. Indeed, I am tempted to ask the Minister to explain that term, but I will save her blushes on this occasion.
BIS’s own consumer detriment survey showed that although the majority of people consider themselves to be confident and savvy there were still substantial
gaps in their knowledge, so just asking consumers whether they are confident about knowing their rights is not good enough. For instance, more than two-thirds of them did not know that if a major appliance broke down 18 months after purchase, they could still have a right to have it repaired or replaced even if they did not purchase an extended warranty. Indeed, very few of us understand our rights and that will remain the case unless we all receive some very simple explanations, no matter how well the Bill is drafted. We agree with Citizens Advice that rights can be set out briefly and simply. It has produced wording on this issue which has been seen by BIS—for example, “Under the Consumer Rights Act, consumers have 30 days to return an item if it is faulty”, so we are not talking about complicated wording. Similar information on repairs or refunds could be given at point of purchase.
We know that the Government agree in principle with giving this clear information but have backed off including it in the Bill, arguing that that would reduce flexibility for the implementation group, which comprises retailer and consumer organisations. We know from gossip on the street that there is consensus in the group that action is needed to make sure that consumers are aware of their rights but no consensus on whether point-of-sale information should be mandatory. I hope that I am not giving away any secrets in saying that the business members, with support from trade associations, BIS and consumer groups, argue that a voluntary approach would be the best way forward, whereas Citizens Advice, Which? and moneysavingexpert, which I think also sit on the group, remain unconvinced about that, as do we. There is no guarantee that traders will voluntarily display this type of information and, once a Bill is passed, attention and enthusiasm tend to fade. Some traders will go on displaying the information for a short period but that is not the same as it being displayed everywhere all the time.
It is true that at an earlier stage in the other place we were told that the implementation group would be looking at whether consumers would consider this sort of information better when something actually went wrong. If that is the case, I am sure that the Government will accept our Amendment 13 in this group, which I will get to shortly, which is about giving information at the time of a problem. However, our view is that information should be given both at the point of purchase, in the sense that it is part of the purchasing decision but it is also part of educating consumers, and later, should something go wrong.
Amendment 13 is about telling people their rights when they actually make a complaint. A key part of consumer rights is the availability of redress. The noble Baroness, Lady Wilcox, who is not in her place at the moment, started going through the six consumer principles, and of course the right to redress, as she knows very well—she probably wrote them—is one of them. The right to redress is having something put right, preferably by the service provider but, if not, having the issue settled by an ombudsman, perhaps with compensation. However, the consumer will not even start on that journey of complaint and seeking repair, replacement or refund unless they know they have that right to complain and when that right is there. Amendment 13 would ensure that the rights to
redress was more widely understood and used by explaining, at the time when someone complained, what those rights were.
Although some of us have confessed to not being the savviest of shoppers, I hope we do not still fall for those offers. I do not know how savvy we are when we go back to a shop to complain, wanting either a replacement or a repair. What happens very often is that we are misinformed about what our rights are. There is a lot of evidence that traders themselves either do not understand the position or choose to misrepresent consumers’ statutory rights. Which? did a secret shopping exercise and contacted six major retailers, visiting them each 12 times. In nearly 80% of cases, a member of staff,
“stated or gave a clear impression that we”—
that is, the people doing the mystery shopping—
“didn’t have any rights against the retailer, or told us to speak to the manufacturer instead”.
Shoppers also get told that goods are out of warranty, that they need to go to the manufacturer or that there is simply nothing that can be done. The other thing that can happen is that traders refuse to give a refund even when they should but offer a credit note to be used in the same shop. Clearly, that does not meet statutory rights. If the consumer is very persistent and goes to Citizens Advice, they may then know better and go back, but there is then still no guarantee that the member of staff they talk to will know what their rights are. Under Amendment 13, both staff and consumers would have easy access to information about the buyer’s rights and therefore would be able to have a better conversation.
I know that the Government were hoping that the implementation group could come up with a way forward but, given that we think that has not happened, it would be useful to take advantage of this amendment and put it into the Bill. Even if the group did come up with recommendations we are unsure of what their legal force would be, so perhaps the Minister could also say whether any recommendations from the voluntary group would have any legal force. We have the opportunity here to set a requirement that such information will be provided. This does not need to be the exact wording—the group can do that—but if we fail to put it into the Bill at all, we risk undermining the Bill’s benefits. We know that good traders are going to do all this; it is the poor ones that we are after.
One further small area in this group that consumers also need more clarification on is free guarantees—guarantees provided free of charge by traders over and above statutory rights. We are talking here not of paid-for warranties but of free guarantees. Amendment 25 would require that any such guarantee provided by a trader sets out what the statutory rights are; otherwise, the purchaser has only the trader’s guarantee and is still not told what their statutory rights are. This approach has been very much supported by Martin Lewis of moneysavingexpert.com, who says that it is really important for consumers to know whether the trader’s guarantee is worth anything more than statutory rights. Also, if consumers are told what their statutory rights are, they might decide not to buy the extended warranty, because they may have more rights—particularly
after this Bill—than they thought that they had. Without this amendment, they might get very confused when they have a trader’s guarantee to know whether there is still something left to them under their statutory rights.
What the Minister in the Commons said is important: that statutory rights always override any statements in a trader’s guarantee. Even if a trader’s guarantee does not meet something, the statutory rights always override it, but my guess is that not many consumers know that. Even in that position, they may have to take legal advice to find that out or to go to court, which is not the position we want them to be in.
We hope this small amendment will be accepted, because it will again be a way for consumers who have this extra guarantee to know exactly what their statutory rights are, which is an objective that the Government, as well as ourselves, would like to meet. I beg to move.