New distance selling regulations take effect on 13 June 2014
These new Regulations replace the Consumer Protection (Distance Selling Regulations) 2000 and the Cancellation of Contracts made in a Consumers Home or Place of Work Regulations 2008 (known as the Doorstep Selling Regulations).
The new Regulations implement the EU Consumer Rights Directive that brings together a number of disparate existing rules. Currently, European rules on consumer rights are contained in four separate EU directives covering unfair contracts, distance selling, doorstep selling and sales and guarantees, respectively.
As discussed in my latest book, Essential Law for Marketers, the problem with these EU regulations is that they were made in a rather haphazard fashion and many were written almost three decades ago. The Consumer Rights Directive will, it’s hoped, ‘harmonize’ these existing regulations and give consumers more clarity about their rights when buying and selling in Europe.
Broadly speaking, the purpose for the EU Directive is to ensure that customers can be confident about making purchases within Europe, particularly online, and from businesses in other European countries outside of their own.
Under the new Regulations, distance sales remain as contracts where the retailer and purchaser aren’t in the same physical location. The new Regulations also apply to off-premises sales where the buyer and seller are in the same physical location but the location isn’t the business premises of the seller.
Whilst some provisions remain similar to the previous legislation the new Regulations will require some important changes in the way retailers contract with customers.
Cancellation and cooling off
There are now new consumer protection measures relating to the failure to inform customers of their right of cancellation. In such cases, the cancellation period will be suspended until the customer is made aware of their rights.
In the event that the retailer doesn’t inform the customer at all then the cancellation right of the customer is automatically extended a full year beyond the date at which it would’ve ended.
This means that failure to inform customers of their cancellation rights can create considerable periods of uncertainty for retailers over the return of goods.
Some of the other key changes under the new Regulations include a 14 calendar days ‘cooling off’ period that extends the existing statutory 7 days cooling off period for distance contracts.
However, exemptions to the cooling off period still exist for goods that have a short shelf life, like foodstuffs or goods that have been altered or personalised for customers in some way, such a pair of trousers that has been shortened and as a result are incapable of being returned to the merchant.
Confirmation of order
From next month, retailers will also have to provide customers with confirmation of the purchase at the time of delivery or before any service is performed. Whilst this is no different from an instantaneous confirmation email provided by the retailer, retailers should be aware that they need to provide a full description of the goods and services purchased including their characteristics and the full price including tax and any additional charges or delivery prices.
Shopping basket and check-out online
Consumers are also entitled to more information when they shop online. At the shopping basket stage of the order process, retailers must make them fully aware that completing the transaction will result in the order being accepted and a charge will apply.
For online orders, pre-ticked boxes for delivery options above ordinary postage or delivery options won’t be acceptable and shoppers will need to complete these details for themselves.
In all contracts, and unless the customer has expressly agreed otherwise, goods must be delivered within 30 calendar days of purchase.
Right to a refund
Perhaps one of the most far reaching changes made by the Regulations is that retailers like Amazon have a new obligation to refund customers within 14 calendar days of any order being cancelled and correspondingly customers have an obligation to return items within 14 calendar days of such cancellation.
Purchase of MP3 and other digital products online
Electronic content such as MP3 and video purchases are now classified as “digital content” and as such online retailers must now provide details of any technical functionality and any restrictions on the content. The reason behind this is that consumers should have better information in order to make informed purchasing decisions as such digital products are incapable of being returned once these have been downloaded and as a result, the purchase price can’t be refunded.
One of the practices used by some retailers in using premium rate telephone numbers for customer helplines is no longer permitted and customers can only now be charged at the standard rate.