Distance Selling Regulations and the new changes

August 3, 2005

The Consumer Protection (Distance Selling) Regulations 2000 came into force on 31 October 2000. They give legal rights to consumers who buy goods or services such as items of clothing by means of distance communication, for example, by phone, mail order, via the Internet or digital TV.  

The protection includes:

  • The right to receive clear information about goods and services before deciding to buy;
  • Confirmation of this information in writing;
  • A cooling off period of seven working days in which the consumer can withdraw from the purchase (there are some exceptions where the cooling off period does not apply);
  • Protection from credit card fraud.
     
    Some changes to the Distance Selling Regulations came into force on 6 April 2005 (The Consumer Protection (Distance Selling) (Amendments) Regulations 2005). The main aim of the changes to the Distance Selling Regulations is to make the cancellation right clearer and more workable for business and consumers. This article summarises the main provisions of the Regulations and highlights the changes that have been made.

Prior information

Merchants need to provide the following information to consumers “in a clear and comprehensive manner appropriate to the means of distance communication used” before the consumer decides to buy:

  • the name of the merchant;
  • a description of the goods or services;
  • the price, including all taxes;
  • delivery costs where they apply;
  • arrangements for payment and delivery;
  • the right to cancel the order (see below for further details);
  • how long the offer or the price remains valid
     
    For example, in the case of items of clothing sold via the Internet, this information is usually set out on an appropriate page on the web site.

Confirmation in writing

When the consumer decides to buy, he/she must be given confirmation of the above information and certain other information in writing or in "another durable medium available and accessible to the consumer". This could easily be satisfied in a confirmatory letter.

Where a letter is impractical, confirmation by email should meet the definition of "another durable medium …" where the order has been made by means of email or over the Web and the consumer has given an email address. 

The additional information required at this stage is:

  • how to exercise the right to cancel, including how to return any goods;
  • the geographical address of the business to which the consumer may address complaints;
  • details of any guarantees or after-sales services;
  • the conditions for exercising any contractual right to cancel, if the contract lasts more than a year or is open-ended.

 
This information must be provided:

  • before the contract is concluded; or
  • after the contract is concluded, in good time and in any event:
  • for services: during the performance of the contract
  • for goods: at the latest when they are delivered

The right to cancel (a cooling-off period)

One of the key provisions of the Distance Selling Regulations is the right to cancel or the cooling off period. The aim of the cooling-off period is to give consumers an opportunity to examine the goods or services being offered, as they would have when buying in a shop. The Distance Selling Regulations give consumers an unconditional right to cancel an order.

Generally, the right to cancel starts the day the contract is concluded and ends seven working days later or, in relation to the supply of goods, seven working days following delivery of the goods. This cancellation period may be extended where the merchant fails to provide the required information (as set out above).

If the consumer decides to cancel, the merchant must refund the money as soon as possible and at the latest within 30 days of receiving written notice of the consumer's decision to cancel.
Consumers cannot cancel:

  • services which have already begun with their agreement. In some cases, it is possible for businesses to try and take advantage of this exception by including terms in their contracts with consumers stating that the consumer agrees that the services will begin immediately (i.e. when the contract is made). By doing this, the consumer loses the right to cancel;
  • goods or services the price of which is dependent on fluctuations in the financial market;
  • goods made to their personal specifications;
  • goods which by reason of their nature cannot be returned (e.g. electricity) or are liable to deteriorate rapidly (e.g. flowers);
  • audio or video recordings or computer software which they have “unsealed”;
  • accommodation, transport, catering or leisure services on a specific date or for a specific period;
  • newspapers, periodicals or magazines; or
  • betting, gaming or lottery services.

Exclusions

The Distance Selling Regulations do not apply to:

  • business-to-business contracts
  • financial services sold at distance. These are covered by the Financial Services (Distance Marketing) Regulations 2004
  • contracts for the sale of land
  • products bought from vending machines
  • goods or services bought at an auction with an auctioneer

Changes to the Distance Selling Regulations

The changes address the requirement for a business to inform the consumer in writing or another durable medium, before the contract is made, that he will not be able to cancel the contract once performance of the services has begun with his agreement.

This created problems for some businesses who receive orders over the phone for services which consumers want to begin straight away or within a day or two. In these situations, compliance was impracticable or disproportionately costly if information needed to be faxed or sent by post / courier urgently. Moreover, the commencement of the services could be delayed.

To address these concerns, the right to cancel has been amended as follows:

(i) The merchant is no longer required to inform the consumer, prior to the conclusion of a contract for services, that he will not be able to cancel once performance of the services has begun with his agreement. Instead, the supplier must, in such cases, 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 after the contract was concluded. This information must be provided prior to or in good time during the performance of the contract.

(ii) Where a merchant provides information as to how the right to cancel may be affected as set out in

(i) before performance of those services begins and the consumer agrees to such performance beginning before the end of the cooling off period, there is no right to cancel.

(iii) Where a merchant provides information as to how the right to cancel may be affected as set out

(i) in good time during the performance of the services, there is a right to cancel even if the consumer agrees to performance beginning within seven working days of the contract being concluded, but the cooling off period begins when the consumer receives the information and ends seven working days later or when performance is completed (whichever is the sooner).

It is hard to see what effect this change will have on the fashion industry as the change only applies to the cancellation of services. If there is distance selling, this is likely to be goods rather than services. However, fashion businesses still need to make sure that they comply with the general requirements of Distance Selling Regulations.


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