My Lords, I am intervening rather unfairly on this amendment to say that I do not support it and that, as the Bill’s passage carries on, a number of sectors will have their voices represented. I want to raise issues that have been raised with me by the motor sector, particularly the Finance and Leasing Association, which represents a wide range of those who finance the purchase of motor cars by consumers.
As we heard, Clause 22 introduces this 30-day right to reject goods if they are of unsatisfactory quality, however minor the defect. Sellers are unable to deduct the costs incurred—for example, depreciations—while the goods have been used by the consumer. As a result, the right to reject could have a particular cost implication in the world of motor finance, where 75% of private new car sales are bought on finance. New cars, as my noble friend may know, typically lose 15% to 20% of their value in the first 30 days, and in the event of a defect the car dealer will have to offer to repair the car, although the customer is not obliged to accept that
and can simply opt to hand back the vehicle. In a worst-case scenario, as the FLA says, the customer might have had the car for a month and driven it extensively, clocking up thousands of miles, only to hand it back because of a very minor defect—for example, the windscreen wipers failing to work properly. That is the case that the FLA makes.
I am very happy for my noble friend to write, since this is a rather unexpected intervention. There is clearly a balance to be struck between ensuring that customers are able to return faulty goods and preventing potential abuse. I therefore ask my noble friend whether the department will clarify, in the accompanying guidance to the Bill and in any associated publicity, that this new short-term right to reject should be invoked only if the quality of the goods is genuinely unsatisfactory—that is, the defects are not simply minor mechanical or cosmetic ones—and ideally it should be done as soon as possible within the 30-day period.
Secondly, could my noble friend confirm how this new short-term right to reject fits with Section 75 of the Consumer Credit Act, which already allows the customer to make a claim against a supplier or lender for breach of contract? This Consumer Rights Bill gives the consumer a right to challenge the supplier, whereas Section 75 of the CCA establishes an additional right to pursue the creditor for breach by the supplier. Will the Government be making clear in the guidance that the customer must obtain recourse from the supplier first, and that the supplier must not renounce responsibility on the grounds of Section 75?