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Selling to Consumers...

Despite a wealth of consumer protection law, surveys show that consumers are still wary about transactions that are not conducted face-to-face. The Regulations were introduced by Parliament in an effort to boost consumer confidence in "distance selling" and, in particular, e-commerce. So what protection do the Regulations give to consumers?

The Regulations require that:
* prior to entering into a contract, the consumer must be given clear information about the goods or services being offered.
* on entering into a contract, the consumer must be sent confirmation of the contract.
* after entering into a contract, the consumer has a "cooling-off" period during which they can cancel the contract. They also give additional powers to local Trading Standards Departments and the Office of Fair Trading.

Do the Regulations apply to my business?
The Regulations apply to: * all B2C transactions
* made exclusively by means of "distance communication" (i.e. any method of communication where the parties do not deal "face-to-face") * for the supply of goods or services
* under an organised distance sales or service-provision scheme (even if this scheme is only used occasionally).

The Regulations are likely to apply to all transactions not conducted face to face in respect of giftware, toys and homeware. Where the Regulations apply, the contracting parties cannot "opt out" of the Regulations & any contractual term that is inconsistent with the protection provided by the Regulations is void.

Prior Information
Prior to entering into a contract, the Regulations require that the consumer must be given certain information about the goods or services being offered to enable them to decide whether or not to enter into a contract. This information should be provided in a clear and comprehensible manner appropriate to the means of distance communication used.

When providing this information, the supplier should make his commercial purpose clear. In the case of a telephone communication, the identity of the supplier and the commercial purpose of the call should be made clear at the beginning of the conversation with the consumer.

The Regulations also require that the supplier must inform the consumer if he proposes, in the event of the goods or services ordered by the consumer being unavailable, to provide substitute goods or services of equivalent quality and price.

Written Confirmation
The Regulations require that the consumer must be given confirmation of certain information prior to the entering into of a contract and additional information before the conclusion of the transaction in writing or some other durable form available to the consumer. For example, The DTI has indicated that where a consumer places an order by e-mail, e-mail confirmation would be sufficient. This confirmation should be given either prior to the conclusion of the contract or no later than the time of delivery of the goods or during the performance of the services.

The requirement to provide written confirmation does not apply to contracts for the supply of services where such services are to be supplied once only (although the supplier should take all necessary steps to ensure that the consumer can obtain the supplier's address for any complaints).

Performance of the contract
Unless the parties agree otherwise, the supplier must perform the contract within 30 days of the date of the consumer's order. If, for example, goods are not available, the supplier must inform the consumer as soon as possible and refund any sums paid to the consumer within 30 days of the date by which the contract should have been formed.

"Cooling off" Period
The Regulations give the consumer the right to cancel the contract for any reason whatsoever by giving notice to the supplier within a certain time. The aim of this "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.

Where the supplier provides written confirmation of the information required by the Regulation on time, the cooling-off period is 7 working days from the day after the date of receipt of the goods or (in the case of a contract for services) the date the contract was concluded.

Where the supplier provides written confirmation of the information required by the Regulation later than required, but within 3 months of the day after the date on which the goods were received or (in the case of a contract for services) the contract was concluded, the cooling-off period is 7 working days from the day after the date on which the consumer receives such information.

Where the supplier fails to provide written confirmation of the information at all, the cooling-off period is 3 months and 7 working days commencing on the date of receipt of the goods or (in the case of a contract for the supply of services) the date the contract was concluded.

Effect of cancellation
Where the consumer exercises his or her right of cancellation, the supplier must refund any sums paid by the consumer within 30 days of receiving the consumer's notice of cancellation. The supplier may deduct from the refund a charge for the direct cost of returning the goods.

The consumer is not obliged to return the goods to the supplier unless he is asked to do so by the supplier. For a period of 21days from the date of notice of cancellation, the consumer is under a duty to retain possession and take reasonable care of such goods. Where the supplier requests the return of the goods within 21 days of the notice of cancellation and the consumer unreasonably refuses to return the goods the duty of possession and good care continues until they are returned.

The Regulations provide that the relevant enforcement authorities for the purposes of the Regularions are the Director General of Fair Trading and Trading Standards Departments. They are given the power to apply for an injunction against any person who appears to be responsible for a breach of the Regulations to force them to comply and prevent future breaches.

Conclusions
Check your website content, terms and conditions and consumer transaction procedures to ensure compliance and avoid action being taken against you by the OFT.

September/October 2010
issue 61
available now