To the extent that you are a consumer-facing business, you will no doubt already be aware that consumer law in the UK is in the midst of being streamlined and updated.
As part of this process, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 -are due to come into force in the United Kingdom on 13 June 2014, replacing the existing law on distance selling and doorstop selling. The Regulations implement the EU Consumer Rights Directive, which is intended to harmonise consumer protection rules across the 28 Member States of the EU.
The Regulations apply to all consumer contracts for goods and services whether made “on-premises” (e.g. in store), “distance” sales (e.g. online or by telephone) or “off-premises” sales (e.g. door to door sales), which are concluded on or after 13 June 2014 (with some limited exemptions).
To the extent that you are a trader selling goods and/or services to consumers, the Regulations will apply to you. Therefore, it is important that you are familiar with the changes being brought in by the Regulations and what this will mean for your business.
What are the key changes?
Some of the key changes under the Regulations are set out below:
- New extensive pre-contract information requirements – The Regulations provide a list of information which traders must provide consumers with before goods or services are purchased, which are more extensive than the existing pre-contract information requirements (in particular, in relation to online sales) and differ depending on whether the sale is made on-premises, off premises or at a distance.
- Length of cooling-off period – For distance sales and off-premises sales, the cancellation period will be extended from the current 7 calendar days (for off-premises) and 7 working days (for distance sales) to 14 calendar days for both to give consumers more time to change their minds.
- Standard cancellation form - The Regulations introduce a model cancellation form which must be provided where the 14 days cooling off period applies for distance sales and off-premises sales. A failure to comply may result in the cancellation period being extended and may even result in prosecution.
- Delivery of goods within 30 days - Unless the trader and consumer agree otherwise (which may be necessary, for example, in the case of bespoke goods), delivery of goods should be without undue delay and in any event within 30 days.
- No additional payments as default option - Traders will need the active consent of the consumer for all payments – pre-ticked boxes for additional payments, for instance, will no longer be permitted. Consumers will not be liable for costs which they have not been told about in advance.
- Digital Content – The Regulations introduce a new concept of -‘digital content’ which is defined as data -‘produced and supplied in digital form’- which includes, for example, music and film downloads. Additional requirements will apply to contracts for digital content, including the requirement to provide purchasers of digital content with information about the functionality of the content and details of the compatibility of the content with hardware and software.
- Helplines - Calls to consumer helplines must be charged at the basic rate, rather than any premium rate.
What action do you need to take?
A failure to comply with the Regulations may result in contracts being unenforceable and even, in the worst case scenario, criminal conviction and/or a fine for the trader affected.
In the circumstances, we strongly recommend that you undertake a review of your practices and terms and conditions, to ensure that you are compliant with the new rules in time for 13 June 2014. Taking a pro-active approach should help you avoid such serious implications and, importantly, consumers will be able to trust in the goods and services they are purchasing from you.