Changes In Law: Distance Selling Of Goods To Consumers

Do you supply goods, services or digital content to consumers online or on the telephone? If so, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 will affect your business. Coming into force last month, the changes in the law also affect mobile transactions.  

In this briefing note, we set out some of the changes you should be aware of. We would, of course, be happy to discuss with you in more detail how the Regulations impact on your business, if necessary.

One of the most spotlight-worthy changes brought about by the Regulations is customers’ entitlement to a 14-calendar-day cooling-off period, during which they are able to change their minds, cancel the contract and receive a full refund, whether or not the product purchased is defective.

Another notable element of the Regulations is the requirement that your customers be asked to acknowledge, when placing an online order, that they have an obligation to pay. If your website facilitates purchases using a click button for customers to make payment, this should be clearly labelled "order with an obligation to pay" or similar wording to this effect.

Unless you’ve had a consumer’s express consent to charges, your website cannot incorporate default pre-ticked boxes authorising additional payments (e.g. payments for extended warranty protection).

The Regulations also introduce the requirement to provide customers with certain information, not least details concerning cancellations and returns.

Your business is further obliged to confirm the contract to the consumer on a so-called durable medium. This can be via e-mail, a physical copy through the post or in another medium that allows the information to be addressed personally to the recipient and allows them to save it (and reproduce it without changes). The relevant information will, in all likelihood, already be set out in your website Terms and Conditions but you should bear in mind that such Terms and Conditions are unlikely to constitute a ‘durable medium’ (they are generic and are not addressed to an individual recipient). And so, a post-transaction confirmatory email, detailing the relevant requisite information, will also be necessary.

Note, where the contract is for the supply of digital content that is not on a tangible medium and your customer has given consent to its digital delivery prior to the expiry of the cooling-off period, you must also set out the confirmation of this consent as well as an acknowledgement that the customer’s cancellation rights expire upon delivery of that digital content.

To enable consumers easily to cancel contracts, your website must set out a model cancellation form, for use by your customers in the event of exercise of their right to cancel.

The sanctions for failing to comply with the Regulations include your business having to bear certain costs habitually borne by customers (such as additional delivery costs), the extension of cancellation rights to 12 months and the contract being held as not binding altogether. There’s also the reputation of your business to consider and the impact any bad publicity may have on its image, particularly in this day and age of viral complaint tweets.

We would therefore recommend that you consider how the Regulations may impact on your business and whether changes should be made in order to ensure compliance (e.g. amending the Terms and Conditions, payment page on your website and confirmatory email formats).

For further information or advice contact, please contact Mark Openshaw-Blower by email or 0161 833 1212.