New consumer contracts regulations – is your business prepared?

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New consumer contracts regulations – is your business prepared?

23 Apr 2014

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 will come into force on 13 June 2014, bringing in changes to consumer rights and imposing additional requirements on traders. Businesses will need to be aware of the new provisions and must ensure that their terms and conditions, other documents and processes comply. Documents which are currently in place may need updating, and businesses should be seeking advice on how best to do this to ensure that they are acting in accordance with the requirements of the Regulations.

The Regulations deal with information which a trader must provide to a consumer before and after making a sale. The requirement to provide information will be familiar to traders, and whilst the Regulations in part simply clarify this, they do also impose some new information provisions. For example, when consumers purchase digital content (which is now considered a discrete type of supply, separate from the supply of goods or services) they should now be provided with information regarding which systems or hardware it will work with. Additional detail must also be provided in relation to cancellation rights, return costs, complaints and redress.

Additionally, the Regulations specify that the information to be provided by a trader must be made available in a ‘durable medium’. This term is clearly defined in the new Regulations to mean paper, email or any other medium which can be addressed personally to the recipient and can be stored for future reference and reproduced. Traders will need to review their processes and ensure that they are providing the requisite information to their customers in the appropriate format.

To provide clarity and fairness for consumers, the Regulations now stipulate that express consent must be obtained for additional payments or charges (for example express delivery or other optional extras), and a website with pre-checked boxes will not satisfy this requirement. Additionally, the point at which the consumer actually becomes obliged to pay for the goods must be abundantly clear. As such, websites with ambiguous wording as part of their payment process will need to ensure that updates are made before the Regulations are implemented.

Some traders may already have taken advice and have processes in place which they consider to comply with the above. Therefore, the risk is that they mistakenly believe that the new Regulations simply clarify details of requirements of which they are already aware. However, even businesses which have sought advice with regard to the formation of their consumer contracts relatively recently should be aware that the new Regulations amend the previous provisions meaning that if they do not make updates they will inevitably fall foul of the requirements. For example, the current period in which a consumer can withdraw from a contract, return the goods and receive a refund (known as the ‘cooling off period’), is 7 days from the date of delivery (working or calendar days depending on whether the contract is an ‘off premises’ contract or a ‘distance’ contract). This period will be extended to 14 calendar days from the date of delivery, and traders will need to ensure that they provide for this. Additionally, traders will be required to refund the consumer’s payment within 14 calendar days of receipt of the goods, again amending the previous time period of 30 days.

Traders should also be aware that there is now a specific obligation on them to deliver goods within 30 calendar days. Previously, the goods simply had to be delivered within a ‘reasonable time, unless otherwise agreed’.

The requirements described above are just some of those which will be introduced and updated from 13 June 2014. As such, traders should note the impending deadline for ensuring that their terms and conditions comply with the new Regulations and be aware that advice that they may have sought in the past will not ensure compliance subsequent to their introduction.

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