Organisations selling goods or services to individuals should avoid being stung by new consumer rights laws, says Jeremy Parkin, partner at The Wilkes Partnership.
New regulations, The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which came into force on 13 June 2014, afford consumers with extended cancellation rights and the right to be provided with certain additional pre-contractual information.
Failure to comply with the regulations can mean that customers will be entitled to cancel a contract and to claim a refund over 12 months after the contract was concluded.
The regulations apply to customers who will be classed as ‘consumers’ – if they are acting for purposes wholly or mainly outside their trade, business, craft or profession. Businesses therefore need to carefully assess the identity of their customers and consider whether they are compliant.
Different rights now apply to consumers depending on where and how the relevant contract was concluded. ‘On site’, ‘off site’ and ‘distance’ contracts are dealt with by the regulations separately. In all circumstances, more information must now be provided to consumers, both before and after a contract has been formed. Where contracts are concluded off site (e.g. at a customer’s home) or at distance (online, telephone and mail order), the consumer must have at least 14 days to cancel their order (subject to certain exceptions).
In addition, the regulations require businesses to be more transparent in terms of costs charged to consumers. Pre-ticked boxes on websites through which a consumer might sign up to make additional payments (e.g. a charitable donation or an enhanced delivery charge) are prohibited, and all website buttons which commit customers to making any kind of payment must be clearly marked as such. Consumer telephone helplines charged at a premium rate may also be prohibited in certain circumstances.
Jeremy Parkin comments: “The changes to consumer rights laws are significant, and businesses must be sure that they are complying or risk unexpected claims for cancellation and refunds long after the event. Many of these are to help make things easier and clearer for consumers, while also trying to level the playing field between buying online and in person. It’s vital that businesses remain on the ball when it comes to implementing the changes, with more and more consumers becoming savvier to their rights when purchasing goods.”
The corporate and commercial team at The Wilkes Partnership specialises in advising commercial and not for profit organisations on their terms and conditions and in relation to a wide variety of consumer contracts. In light of the recent changes in the law, the team would strongly recommend those organisations (and in particular those who trade online) should seek legal advice in order to update their terms and conditions and payment processes.