BEIS announces proposed law change to benefit consumers buying pre-paid goods

Article summary

The Department for Business, Energy & Industrial Strategy (BEIS) has issued a press release regarding proposed changes in law to better protect consumers in the event that a company, and in particular a retailer, becomes insolvent. The Law Commission believes that the current rules on transfer of ownership are outdated and ‘not fit for modern-day shopping practices’. Under existing law, if a company becomes insolvent but goods pre-paid for are still in its possession, they may be considered as assets belonging to the business and can be used by company administrators to pay off the company’s debts. Proposed changes will update this law to reflect that consumers legally own the goods for which they have pre-paid, providing clarity for consumers on when they will own goods that have been pre-paid for and guidelines setting out ways of identifying the consumer as legal owner, including goods that have been labelled or altered...