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The Consumer Rights Act and what it means for rail passengers

1 October 2016

From Saturday 1 October rail passenger services will be covered under the Consumer Rights Act thereby giving passengers the same legal protection they receive when paying for any other service or goods; and more power to obtain redress when a train operator lets them down.

Lianna Etkind, Public Transport Campaigner, Campaign for Better Transport said:

"Too often, passengers pay high fares yet receive overcrowded, uncomfortable and sometimes downright inadequate service. It's no wonder that so few passengers claim compensation at the moment - it's poorly publicised and the process is a hassle. Poor performance on the railways is not just limited to delays, and we welcome the fact that from this weekend, the new Consumer Rights Act will cover the quality of rail journeys as well. 

"How much compensation will passengers be able to claim when the there is no working toilet on board, when there are no seats available or the promised wifi is not working? We will be working with passengers to press for answers so that more passengers to get proper redress when train companies let them down.”

Background

The Consumer Rights Act came into force in October 2015. Although buses and other public transport were included from the outset, the Government originally planned to exempt rail from the Act on the grounds that existing rail compensation arrangements were 'robust and well-understood'. There is a clear argument that this is not the case. Recent research has found that up to 88 per cent of rail passengers suffering delays of 30 minutes or more do not claim compensation and 74 per cent of those suffering such delays did not even understand that they were eligible. Many are put off by the hassle of claiming compensation: many train companies do not offer passengers a way to claim online; or insist on scans of tickets.

Currently compensation arrangements vary between train companies and depend upon what type of ticket you travelled on, but usually it is up to the passenger to make a claim within 28 days of the journey and by submitting the original ticket. Any reimbursement is normally paid in rail vouchers.

At present, train companies often profit from delays, as they receive compensation known as 'Schedule 8 payments' from Network Rail when services are disrupted. Last year, it was revealed that between 2010 and 2015, out of £575m paid to train companies by Network Rail for delays and cancellations caused by issues such as points or power failures, train companies paid only £73m in compensation to passengers.

Following a public consultation, the Government changed its position and announced that rail passenger services would be covered by the Act from 1 October 2017. Following criticism of the delay in implementation from groups including Campaign for Better Transport, the Government announced the Act would apply a year earlier.

What is the Consumer Rights Act?

The Consumer Rights Act 2015 simplifies and adds to the existing body of consumer law in the UK and sets out the basic rules which govern how consumers buy and businesses sell to them. The Act provides an important update to existing laws, and for rail passengers also includes new areas of responsibility:

  • Consumers now have a right to redress when a service is not provided with reasonable care and skill or as agreed.
  • Information provided to a consumer before making a purchase, whether oral or in writing, is binding where the consumer relies on it.

What will it mean to rail passengers?

The Consumer Rights Act should mean rail passengers are able to claim compensation for problems beyond a delay. It also means that passengers will now have the option of receiving a monetary refund in contrast to the current delay repay which generally offers the refund in the form of vouchers.

What else do we want to see?

Whilst we welcome the inclusion of rail services under the Act, we want to see more clarity over what is covered by legislation and how the Government and train operators expect it to be applied. This could include:

  • Compensation for all delays over 15minutes. This was promised by the Government in last year's Autumn statement but has not yet been delivered. 
  • All passengers travelling on smart tickets or who have booked on a train company's website in advance to automatically receive compensation for delays.

    A single set of compensation arrangements across all franchised passenger rail services to improve clarity.

  • Better promotion of when compensation is due, e.g. compulsory on-train announcements after a 15 minute delay, and the ability to claim online.
  • Targets for the percentage of compensation paid to train operators by Network Rail to be passed on to passengers.

Poor performance on the railways is not limited to delays. There are a range of other areas where the Act could be applied. These include:

  • Absence of working wifi where it has been offered.
  • Unacceptable facilities - such as a non-working or dirty toilet.

From 1 October these areas could all now be covered under the Act, but it remains unclear how the powers will operate in practice, and testing how the Act will be a priority for passenger groups.

An early test of the new law may be dealing with passengers who travel on lines hit by repeated delays and cancellations, such as those travelling on Southern services in recent months. A passenger group is already considering judicial review of the Government’s handling of the situation. The Consumer Rights Act could offer another outlet for disaffected passengers seeking reimbursement for the prolonged period of severe disruption. 

ENDS

For further information please contact Richard Watkins on 020 7566 6494 / 07984 773 468 or richard.watkins@bettertransport.org.uk

Notes to Editors

1.     Statistics taken from Transport Focus: http://www.transportfocus.org.uk/news/articles/rail-companies-should-do-more-to-promote-passengers-rights-to-refund-and-compensation)

2.     Government announcement that the Consumer Rights Act would apply on rail passengers services: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/550780/consumer-rights-act-2015-application-to-transport-services.pdf

3.  Compensation paid to passengers 2010 - 2015; and Schedule 8 payments paid by Network Rail to train companies: http://www.railtechnologymagazine.com/Rail-News/tocs-could-be-forced-to-spend-nr-delay-payments-on-improvements-under-new-bill

4. The Association of British Commuters is already considering judicial review of the Government’s handling of the Southern Rail situation.

5.     Campaign for Better Transport is the UK's leading authority on sustainable transport. We champion transport solutions that improve people's lives and reduce environmental damage. Our campaigns push innovative, practical policies at local and national levels. Campaign for Better Transport Charitable Trust is a registered charity (1101929).

 

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