Industry News

New Regulations Set to Change How Websites Sell to Consumers (14th June 2014)

Written by Ann Stanley on 20th June 2014

update to online trading laws

Since the EU passed the new Consumer Rights Directive (CRD) in October 2011, many online retailers have prepared themselves for the changes which are set to come into force on the 14th June 2014. The new regulations where introduced with the sole aim of simplifying consumer rights – specifically those relating to buying and selling.
For a full overview of who will be affected by these changes and what you need to do to ensure you keep in line with the new regulations continue reading.

Who is Affected by the New Consumer Rights Directive (CRD)?

This is split into three main categories – off-premises selling, distance selling and on-premises selling. However, if you’re a website owner selling to consumers then you will probably fall under the distance selling category. For each category there are a set of changes which as an operating trader you need to adhere to.
First off, here is an explanation of each category.

Off Premises Selling

You fall under this category if you;

  1. Confirm a contract between you and the consumer in a place that is not on the business premises – for example, in the consumer’s home or place of work.
  2. Confirm a contract with a consumer (either in the traders’ business premises or via distant communication) shortly after a meeting which was not on the traders premises.
  3. Confirm a contract with a consumer which was made on an excursion organised by you (the trader) with the sole aim of promoting your goods or services.

Distance Selling

You fall under this category if you;

  • Confirm a contract between you and the consumer via distance communication. E.g. over the phone, post or over the internet.

On Premises Selling

You fall under this category if you;

  • Confirm a contract between you and the consumer which is not covered by any of the two contract types previously mentioned. E.G. this is typically contracts which are made on business premises, however if you visit a consumer in their home and leave a quotation allowing them to decide at a later stage this would be considered as ‘on premises selling’.

Who is NOT Affected by the New Regulations?

There are a few industries which are not affected by the new regulations. These include;

  • The construction of new buildings
  • Residential letting contracts
  • Gambling
  • Financial Services
  • Single Telecom Connections
  • Vending Machine Purchases
  • Long-Term Holiday Products & Timeshare
  • Consumables

More details on this can be found here.

What Changes Need to Be Made in Order to Comply with the New Regulations?

Below is an overview of the new regulations which will affect online retailers, ecommerce stores and website owners who sell their services via the internet (please see definitions above to see if you are classified as a distance seller).

Additional Information

The new regulations require all website owners who are classified as ‘distance sellers’ to provide additional information to their consumers. This includes;

  • You need to provide adequate information surrounding the features of the goods, service or digital content you supply. It is stipulated that you need to provide as much information as the means of communication allows you to.
  • You will need to provide a true trading name.
  • You will need to provide a geographical address for the trading business and where applicable you will also need to provide other means of contact available to the consumer. This includes a telephone number, fax number, email address.
  • In the event that you are acting on behalf of another trader you will need to provide their geographical address.
  • If you have a different address for consumer complaints you will need to provide this to the consumer. Should you work on behalf of another trading business that has a different address for consumer complaints you will need to provide this to the consumer.
  • You will need to be transparent about the total price of the goods, service or digital content (inclusive of VAT) to the consumer. In the event that this cannot be calculated in advance you will need to explain to the consumer how you intend to calculate this.
  • You must state all delivery charges or any other costs associated with the purchase of the goods, service or digital content which you are selling. If these cannot be calculated in advance then you must clearly state that there are additional costs.
  • You must state the monthly cost of open-ended contracts or subscriptions to the consumer – or the billing period.
  • If there is any additional cost for using a specific means of communication to make a contract then you need to inform the consumer of this.
  • You must provide information on payment options, payment arrangements, delivery arrangements or performance and the time it takes to deliver your goods, perform the service or supply the digital content.
  • If you have a complaint handling policy in place then there should be a copy made available to consumers.
  • If applicable, you also need to provide the conditions, time limits and procedure for exercising the right to cancel.
  • If the consumer wants to return the goods and you expect them to pay for the delivery cost of returning the goods after cancellation then you must tell them. Furthermore, if the goods which the consumer has purchased cannot be returned by post, you must advise the consumer as to the cost of returning them.
  • If you provide a service and the consumer has asked you to start this service within the cancellation period, then you must inform them that they will be required to pay for the cost of the service that you have delivered up to the point of cancellation.
  • In the event that the consumer has no cancellation rights for specific goods, services or digital content should they cancel, then you need to tell them.
  • For those of you who offer after-sales consumer assistance, services or guarantees then you need to tell the consumer about this.
  • If you are a member of a code of conduct then you must tell the consumers of this.
  • If the consumer is entering into a fixed term contract, a contract with no fixed end or the contract automatically extends then you must inform them of this.
  • If there is a minimum duration under a contract then you must inform them of this.
  • If consumers need to provide a deposit or any other financial guarantee then you need to tell them of this.
  • You must provide information about the digital content functionality you provide, this includes language, duration, file type, access, updates, tracking, internet connection, geographical restrictions and any additional purchases required.
  • You must provide informational about the compatibility of the digital content you provide – this should include hardware and software.
  • You should inform the consumer about any alternative dispute resolution schemes that you are subject to and how they can access them.

Cancellation Period Increased to 14 Days

If a consumer wants to cancel their order then they have two options. They can either withdraw their offer if it has not been accepted by the trader or they can cancel their order within a specific time period.

 

 

Type of ContractCancellation Period Ends
A Service Contract14 days after the day on which the contract was made
The Supply of Digital Content (Not supplied on a tangible medium)14 days after the day on which the contract was made
A sales contract (goods or goods and services)14 days after the day on which the goods come into the physical possession of the consumer or the person that she asks you to deliver the goods to
A sales contract consisting of an order for multiple goods which are delivered on different days14 days after the day on which the last of the goods come into the physical possession of the consumer or the person that she asks you to deliver the goods to
A sales contract consisting of an order for multiple lots or pieces which are delivered on different days14 days after the day on which the last of the lots or pieces come into the physical possession of the consumer or the person that she asks you to deliver the goods to
A sales contract for regular delivery of goods during a period of longer than one day14 days after the day on which the first of the goods come into the physical possession of the consumer or the person that she asks you to deliver the goods to

 

Below is an overview of the new cancellation period.

Further information surrounding this can be found here.

Remove Negative Options for Additional Charges

If there are additional options in the main contract then paying for these additional options must not be the default option. Consumers should always be asked for their consent.

Remove Basic Rate Telephone Charges for Existing Customers

If you have a telephone line for consumers who have an existing contract with you then you cannot charge more than a basic rate for this service. With this in mind, you can only charge normal geographical or mobile rates.
In the instance that a consumer is charged more than the basic rate they are entitled to claim any overcharge back from you.

Delivery Time for Goods

It is your responsibility to deliver the goods that you have sold to a customer, unless it has been agreed otherwise. If a delivery time has not been agreed then it is your responsibility to deliver the goods without delay and no later than 30 days from the day the contract with the consumer was made.
If you refuse to deliver the goods, you fail to deliver within the agreed time frame or the consumer has specified a specific delivery period that you have failed to meet then the consumer is able to request a full refund or terminate the contract.

Passing of Risk

Any goods which you deliver will be your responsibility (risk) until the goods in question are in the possession of the consumer of the individual they have asked the goods to be delivered to. If the consumer organises their own delivery, this is not your responsibility.
With this in mind, if you fail to deliver the goods or the goods are delivered to the wrong person then this is classified as your responsibility, not the consumers.

Inertia Selling

If you send unsolicited goods to potential consumers in the hope of making a sale, then according to the new regulations the consumers do not have to take any action. In other words, they don’t need to inform you if they have received the good, they don’t need to send them back to you – and in fact, they can keep them.
For further information surrounding the new regulations please click here.