Age Verification

February 3, 2009

Retailers have long been held responsible for ensuring that they do not allow certain goods to fall into the hands of minors. Due to the apparent ease with which under-18s are able to circumvent age restrictions by using e-commerce sites, proposals have been made to extend age verification obligations to e-businesses. We outline the proposals and consider other issues relating to age verification.

Why do you need age verification?

• The sale of certain goods / services is subject to legal age restrictions – such as alcohol, tobacco, gambling, solvents, etc.
• Contracts with minors (persons under 18 years of age) are unenforceable – see below
• In recognition of social responsibility

Unenforceability of contracts

It is a principle of common law that a minor does not have the legal capacity to carry out a legally effective act. Minors cannot, for example, make valid wills; they cannot give a receipt; they cannot give a valid consent. The capacity to act on a minor's behalf is vested in the minor's parent or guardian.

At common law, a contract entered into by a minor is generally voidable by the minor but remains binding on the other party (i.e. the contract is valid but the minor can get out of it).  If the minor does elect to cancel the contract, the court may at its discretion order the minor to return to the supplier any goods or, by analogy, services to which the contract relates.

If the minor does not avoid the contract, the adult will be bound by it. The minor may sue on it, either through an adult on their behalf while still a minor, or in their own right on reaching the age of 18.

Contracts that are obviously prejudicial to the minor, or contain onerous terms, are not voidable but wholly void. For example, a minor cannot commit to repay a loan. That is why banks don't give minors overdrafts or credit cards. This is also clearly a hazard for e-commerce businesses who provide content or services to a teen or pre-teen audience.

There is an exception to the rule that contracts with minors are voidable. A minor may validly contract to receive 'necessaries' - i.e. goods 'suitable to the condition in life of' the minor and to his or her 'actual requirements' at the time of the sale and delivery.

The position is different in Scotland. Under the Age of Legal Capacity (Scotland) Act 1991, children in Scotland achieve legal capacity at the age of 16, and a child under that age may enter into binding contracts that are “of a kind commonly entered into by persons of his age and circumstances” and “reasonable”.

The Online Purchasing of Goods and Services (Age Verification) Bill

A Bill was presented to the House of Commons on 22 January 2008 in response to an increasing number of cases which have exposed the ease with which children under 18 can purchase alcohol or pornography or gamble on the Internet.

The Online Purchasing of Goods and Services (Age Verification) Bill 2007-08 was introduced under the Ten Minute Rule Bill procedure by Margaret Moran, the Labour MP for Luton South. It was granted a Second Reading on 16 May 2008 and ordered to be printed. The second reading never materialised but some progress has been made with the Bill being re-introduced to the House of Lords on 14 January 2009 by Baroness Massey of Darwen. The first reading is a formality which signals the beginning of the Bill’s journey through the House of Lords. The second reading which has yet to be scheduled will be the first debate on all general aspects of the Bill.

Although the Bill has little chance of becoming law, this is said to be the first time a politician in Europe has called for online age and identity verification to be put on the statute books and Moran's proposals aim to ensure anyone selling age-restricted goods and services over the Internet has to take steps to verify if customers are old enough.

One recent investigation exposed how a loophole in the law allowed children as young as 14 to get their hands on pre-pay credit cards. These enabled them to sign up for bingo sites and purchase knives, alcohol and pornography. Many online retailers simply ask customers to confirm their age by ticking a box and take no other measures to verify whether or not the person meets the criterion. The proposed Bill would outlaw this practice and compel retailers to take positive steps to ensure compliance.

The Bill would make it a requirement for the providers of goods and services to take reasonable steps, in certain circumstances, to establish the age of customers making such purchases remotely.

In days of old, retailers had a comparatively easy job when it came to the sale of age-restricted goods and services such as alcohol, tobacco, gambling, solvents and so on. If there was any doubt about a person’s age, they could ask for identification and, if necessary, decline to sell the goods or services. The consequences of getting it wrong could be dire. A bookie or a landlord could be fined, lose their licence or worse; a cinema or nightclub could be closed down.

The growth of the internet and e-commerce, however, has meant that the same goods and services can now be bought online. With that has come a loophole that urgently needs to be addressed—namely, that there are most often no checks online, thus enabling children to buy age-restricted goods. The Bill would require online retailers and those who facilitate such purchases—for instance, via pre-payment cards—to take positive steps to ensure age compliance.

The Gambling Act 2006, which came into force last September, specifically requires online gambling companies to implement an age verification service that is in no way dependent on the method of payment being used. Accordingly, in relation to gambling, it is not acceptable simply to ask people to confirm their age and companies are required to verify that their customers are over 18.

The online gaming industry has already proved that they can enable instant customer age verification during the online transaction without incurring significant additional costs and without harming the customer’s experience.

It is clear that very few online retailers have procedures or software in place to prevent the sale of age-restricted goods to children. Self-regulation is apparently not working. Asking people simply to tick a box to confirm that they are a certain age would not be acceptable in a shop - especially where there was reason to believe otherwise. Why should it be different online?


Related pages:

Online regulation and terms & conditions more

Technology, Media & Digital more

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