The UK’s Competition & Markets Authority (CMA) recently issued its revised “Statement on coronavirus (COVID-19), consumer contracts, cancellation and refunds”.

The statement, which was first made available on 30 April 2020 by the CMA, aims to help consumers understand their rights when contracts cannot go ahead due to legal restrictions on certain activities introduced as a result of the pandemic (‘lockdown laws’).

The updated statement now focuses on consumers’ rights where lockdown laws do not prevent a trader from rendering a service but change how it can be rendered.

Cancellation and refunds

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;
  • -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.

Refund terms 

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 statement underscores the significance of promoting adherence to government guidance and exhorts traders to treat consumers fairly.

Read the full article on  Lexing UK‘s website (Preiskel & Co):