Today’s post comes from Aimee Marsh, who graduated from the UEA Law School in 2005, and works for Norfolk solicitors Metcalfe Copeman & Pettefar LLP who offer legal advice and guidance covering a wide range of business issues. Aimee can be contacted on 01842 756139 or firstname.lastname@example.org
Selling goods and services via the internet is becoming increasingly valuable, especially for new businesses. It allows trade all over the country and abroad from an office no bigger than a shoebox. Marketing online couldn’t be easier, particularly with customers able about to tweet about excellent customer service they have received. And best of all; very limited overheads.
But there are always difficult customers. There’s no escaping them. What’s even worse is the difficult customer who knows their rights! It’s always better to be one step ahead.
Consumer rights can often be baffling and there are quite a few rules and regulations that apply. One particular set of regulations that can often catch out the unsuspecting online trader are The Consumer Protection (Distance Selling) Regulations 2000. They are regulations “with teeth”; they can be enforced by the Office of Fair Trading and local authority Trading Standards.
The Regulations apply where a contract is made between a business and a consumer (eg an individual acting outside any business) at a distance (eg sales made via email, the internet, telephone, by letter etc). The Regulations can apply to both the supply of goods and services.
Although there are various requirements of the Regulations, we have concentrated here on two key aspects:-
1. The information that must be given to the customer; and
2. The customer’s rights to cancel the contract.
The Regulations require various pieces of information to be given to the customer before and within good time after the contract is made. A lot of the information must also be provided in a durable format (eg one which can’t later be amended, which often means, for example, that terms and conditions placed on a website only are not enough to ensure compliance with the Regulations). The information to be given includes the full name of the business, its address and VAT registration number (note that in respect of companies, The Companies (Trading Disclosures) Regulations 2008 require further details to be noted, including company number and registered office). There must also be a description of the goods/services being supplied and details as to arrangements for payment and delivery. Information about the customer’s right to cancel the contract must also be made available.
Customer’s right to cancel the contract
When goods/services are sold at a distance, the customer will not have had a chance to check them before they make a contract to order. The Regulations therefore seek to protect the customer and give them a right to cancel the contract, without the need to give a reason. After the contract has been made (and provided the required information has been provided to the customer before the contract was made), the customer will generally have seven working days after they receive the goods to cancel the contract. Where services have been ordered, the customer will generally have seven working days to cancel from the time the contract was made. Please note there are variations to the cancellation periods in certain circumstances (including, for example, if the required information is provided to the customer later).
If the contract is cancelled, then the business will need to give a refund to the customer. The business might also need to pay for the cost of having the goods returned to them unless their terms and conditions say that the customer must pay for this (but note that the customer cannot be charged if the goods are faulty and/or other statutory protection for the customer applies).
This all seems simple enough but can lead to some unexpected results. How about the brand new car bought over the internet; the new owner decides they don’t like it after all and decides to cancel the contract after three days and return the car. The car dealer could be required to refund the purchase price of the new car to the buyer and take the car back, even though it has lost value and is now in effect a second-hand car.
The Regulations are a potential minefield for the unwary; they can apply to you even if you are a sole trader. Make sure you have your terms and conditions and business practices reviewed to ensure your business is complaint; that might save you from potentially costly disputes with grumpy customers and investigations by Trading Standards!
Please note that the above is a summary only and is not a comprehensive or complete statement of the applicable law. There are other requirements of the Regulations as well as certain exceptions which are not set out here. New legislation is likely to be in place by July 2014 which may amend or replace these Regulations. Legal advice specific to your circumstances should be sought.