How new EU rules will affect distance and door-to-door selling

The EU Consumer Rights Directive will provides a single set of rules for distance selling and contracts formed away from a business’s premises anywhere within the EU. Member states have until the end of 2013 to incorporate them into existing laws so, although no date has been set for their implementation, changes are afoot. The current law on distance selling The law on this subject is contained in the Distance Selling Regulations, which offer protection to consumers who buy goods or services without face-to-face contact, i.e. online or over the phone. You must give consumers clear information, including details of goods or services, delivery arrangements and payment, the supplier’s details and the consumer’s cancellation right before they buy (known as prior information). You must also provide this information in a durable medium i.e. in writing or in downloadable terms and conditions. The consumer has a cooling-off period of seven working days. The regulations give consumers an unconditional right to cancel an order. This allows them the opportunity to examine the goods or consider the service they have purchased. If a consumer cancels an order, written notice must be given to you within seven working days starting after the day on which the goods are received. In the case of services, customers have seven days from the day they agree to go ahead with a contract within which they can cancel. If you fail to provide consumers with written confirmation of all the required information, the cancellation periods can be extended up to a maximum of three months and seven working days. If the missing information is provided during this time, then the cancellation period ends seven working days beginning with the day after the full written confirmation is received by the consumer. What will the Consumer Rights Directive change? The period during which the consumer may cancel will increase from seven working days to 14 calendar days. The withdrawal period starts when goods are received or the service contract commences. A model cancellation form will need to be provided to customers. However, if a customer isn’t informed of this beforehand, the withdrawal period is automatically set at ONE YEAR (currently a failure to inform means the contract is unenforceable). Traders must refund costs within 14 days of receiving notice of withdrawal, but, unless they are collecting the goods, they are entitled to wait for evidence of the return of goods before doing so. If it doesn’t already, the information you provide to customers before a contract is formed will need to include information on the duration of the contract, the total cost including existence of deposits or financial guarantees which may be payable, and the customer’s responsibility for the cost of returns. Such information must be provided in an electronic format and in plain language – not legal jargon! If you don’t make it clear who will be responsible for the cost of returning the goods, you will be responsible. Refunds must also be given within 14 calendar days. Online traders will have to disclose the total cost of a product or service, as well as any extra fees. Customers will not have to pay charges or other costs if they were not properly informed before they place an order. When shopping online, customers are often offered additional options during the purchase process, such as insurance cover. These additional services may be offered next to ‘pre-ticked’ boxes. Consumers are currently often forced to un-tick those boxes if they do not want these extra services, but under the new rule, ‘pre-ticking’ will be banned. This is aimed at larger organisations, such as airlines and car hire companies, but small businesses must comply too. Businesses will not be able to charge consumers more for paying by credit card (or other means of payment) than what it actually costs the business to offer such means of payment. Businesses that operate telephone hotlines allowing the consumer to contact them in relation to the contract will not be able charge more than the basic telephone rate for the telephone calls. If you sell digital products, such as software or online courses, you will have to provide information about compatibility, but customers will only have a right to withdraw from purchases up until the moment the actual downloading process begins. If you sell online or over the phone, you will need to review your sales policies and standard customer terms and conditions before the changes become law. You should also make sure that they are clearly accessible from your website. For further advice on this subject, members of the Forum can call our helpline on 0845 130 1722.
The EU Consumer Rights Directive will mean big changes for businesses that sell online, over the phone, on the street or door-to-door.