On 13 June 2014 the new Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the "Regulations") came into force, replacing the Consumer Protection (Distance Selling) Regulations 2000. These introduce some important changes that will affect your business.
Whilst the Regulations also introduce changes for on-premises and off-premises sales, this article is focused solely on distance selling. If you sell goods or services via telephone, post or a website, take note of the following five main changes that will affect your business:
1. Pre-contract information
More information is needed upfront and all information given pre-contract will be deemed to be a term of the contract. Any subsequent changes to the information will therefore require consent and any breach will be a breach of contract as well as the Regulations.
2. Obligation to pay
The consumer must explicitly acknowledge the obligation to pay; if they don't, they don't have to pay! This will also affect pre-ticked boxes in relation to additional costs as all additional charges must have the consumer's "express consent".
3. Post-contract information
You need to confirm all of the pre-contract information after conclusion of the contract in a durable medium within a reasonable time after conclusion of the contract. A link to the website terms and conditions will not suffice.
4. Cancellation rights
The "cooling-off" period in which consumers can cancel the contract without reason has been extended and new rules apply for determining when the cancellation period starts. The consequences under the Regulations are particularly sharp if you do not provide the relevant cancellation rights information. In the worst case, the consumer could have an additional 12 months to cancel the contract. You must also make a cancellation form available to consumers prior to the contract as a method of exercising their right to cancel.
One positive change, however, is that you only need to reimburse consumers once they have returned goods (or provided proof of return).
5. Providing services in the cancellation period
A consumer must make an express request if they want services to start during the cancellation period and even if they make a request they won't lose their right to cancel on the commencement of services. In order to charge for services started during this time, you must make it clear pre-contract that the consumer will be under an obligation to pay for services performed up to cancellation.
This is not an exhaustive list of changes that the Regulations will bring. For more information and advice on how the Consumer Regulations may affect you, please get in touch with Rosanna Biggs, Corporate & Banking or Craig Chaplin, Partner and National Head of Commercial & IP.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.