The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 come into force on 13 June 2014 to replace the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008 (known as the Doorstep Selling Regulations). The new regulations will apply to all customer contracts for goods and services and they may require you to alter your current terms and conditions of sale.
While the full title may be no snappier than the previous legislation, the aim of the new Consumer Contracts Regulations is to harmonise distance selling across Europe in line with the EU Consumer Rights Directive. While some of the provisions are similar to the Distance Selling and Doorstep Selling Regulations, there are some significant changes in the way that businesses will have to contract with consumers.
While some parts of the new Regulations relate to all contracts between a trader and a consumer, some parts only apply to distance contracts (where the seller and buyer are not in the same location) and to “off-premises” sales (where a trader and a consumer are in the same location but that location is not the trader’s business premises). Where the contract is concluded on the trader’s business premises “immediately after the consumer was personally and individually addressed in a place which is not the business premises” of the trader, that would also constitute an off-premises sale.
Confirmation of purchase
As before, sellers need to provide confirmation of purchase within a reasonable time. This will usually be by e-mail and must be done not later than the time of delivery of any goods supplied under the contract and before performance of any service supplied under the contract. The information supplied must now include a full description of the goods or services purchased, the full price including tax (VAT) and any additional costs, such as delivery.
For online purchases, the trader must ensure that the consumer, when placing the order, “explicitly acknowledges that the order implies an obligation to pay”. In most online shops this is already carried out by a “click to buy” button but the labelling now needs to be absolutely clear.
Tick boxes and delivery
For online purchases, the use of pre-ticked boxes for delivery options and other charges is now prohibited for any delivery option above standard delivery. Unless the customer expressly agrees otherwise, delivery of goods under all contracts must now be made within 30 days of purchase.
Risk during delivery
Delivery of goods to the customer will now be at the retailer’s risk unless the goods are delivered by a courier arranged by the customer. Retailers cannot state in their terms and conditions that delivery is at the customer’s risk.
The statutory cooling off period for distance and off-premises contracts is extended from 7 days to 14 days. There remain exemptions to the cooling off period for perishable goods with short expiries and where goods are bespoke or are personalised for the customer.
Customers generally have to be informed of their right to cancel. The customer also has to be provided with a model cancellation form but does not have to use it to cancel the contract. If a retailer fails to inform its customer of the customer’s right to cancel, the cancellation right is suspended until the customer is informed. If the customer is not informed at all, the cancellation right continues for a year after the date on which it would normally have ended, which could obviously lead to unwelcome uncertainty on the part of the seller.
Cancellation of the main contract will trigger cancellation of ancillary contracts such as an insurance or maintenance contract for goods. That will be the case even where the ancillary contract is made between the customer and a third party. It will be the retailer’s responsibility to inform the third party of the cancellation.
If customers cancel a distance contract, they now have an obligation to return items to the seller within 14 days of cancellation. Sellers have a reciprocal obligation to refund payments for cancelled contracts without undue delay and, in any event, within 14 days after receiving the goods back or receiving evidence of the goods’ return. The retailer may also be able to deduct an amount for the diminished value of the returned goods due to the handling of the goods by the customer (but only if the retailer has provided the customer with information on the right to cancel the contract).
Digital content forms a new category of goods under the Consumer Contracts Regulations. Given the huge amount of downloadable information now being traded whether as digital music, video or gaming files, in-app purchases or as software upgrades, this comes as no great surprise but the new legislation contains specific rules relating to digital content which require retailers to provide details of technical functionality and any restrictions on the content. The intent is for customers to be able to make an informed decision prior to purchase, which is considered important due to the non-returnable nature of the information once it has been downloaded.
Where digital content is supplied “not on a tangible medium” (so, basically, it is supplied via download rather than on a CD-ROM, flash drive or similar) the service should not be supplied within the 14-day cancellation period unless:
- The consumer has given express consent to the commencement of the service prior to the expiry of the cancellation period; and
- The consumer has acknowledged that his or her right to cancel would be lost.
The customer will also bear no cost for the supply during the normal cancellation period if the confirmation of contract sent by the retailer to the customer does not include confirmation of those consents and acknowledgements.
Where digital content is supplied on a tangible medium such as a flash drive or CD-ROM, the usual cancellation rules do not apply to sealed audio or video recordings or sealed computer software if the goods are unsealed after delivery.
Calls to retailers’ helplines about an existing contract must now be charged at the basic rate as retailers will no longer be allowed to charge only premium rates or revenue-sharing rates for these services. The wording of the legislation states that “a consumer contacting a retailer must not be bound to pay more than the basic rate” so it is possible that retailers will still be allowed to use premium rate numbers but that the basic rate alternative must be communicated at least as prominently as the more expensive rate.
If you have not already done so, it is important to check that your terms and processes comply with the new Consumer Contracts Regulations legislation. The Department for Business Innovation and Skills has published “Implementing Guidance” and we are, of course, available to advise and to revise your terms and conditions.