New rules on consumer contracts have recently come into force in the UK, requiring retailers to meet new EU standards on the information they must give shoppers.
On 13 June 2014, the Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013 came into force in the UK, implementing the Consumer Rights Directive (2011/83/EU).
The new rules provide further obligations and restrictions upon both traders and consumers. It is envisaged that the Regulations should provide more certainty for both parties by consolidation and simplification of the rules surrounding consumer contracts.
As a trader, it is important for you to consider whether your consumer contract falls within the scope of the Regulations and whether it is compliant. Failure to do so can have a significant effect on the enforceability of your contracts and can even, in some cases, result in an extension of the cancellation period to 12 months!
Which Contracts Do The Regulations Apply To?
The Regulations apply to consumer contracts made on or after the 13 June 2014, including contracts made on-premises (e.g. in store), off-premises (e.g. doorstep) and at a distance (e.g. online), subject to certain exceptions.
What Are The Key Changes?
Restriction of Excessive Charges:
- Express consent must be provided by the consumer for any additional payments i.e. you should not use pre-ticked boxes in online transactions.
- Traders must provide a non-premium rate telephone line for consumers to contact once the contract has concluded.
Pre-Contract Information:
- The list of detailed information that must be provided to the consumer before they enter into the contract has been extended.
- Failure to do so can result in the cancellation period extending up to 54 weeks in favour of the consumer.
- In off-premises and distance contracts, traders will be obliged to make it very clear to the consumer that, by proceeding with the contract or transaction, they will be obliged to pay for the goods or services e.g. label the order button with “obligation to pay”.
Digital Content Concept:
- The Regulations have now introduced the concept of digital content into UK law e.g. downloadable goods such as music and books will be covered by the Regulations.
- With this, there are new specific rules regarding the cancellation of supply contracts for digital content that is not on a tangible medium.
Cancellation and Delivery:
- The “cooling off” period has been extended to 14 calendar days from the previous 7 days for off-premises and distance contracts.
- Cancellation of an off-premises or distance contract where delivery charges were paid by the consumer will mean that the consumer can claim a refund for delivery charges they paid. However, this is limited to the cost of the least expensive common and generally acceptable kind of delivery, even if the consumer actually paid more for express delivery for example.
- There is now a requirement to provide the consumer with a model cancellation form if they have a right to cancel.
- In off-premises and distance contracts, consumers are obliged to return goods within 14 calendar days of cancelling the contract and the trader has the right to withhold the refund until receipt of the goods.
- Furthermore, if the returned goods have diminished in value, the trader can legally deduct an amount from the refund.
- Goods should be delivered without delay, i.e. within 30 days, unless the consumer agrees otherwise.
Our Corporate team is working with clients to incorporate the changes into their terms and conditions for on and off premises contracts and distance contracts. Our corporate team can be contacted on 01872 265100 or email corporate.cornwall@stephens-scown.co.uk
Our IP & IT team are working with clients to develop and protect their digital mediums. Contact them on 01392 210700 or email ip.it@stephens-scown.co.uk