The festive season is in full swing and whilst retailers are focusing on their busiest time of year, they should also be aware of the impact of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “Regulations”), which came into force on 13 June 2014.
The Regulations afford consumers with a wealth of consumer rights in relation to their purchases, most notably affecting those entered into online. With consumers increasingly purchasing their Christmas gifts online, and with a reported £36.5bn month-long spending spree taking place this December, it is vital that retailers are aware of their obligations under the new Regulations.
New rules applying to online sales
» A minimum 14 day right to cancel
Consumers are now entitled to a minimum 14 calendar day cancellation period in relation to contracts for goods and/or services.
A consumer is not required to provide a retailer with any reason for exercising their right to cancel during this period.
This 14 calendar day period is an increase from the previous 7 working day period provided under the Distance Selling Regulations 2000 (which are no longer in force).
The 14 day period starts from the date on which goods are delivered to the customer, or when the services contract is entered into.
Some exclusions apply to this cancellation period, for example, contracts for personalised goods.
» Obligation to pay buttons
Before a customer places an order, a retailer must obtain the customer’s explicit acknowledgement that the order comes with an obligation to pay. An “order to pay” button will not suffice. Instead, any button or method to pay must be displayed with the wording “order with obligation to pay” or equivalent.
» Delivery of goods within 30 days
Unless retailers and customers have agreed otherwise, any goods must be delivered to the customer without delay, and in any event, no more than 30 days after the contract is entered into.
» Risk of goods
Any goods will remain at the retailer's risk until they come into the physical possession of the customer, or a nominated recipient.
» Express prior consent for additional payments
A retailer cannot charge customers any additional payments relating to a contract, unless the customer has expressively consented to such additional charges prior to entering into the contract.
This is particularly relevant to online selling where customers have to manually opt out for extra services such as gift wrapping or charity donations.
The Regulations make it clear that retailers are prohibited to set any additional payments as default options and therefore cannot rely on customers to de-select “pre-ticked” boxes.
» Basic rate telephone helplines
Retailers who provide “after-sales” telephone helplines to customers cannot charge customers more than the basic rate for the call.
» Confirmation of online contracts
The Regulations impose a new obligation to provide customers with confirmation of online contracts, after the contract has been entered into. Confirmation will need to be provided on a “durable medium” (i.e. by email or by way of hard copy letter).
» Information requirements
The Regulations require retailers to provide customers with certain information prior to online contracts being entered into. As an overview, the following are some of the information requirements which relate to online contracts:
- the identity of the trader;
- the trader’s address;
- the characteristics of the goods and/or services;
- the total price of the goods and/or services;
- additional delivery charges (which must be expressly agreed to by the customer);
- arrangements for payment, delivery and performance; and
- any complaint policy.
The last drummers’ drumming....
The scope of the Regulations are much wider than as summarised above, and affect the vast majority of contracts entered into with consumers, whether these are concluded “in-store”, at the customer’s home, online or over the telephone. Retailers therefore need to understand the extent of consumer rights afforded to their customers. This is particularly important given the potential criminal, civil and contractual sanctions which can be imposed for breaches of UK consumer legislation.