Consumers can get full refunds by law

This week I will explain the third (and final) highlight of the amendments that address payment in full for goods and services in advance.

Payments

It is the norm for many local businesses to require half or full payment of products and services before they have been provided. 

This requirement puts the consumer at a financial disadvantage when the business is unable to provide the product or service in a timely manner or in accordance with the delivery date as per the Agreement.

The vendor’s failure to deliver the product or service may be as a result of any number of reasons.

However, regardless of the reason a breach has happened because the consumer has paid in full in advance, which puts the vendor in a position of power.

Despite the failure to deliver which breaches the Agreement, many businesses do not refund the money owed to the consumer and will do one or all three of the following:

• The business will coerce the consumer into giving them more time. The average waiting time for consumers is anywhere from 6 to 36 months.

• The business will give the money back but only after large deductions are made for such things as administrative costs; or

• The business will use delay tactics, become unavailable or place the blame elsewhere, all in the hopes of deterring the consumer from pursuing their money.

As a result, the consumer must then pursue the refund through the Small Claims Court procedure at Magistrates Court and most often will perceive this as too much trouble and decide to forgoe the refund. 

Changes

Now, with the amendments to the Act, if a business fails to deliver goods and/or services in a timely manner as per the Agreement, the consumer can ask for their money back in full.

Simply write to the business requesting a full refund and, according to the Act, that business has up to 30 days to refund the consumer in full. 

All businesses should take note of these amendments because prior to the amendments to the Consumer Protection Act 1999, those found guilty of violating the Act faced a maximum $15,000 fine and/or imprisonment for up to 12 months.

With the amendments to the Act, in addition to imposing a penalty, the courts can make an order for the payment of compensation in favour of the affected consumer.

Honey Adams is the education officer for the Department of Consumer Affairs. The amended Act can be found on our website along with copies of other consumer laws. Visit www.ca.gov.bm