On 13 June 2014, the Consumer Contracts Regulations 2013 (the “new Regulations”) will come into force, replacing 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). They will apply to all customer contracts for the supply of goods and services.
The new Regulations are intended to become a one-stop shop for the UK’s implementation of the EU Consumer Rights Directive which in turn was intended to harmonize distance selling across the EU.
Under the new Regulations, distance sales remain (as similarly defined in the old rules) as contracts where the seller and buyer are not in the same physical location. The new Regulations also apply to Off-Premises sales, meaning those made where the buyer and seller are in the same physical location but the location is not the business premises of the seller.
Whilst some provisions remain quite similar to the old legislation, the new Regulations will require some important changes in the way retailers contract with customers in preparation for their implementation date on 13 June 2014. Amongst the sanctions relating to breaches of the distance selling rules, failure to inform customers of their right to cancellation will result in the cancellation period being suspended until the customer is made aware of their right and, if the retailer does not inform the customer altogether, the cancellation right is available for a full year after the date it would have normally ended. This means that failure to inform customers of their rights can create considerable periods of uncertainty for retailers over the return of goods.
Some of the other key changes include:
- New cooling off period – The statutory minimum cooling off (cancellation) period for distance contracts is being extended from 7 working days to 14 calendar days. Exemptions to the cooling off period still exist for goods which can expire quickly such as foodstuffs and goods which have been altered or personalised for customers and so are incapable of being returned.
- Confirmation emails – Retailers will need 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.
- Payment buttons – For online orders, the final stage of the order, i.e. the stage which triggers payment, now has to be stated explicitly so that the customer is aware that his/her action will result in the order being complete and a charge being applied. This final stage is commonly done with a button that the customer clicks but labelling of this button or stage will now need to be unambiguous e.g. “buy now”.
- Pre-ticked boxes – For online orders, the new Regulations prohibits the use of pre-ticked boxes for delivery options above standard delivery and other additional payments.
- Reimbursements and returns – For all distance contracts, retailers have a new obligation to refund customers within 14 calendar days of any order being cancelled; customers also have an obligation to return items within 14 calendar days of cancellation.
- Digital content – Under the new Regulations, electronic content such as MP3 and video purchases will constitute a new category of supply known as “digital content”. Importantly, new rules apply to digital content, obliging retailers to provide details of any technical functionality and any restrictions on the content. The intent of the new Regulations is that customers make informed decisions before they purchase any content which, by its nature, cannot be refunded.
- 30 day delivery – In all contracts, and unless the customer has expressly agreed otherwise, goods must be delivered within 30 calendar days of purchase.
- Telephone charges – Premium rate charges for a retailer’s telephone helpline will no longer be permitted; all calls must be charged at the basic rate.
- Risk during delivery – Risk will now pass to the customer only upon delivery of the goods unless the goods are delivered by a courier arranged by the customer. Delivery of the goods remains at the retailer’s risk until the goods are in the physical possession of the customer. Retailers cannot therefore state in their terms and conditions that risk of delivery is borne by the customer.
As can be seen from the key changes above, the new Regulations will likely require changes to website terms and conditions as a well as policies and procedures.