Any business which supplies goods or services must ensure it complies with a number of regulations as to the description, quality and suitability of those goods or services, as well as the information it provides to consumers. When selling at a distance, such as via the internet, telephone or mail order, there are a number of extra rules which apply.
Distance Selling Regulations and what they mean to retailers…
The Consumer Protection (Distance Selling) Regulations 2000 and Consumer Protection (Distance Selling) (Amendment) Regulations 2005, (the DSRs), apply to sales made between businesses and consumers which are concluded at a distance. The DSRs provide additional rights to consumers when buying at a distance, as with this kind of transaction, there is no face-to-face contact between the consumer and the seller, and the consumers cannot inspect the goods or services before they buy.
The protection given by the DSRs aims at encouraging consumer confidence by ensuring that all businesses who sell goods or services at a distance meet general, basic requirements.
Businesses selling at a distance must provide consumers with clear information before they can make an informed choice and enter into a contract. The information must include details of the business, a description of the goods or services, the price including all taxes, and details of the payment arrangements and delivery options. This must be followed by written confirmation of the contract (which may be by fax or e-mail).
When selling at a distance, consumers must have a cooling-off period during which they have a right to cancel the contract. Consumers can cancel by informing the business in writing up to seven working days after the day the goods were delivered, or, in the case of services, seven working days after the day the contract was agreed.
However, a consumer will not be able to cancel a contract for services once performance of the services has begun. The supplier must, in these circumstances, provide the consumer with information as to how the right to cancel may be affected if the consumer agrees to performance beginning less than seven working days before the end of the cooling-off period. This information must be provided before, or in good time during, the performance of the contract.
The supplier must reimburse the consumer with any money paid within a maximum of 30 days of receiving notice of cancellation.
There are some exceptions to the rights of cancellation including contracts for the provision of accommodation, transport, catering or leisure activities; where the services are supplied on a specific date or for a specific period; the sale of bespoke goods or perishable goods; and sealed audio, video or software products which have been opened.
Consumers may cancel payments made fraudulently on their payment cards. Section 84(1) of the Consumer Credit Act 1974, which provides that consumers may be liable to the credit provider for up to £50 of their losses when the card is used without the cardholder’s permission, is disapplied in respect of distance-selling contracts.
Exceptions to the rules
The DSRs do not apply to a number of contracts. These exceptions include contracts for financial services, the sale of land for freehold and leasehold interests (the DSRs do, however, apply to short term tenancy or leasehold arrangements between a business and a consumer concluded by distance means), auctions, products bought from automated vending machines or from automated commercial premises (such as photo booths), or business-to-businesses contracts.
Compliance with the DSRs is a legal requirement. The DSRs are enforced by the Office of Fair Trading, local authority trading standards departments inGreat Britainand the Department of Trade,Enterpriseand Investment inNorthern Ireland. These bodies have the power to consider complaints and seek court action for breach and compliance.
Some basic tips for businesses when trading by distance-selling methods include:
- Provide consumers with clear and comprehensive information of the business and the goods or services before they place their order.
- Provide the consumer with a written order confirmation.
- Provide the consumer with details of how and when they can cancel their order and who bears the cost of returning cancelled goods.
- Provide information of any after-sales service and complaints procedure.
For more detailed information and advice on understanding and complying with your obligations under the distance selling regulations you should speak to a solicitor.
This blog was written by Stuart Sproule. Stuart is a solicitor in the Corporate Department at SA Law and deals with all aspects of Corporate and Commercial law. Stuart regularly undertakes the drafting and review of commercial contracts, terms and conditions documentation and loan agreements.
Established in 2005, SA Law is a market-leading law firm. Operating from St Albans in Hertfordshire, it provides businesses and individuals with expert advice and representation.
If you would like more information or advice relating to a specific matter, please do not hesitate to contact Stuart on 01727 798075, by email at email@example.com or connect with him on LinkedIn at http://www.linkedin.com/in/stuartsproule