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Selling to customers? Be aware of the new regulations

24 July 2014

It is important that any business which is selling to consumers reviews their terms of sale and websites to ensure that they are compliant with new laws which came into effect on 13 June 2014.

The new laws relate to the selling of goods and services to ‘consumers’ under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (‘2013 Regulations’). These regulations are mandatory and should a business amend its consumer contracts in any way so as to restrict a consumer’s rights under these new rules, then these contracts will not be binding on the consumer.

The 2013 Regulations will apply to sales to “consumers” for goods and services including distance sales, online, and in-store and off-premises sales (where, for example a contract may be concluded in a consumer’s home).

Some key points are:

  • One of the most important requirements of the 2013 Regulations is that the consumer must have the opportunity to read and understand the main elements of the contract fully before buying. Whilst not everything needs to be provided in contract terms, this would seem to be the logical place for certain elements of the information to be placed.
  • Cancellation periods for consumers who are buying at a distance or off-premises should, as a minimum, reflect the new statutory cancellation period, which has been extended from 7 to 14 calendar days.
  • Online suppliers must make it absolutely clear to a consumer when a transaction will trigger a payment eg, use words or symbols such as a click button or similar labelled “obligation with an order to pay”. The BIS Guidance (mentioned below) suggests that a “pay now” button is a suitable alternative.
  •  Unless the business and consumer agree otherwise, delivery of goods should be without undue delay and within 30 days.
  • Premium rate telephone numbers are no longer permitted for a customer service helpline or to discuss an order or problem with a supplied product or service.
  • Businesses cannot impose hidden charges on a consumer and must get express consent from a consumer for any additional payment eg, a business cannot use a pre-ticked box on a website where this leads to a further payment by the consumer.

The 2013 Regulations form part of a series of major changes to consumer law in England and Wales. One of the first changes took place on 1 April 2014 when the Competition and Markets Authority assumed many of the consumer protection functions of the Office of Fair Trading. There is also currently a consumer rights bill before Parliament which will also introduce significant changes, including reforming the law on unfair terms in consumer contracts for goods and services.

We will keep you posted as to any further developments.

Implementing Guidance, a booklet which aims to help businesses understand the scope of the new rules, is also available from the Department for Business, Innovation and Skills (BIS).

Should you need any advice on the 2013 Regulations, please contact our corporate & commercial team.

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Chris Wills LLB (Hons)
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