Consumer Contracts: The Consumer Protection (Distance Selling) Regulations 2000

Transcription

1 Consumer Contracts: The Consumer Protection (Distance Selling) Regulations 2000

2 Preliminary With an increasing emphasis on on-line sales these Regulations that derive from EU law are becoming more important. If you sell online, you should consider your terms of business in the light of these Regulations The Consumer Protection (Distance Selling) Regulations 2000 ( Regulations ) implement EU Directive 97/7/EC in the UK. The Regulations apply if you are selling products or services to consumers without face-to-face contact, and where the consumer has not had an opportunity to examine the goods before buying or to discuss the service in person. Relevant Definitions For the purposes of the Regulations, the following definitions apply: Consumer: any natural person who, in contracts to which these Regulations apply, is acting for purposes which are outside of his business. (A company, however small, does not benefit from the protection afforded by these Regulations); Supplier: any person who, in contracts to which these Regulations apply, is acting in his commercial or professional capacity ; Distance Contract: any contract concerning goods or services concluded between a Supplier and a Consumer under an organised distance sales or service provision scheme run by the Supplier who, for the purpose of the contract, makes exclusive use of one or more Means of Distance Communication up to and including the moment at which the contract is concluded ; and Means of Distance Communication: any means which, without the simultaneous physical presence of the Supplier and the Consumer, may be used for the conclusion of a contract between those parties. (An indicative list of means communication is provided in Schedule 1 to the Regulations and includes letters, catalogues, radio, telephone with or without human intervention, , fax and television). Scope of the Regulations The Regulations apply to all Distance Contracts other than Excepted Contracts. Excepted Contracts are listed in Reg. 5(1) and includes contracts which: are for the sale or other disposition of an interest in land (except a rental agreement); are concluded at an auction; are concluded with a telecommunications operator through the use of a public pay-phone; or relate to financial services, a nonexhaustive list of which is contained in Schedule 2 to the Regulations and includes the following: o investment services; o insurance and reinsurance options; o banking services; and o services relating to dealing in futures or options. (Note: the Financial Services (Distance Marketing) Regulations and/or the Consumer Credit Act 1974 will likely apply instead). Furthermore, Regs. 7 to 20 will not apply to timeshare agreements and Regs. 7 to 19(1) will not apply to contracts for the supply of food, beverages or other goods for everyday consumption supplied to the consumer by regular roundsmen, or to contracts for the provision of accommodation, transport, catering or leisure services where the supplier undertakes to provide the services on a specific date or within a specific period. Required Information Regulations 7 and 8 impose an obligation on a Supplier to provide a Consumer with specific information in good time prior to the conclusion of the contract. This includes: the identity of the Supplier and its address where payment is required in advance; a description of the main characteristics of the goods/services; the price including taxes; any delivery costs where appropriate; the arrangements for payment, delivery or performance; information regarding the Consumer s right to cancel where applicable; the cost of using the Means of Distance Communication where it is calculated other than at the basic rate; the period for which the offer / price remains valid; the minimum duration of the contract where the supply of goods or services is to be performed permanently or recurrently; and information about providing substitute goods, including that the cost of returning these goods in the event of cancellation by the Consumer would be met by the Supplier. Required written information The first 6 points above should be provided to the Consumer in writing, or in another durable medium available and accessible to the Consumer. The following should also be provided in writing: information about the conditions and procedures for exercising the Consumer s right to cancel; the address to which the Consumer can send complaints;

3 information about any after-sales services and guarantees; and the conditions for exercising any contractual right to cancel the contract. Cancellation Period The Regulations provide a Consumer with an unconditional right to a cooling off period during which the Consumer can give the supplier a notice of cancellation. This will operate to cancel the agreement (see Regs ). When this period ends depends upon when the Supplier has provided the required written information. The time limits are also different as between goods and services. Goods (Reg. 12) For goods, the cancellation period begins on the day the contract is concluded and ends: 7 working days beginning the day after the day the consumer receives the goods where the required written information is provided on or before the day the contract is concluded; 7 working days beginning after the day the required written information is provided where the required written information is not provided at the time of delivery, but is provided within 3 months of the goods being delivered; or 3 months and 7 days from the day after the day the consumer receives the goods if the required written information is not provided at all, or after the 3 month period mentioned above. Services (Reg. 13) For services, the cancellation period begins on the day the contract is concluded and ends: 7 working days beginning with the day after the day on which the contract is concluded where the required written information is provided on or before the day the contract is concluded; 7 working days beginning with the day after the information was received where the required written information was provided within 3 months of the contract being concluded; 3 months and 7 days from the day after the day on which the contract was concluded where the required information was not provided at all. Exceptions to the right to cancel There are certain exceptions to the consumer s right to cancel under Reg. 13. Unless a Supplier and a Consumer have agreed otherwise a Consumer will not have the right to cancel pursuant to Reg. 10 in respect of contracts: for the supply of services where the Supplier has informed the Consumer in writing that, unless the parties agree otherwise, the Reg. 10 right will not apply, and, the Consumer has agreed to the supplier beginning performance of the Contract before the Reg. 12 applicable period; for the supply of goods / services the price of which depends on fluctuations in the financial market; for the supply of goods made to the Consumer s specifications or clearly personalised or which by nature cannot be returned or are likely to deteriorate or expire rapidly; for audio/video recordings or computer software if they are unsealed by the Consumer; for newspapers, periodicals or magazines; and for gaming, betting or lottery services. Refunds and returning goods Where a Consumer exercises their right to cancel, the Supplier must refund all sums paid by the Consumer, under or in relation to the contract, as soon as possible and within the period of 30 days beginning with the day the notice of cancellation was given. Following cancellation, only where it is written in the contract can a Supplier require a Consumer to pay for the costs of retuning any goods supplied. This does not apply where the Consumer cancels because he has the right to reject the goods by virtue for example of a term implied by statute, or where the term would be unfair under the Unfair Terms in Consumer Contracts Regulations 1999, or where the goods to be returned are substitutes for the goods actually ordered. Performance Under Reg. 19, unless agreed otherwise, the Supplier shall perform the contract within a maximum of 30 days beginning with the day after the day that the Consumer sent his order to the Supplier. Where the Supplier is unable to perform the contract because the goods/services are not available, then, within the same period, the Supplier must inform the Consumer and reimburse any sums paid by the Consumer under or in relation to the contract. Compliance and Enforcement The Regulations cannot be excluded. A term contained in any contract to which the Regulations apply is void if it is inconsistent with a provision for a Consumer s protection contained in the Regulations (Reg. 25(1)). It is the duty of the enforcement authority (primarily the Office of Fair Trading ( OFT )) to consider any complaint made to it about a breach of the Regulations unless the complaint appears frivolous or vexatious or another enforcement authority will be

4 considering the complaint. Further information The OFT have published guidance on the Regulations entitled a short guide for business on distance selling available at This guidance is indicative only and not binding. For further information regarding the rights of consumers, you may also find our fact sheet Consumer contracts: the Unfair Terms Since engaging Everyman Legal we have put in place an agreed legal framework for ownership succession. My company is now positioned for growth. Charles Purdy CEO of Smart Currency Exchange

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