Changes in the way retailers sell to consumers


Author: Eddie Powell, Alan Wetterhahn


2014 is the “Year of the Consumer” and the UK Government is implementing a raft of new legislation which is aimed at giving greater rights to consumers, who will benefit from increased transparency and further information when purchasing goods or services online.

The new regulations apply to “distance selling” contracts (where a trader and consumer are not physically in the same place at the same time i.e. website sales contracts), “off-premises” contracts where the trader and the consumer conclude the sales contract at a place which is not the business premises of the seller (i.e. doorstep sales) and finally, “on-premises” contracts. Essentially, if you are a trader selling goods, services or digital content to consumers (but not in the context of B2B sales) then the new regulations will apply to you.

Whilst the changes take effect from 13 June 2014 (and before the panic sets in) it is worth noting that a lot of the changes do not alter the current requirements significantly.

In summary, the key changes to note are as follows:

  1. Pre-contract information: specific information must be provided to the consumer before the consumer is bound by the contract to buy goods or services. This includes, for example: the main characteristics of the goods/services; the identity of the trader; the total price of the goods/services inclusive of taxes and additional costs; where digital content is supplied, the functionality and interoperability of the content; and the consumer’s right of withdrawal.
  2. Consumer’s right to cancel and “cooling-off” period: a consumer now has 14 calendar days within which to withdraw from either a distance sales or an off-premises sales contract. A consumer can withdraw at no cost and consumers do not need to provide any reasons for the withdrawal. The withdrawal position is the same across the EU. There is also a model withdrawal form which must be made available to the consumer at the time the contract is concluded.
  3. Refunds and returns: the consumer now has better refund rights and a trader must reimburse to the consumer all monies received under the contract (including standard outbound delivery costs) within 14 days of receiving the goods back. If pre-contract information on the rights relating to returns has not been provided, the trader has to pay for the return of the goods, but if the correct pre-contract information was given, the consumer can be required to pay this cost. The trader is also entitled to charge the consumer if the value of the goods has been affected as a result of the consumer’s handling of the goods (i.e. where the goods have been handled over and beyond what the consumer could normally do in a shop).
  4. No default tick boxes: the ban relates to additional services which result in the consumer incurring additional costs and the consumer will be entitled to a refund where they did not agree to such unauthorised additional payments.
  5. No hidden charges: there is a drive towards increased price transparency and hidden charges will not be tolerated under the new legislation. Therefore no excessive payment surcharges can be imposed on the consumer, nor should the consumer be charged for using premium rate telephone lines if contacting the trader.

If you have any queries relating to the above, please feel free to contact either Eddie Powell (020 3036 7362) or Alan Wetterhahn (020 3036 7309) and we would be happy to give you some further information. Eddie is also hosting a seminar on Tuesday 17 June 2014 outlining the key rules which govern e-commerce transactions. Please contact our marketing team (020 3036 7147) if you would like to attend.

Eddie Powell, Partner, Fladgate LLP (epowell@fladgate.com)

Alan Wetterhahn, Partner, Fladgate LLP (awetterhahn@fladgate.com)

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