New consumer regulations1 (the “Regulations”) come into force on the 13th June 2014. The Regulations supersede the current law2; for contracts entered into between retailers and consumers on or after 13th June 2014. Retailers should familiarise themselves with the changes that the Regulations will bring and ensure that they update their processes and systems so that they comply. On-line retailers should pay particular attention as there are a number of changes that alter the way that they are required to operate and potential amendments may need to be made to their terms and conditions along with their websites. Some of the key points of the new law are summarised below.
What key changes do the Regulations bring?
Pre-contract information – Businesses selling to consumers must provide certain pre-contract information in accordance with the instructions annexed to the Regulations. The Regulations provide standard pre-contract information for on-premises contracts as well as distance and off-premises contracts. It should be noted that if this information is not provided the trader will commit a criminal offence. If the trader fails to provide the pre-contractual information specified the cancellation period is extended to 12 months.
Helplines should not be provided at a premium – When a trader operates a helpline for customer’s enquiries in relation to their placed orders, the cost of the call should be at the basic rate. Therefore, premium rate 09 numbers and costly 084 and 087 numbers should not be used.
Goods should be delivered without undue delay – The maximum period for delivery is 30 days unless the consumer agrees otherwise.
Cancellation periods increase from 7 days to 14 days – When goods are ordered on-line the minimum cancellation period that must be offered rises from 7 days to 14 days.
Prescribed cancellation form – The Regulations provide a cancellation form that retailers must make available to consumers. This does not need to be provided with every transaction by way of a hard copy however, it should be available for consumers to download on-line from the retailer. Retailers should ensure that the prescribed form is available from the 13th June 2014.
Specific requirements for on-line contracts
When a consumer places an order on-line the retailer should provide the following information in prominent position directly before an order is placed:
- the main characteristics of the goods or service;
- the total price, or if this cannot be determined at the time, the method that will be used for calculating the price;
- information on delivery charges;
- the duration of the contract; and
- retailers must also ensure that the consumer, when placing the order, explicitly acknowledges that the order implies an obligation to pay. Website buttons that need to be pressed by the consumer to place an order need to be clearly labelled ‘order with an obligation to pay’.
The Regulations provide for developments in technology and the sale of digital media on-line. This may include the sale of tangible media such as CD’s and DVD’s as well as non-tangible media such as downloadable software and music. Pre-contractual information for the sale of digital media needs to include the following:
- details of the functionality of digital content, for example, any technical restrictions that may be present; and
- compatibility information should be provided, for example, if the contract is in relation to software, traders should state which operating systems it is compatible with.
Digital media supplied on a tangible medium will be treated as a sales contract and the usual cancellation rules will apply, therefore, the goods would need to be returned to the trader within 14 days. The consumer may lose their right to cancel the contract if sealed audio recordings, video recordings or software is unsealed after delivery.
If the digital content is supplied in a non-tangible form the content should not be made available to the consumer for 14 days unless the consumer consents to immediate delivery and acknowledges that any right to cancel the contract may be lost. It is common for consumers to expect downloadable content to be available immediately therefore, it should be made clear on the website order form that the consumer may forfeit their right to cancel if the goods are to be delivered immediately.
This article produces an overview of the changes that will come into force on the 13th June 2014. For further information on the changes and the affect that they will have on traders and consumers, or for a review of your current terms and conditions, please contact Paul Forsyth.
1 The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
2 Consumer Protection (Distance Selling Regulations 2000) and the Cancellation of Contracts made in a Consumer’s Home or Place of Work Regulations 2008.