New Distance Selling Regulations
EU Consumer Rights Directive
With effect from 13 June 2014, the old Distance Selling Regulations have been replaced by The Information, Cancellation and Additional Charges Regulations 2013. These are the UK implementation of the EU Consumer Rights Directive, which sets the framework for virtually identical EU-wide rules governing distance sales including online sales.
Is this much the same as the old distance selling rules?
No. For example: very specific and extensive information must be given to consumers in particular ways both pre and post-contract, cancellation rights are extended to 14 days, model cancellation forms must be offered to consumers, it is more difficult to stop consumers cancelling contracts for services and - a significant piece of good news for traders - you don't have to make a refund until you get the goods back. There are more serious consequences than before for traders who don’t comply with the information and other requirements including traders being treated as in breach of contract as well as consumers not being bound by contracts, not having to pay for goods / services and consumer cancellation rights being extended for up to 12 months.
What kind of consumer information requirements apply?
There is a now a whole plethora of information which traders have to bring to the attention of consumers including about you, your goods or services, pricing and charging, payment options, delivery restrictions, very detailed specific information about cancellation rights, a model cancellation form, notice where cancellation rights don't apply, duration/termination of contracts for services; functionality/compatibility of digital downloads - and so on. There is a series of specific requirements as to how you convey the information: some must be clearly and comprehensibly set out on your site; some must be shown by the start of the order process; and some must be provided at the end of the order process just before the order is placed. The rules even call for the order button to be labelled in a way which shows that the consumer is taking on an obligation to pay (e.g. "pay now") - if you don't, the consumer isn't bound. Then, you have to provide virtually all of the information again after the contract in a "durable medium" (usually this will be in the confirmation email).
What about consumers' rights to cancel contracts for supply of goods?
In a nutshell: This right is now extended to 14 days from delivery of the goods or the last of the goods (if the order included multiple items). The consumer can, but doesn't have to, use a model cancellation form - which you must make available together with specific instructions about how the cancellation process works. If you comply with the information requirements, you can generally require that the customer pays the cost of return. You must reimburse the consumer within 14 days of receiving back the goods or notification that they have been sent to you. You must refund the total price plus delivery charge - though this need only be the amount of your standard delivery charge, even if the customer has selected a premium delivery option. If the customer has been correctly warned beforehand, you can make a deduction for excessive handling of the goods by the customer, beyond that which would normally be allowed in a shop.
What about consumers' rights to cancel contracts for supply of online services?
In a nutshell: Again the right is extended to 14 days. It runs from the date when the contract is concluded. To be able to start supplying services within the 14 days, you must get specific opt in consent from the consumer. A new notice / tick-box is needed. You can't now prevent the consumer from cancelling the contract just because the service has started.
However, if you have obtained the correct consent, you can charge pro rata for the service supplied and withhold this from the refund.
Can consumers' cancel contracts for digital downloads such as software?
Yes - unless the trader has obtained specific consent and acknowledgment from the consumer that the digital download would start before the end of the 14-day cancellation period, resulting in loss of cancellation rights.
What other kinds of areas are covered by the new regulations?
Amongst other things, there are rules about traders not charging for anything other than their "main obligation" without the consumer's specific consent, not charging for helplines at more than the basic rate, complying with any delivery dates set by the trader (or otherwise delivery without "undue delay") and risk of loss to goods not passing to the consumer until delivery.
What should traders do to comply with the new distance selling law?
You should update your terms and conditions as well as other relevant parts of your website (including order process) and your confirmation email to ensure that you have included all of the information, forms and consents which you require to protect yourself under the new law.
We provide a fixed-price distance selling update package for traders comprising amendments to your terms and conditions (or a new set if you wish), a checklist of the necessary additional information to include on your site and in your confirmation email, plus a pro forma confirmation email and relevant consent wording to use on your site.
How Adlex Solicitors can help ...
... for a free initial chat and more information, contact web solicitor Adam Taylor on +44 (0) 207 317 8404 or email.