20th May 2014

New consumer protection – Part 2


20th May 2014

New consumer protection – Part 2

This is our second blog post on The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“New Regulations”). For our first blog focusing on the new provisions relating to cancellation of a distance contract by the consumer please see here.

This second blog looks at the other key provisions contained within the New Regulations:

Pre-contract information and confirmation of purchase

The information to be provided to the consumer prior to a distance contract being entered into is more extensive under the New Regulations and traders must provide customers with confirmation of purchase within a reasonable time once the contract has been entered into (and before delivery or any service is provided). This must include a full description of the goods and the full price including any additional charges.

Payment buttons

For online orders, the final stage of the order which triggers payment must be clear and unambiguous so that the consumer is aware that his/her action will result in the order being complete and a charge being applied. For example, the final button must be labelled “buy now” or “order with obligation to pay.” Failure to do so will result in the consumer not being bound by the contract.

Pre-ticked boxes 

Traders must seek the consumer’s express prior consent before taking additional payments and therefore the use of pre-ticked boxes when placing orders online for delivery options above standard delivery and other additional payments will be prohibited.

Telephone charges

Premium rate charges for a retailer’s telephone helpline will no longer be permitted; all calls must be charged at the basic rate.

30 day delivery

Unless the consumer agrees otherwise, the trader must deliver any goods purchased within 30 day calendar days.

Risk during delivery

Risk will now pass to the customer only upon delivery of the goods, unless the goods are delivered by a courier arranged by the customer. Delivery of the goods remains at the retailer’s risk until the goods are in the physical possession of the customer. Retailers cannot therefore state in their terms and conditions that risk of delivery is borne by the customer.

Digital content

For the first time a new concept of digital content (such as downloads) is introduced into UK law and distinguishes the supply of digital content from the supply of goods or services.

If the contract is for the supply of digital content, the trader can only start supplying the digital content during the cooling off period if the consumer has (i) expressly consented, and (ii) acknowledged that he will lose the right to cancel. Retailers will also be obliged to provide details of any technical functionality and any restrictions on the content before the purchase is made.

Our advice

In order to prepare for 13 June businesses should review, in particular, their online order processes for compliance with the New Regulations. Tweaks will inevitably need to be made to policies and procedures and to website terms and conditions in order to avoid failing to give consumers the correct information in a clear and unambiguous manner.

Implications for businesses

A failure to comply with the New Regulations may result in a business facing a criminal conviction and/or a fine. Depending on the type of breach, the contract with the consumer may also be invalid. Combined with the obvious reputational damage, the consequences of non-compliance may be severe. It is however hoped that the New Regulations will make cross-border trading easier by making the laws applicable to consumers more consistent throughout the EU.

If you would like any further information about the New Regulations please contact Crispin Dick or myself.