The Office of Fair Trading (OFT) has written to 62 of the top online retailers after a websweep carried out earlier this year indicated that many of them might not be compliant with consumer protection law.
The websweep suggests that there is still some way for retailers to go to ensure compliance with the law and the OFT has highlighted its particular concerns around the provision of contact details, application of hidden charges and consumers' rights to a refund.
Websweeps are used by the OFT to investigate online retailers’ compliance with consumer protection law. In this most recent websweep, the top 100 online retail websites together with top clothing etailers were assessed for compliance with The Consumer Protection (Distance Selling) Regulations 2000 (DSRs) and The Electronic Commerce (EC Directive) Regulations 2002 (ECRs).
The DSRs apply to all business-to-customer sales of goods and/or services where there is no face-to-face contact. The ECRs apply to the provision of certain goods and/or services by means of the Internet, email, interactive TV or phone texting.
In May 2011, the OFT launched a ‘Distance Selling Hub’ which offers information and guidance to businesses on both the DSRs and ECRs (including, for instance, how and when the regulations apply and what practices should be put in place to ensure compliance). The purpose of the websweep, which was conducted in February 2012, was to measure compliance with the DSRs and ECRs after the launch of the Hub.
The OFT’s findings show improved compliance in many areas, but there are still some areas of neglect:
- Insufficient contact details: Websites must include the retailer’s email address, but only 38% of the websites assessed did so. 60% of websites contained only a web contact form (which does not meet the requirements of the ECRs) and 2% did not provide any electronic contact details at all.
- Hidden charges: Consumers should be informed about additional compulsory charges up front. However, in 24% of the websites assessed, reviewers found charges that they did not expect (usually credit card and delivery fees or travel related charges). Further, while 60% of the websites warned of additional charges when the price was first quoted, 72% included charges above that first price so it appears that not all sites are providing complete information on charges at the outset.
- Rights to a refund: Consumers have certain rights to cancel and to a refund. Almost all relevant websites contained information on this right, but a third of them imposed unreasonable restrictions on this. These included returning the product in its original packaging, in original condition or in a resalable or unused state, all of which potentially limit the customer’s right to reasonably inspect and assess the product.
On the back of these findings, the OFT has written to 62 of the retailers assessed to highlight its concerns.
Issues to consider
The websweep serves as both a useful reminder to businesses’ of their key obligations and the OFT’s continuing intention to police compliance with consumer protection laws.
- Are you compliant or would your website be found wanting if assessed? Retailers may attract unwanted negative publicity and regulatory attention, and find themselves investing unexpected time and cost, if a complaint is made and their websites are non-compliant (which could be particularly disruptive, and a significant risk, during the busy Christmas period).
- Have you visited the Hub? Non-compliant businesses might be judged more harshly in future now that this resource is available.
- Are you one of the 62 retailers? If so, update your website as soon as possible and certainly within the timeframe given. Failure to comply with the law carries with it the risk of formal enforcement action by the OFT or Trading Standards, which could include proceedings in the civil courts and criminal sanctions.