New Consumer Contracts Regulations

On 13th June 2014 the law changes on consumer contracts and distance selling. The Distance Selling Regulations and the Doorstep Selling Regulations are replaced by The Consumer Contracts Regulations 2013. The concepts remain broadly the same, but the difference is now between “on-premises”, “distance” and “off-premises” contracts. This doesn’t apply to commercial contracts or to normal over the counter shops sales where the customer takes the product away, and there are a series of exemptions.

There are new obligations which apply to all consumer contracts. These include:

  • Traders must, unless the consumer agrees otherwise, deliver any goods purchased within 30 calendar days.
  • Traders must not make the consumer use a premium rate telephone line to contact the trader about an existing contract.
  • Traders must not impose excessive payment surcharges when consumers pay by certain means, such as credit or debit cards.

There is a set of basic information that has to be given to all consumers for all contracts, plus enhanced information that has to be given for “distance” and “off premises” contracts. The definition of “distance” is complex, requiring “an organised distance sales or service-provision scheme . . . with the exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded”. A trader selling via a scheme offered by a third party, such as an online platform is selling via an organised distance sales or service provision scheme. “Off premise” contracts may include contracts concluded at business premises if that followed an offer made at or is immediately after an “off premises” meeting. For these the Regulations:-

  • Extend the list of pre-contract information that a trader must give to a consumer (there are some differences between distance and off-premises contracts).
  • Introduce new rules on the cancellation of contracts for the supply of digital content not on a tangible medium.
  • Extend the statutory cancellation period (sometimes known as the cooling-off period) to 14 calendar days.
  • Where a consumer has a right to cancel a contract, require the trader to provide the consumer with a model cancellation form.
  • Extend the cancellation period to, broadly, one year if the trader fails to provide certain pre-contract information.
  • Require online traders to make it clear (for example by labelling the payment button with “Order with obligation to pay”), where proceeding with the transaction will trigger a payment.
  • Require a consumer to return goods within 14 calendar days of cancelling the contract.
  • Allow the trader to withhold a refund until the goods are returned (or evidence of their return is provided).
  • Allow the trader to deduct an amount for the diminished value of the goods when refunding payments.
  • Extend the list of ancillary contracts which will be automatically terminated on termination of a distance or off-premises contract.

This is a good time to check your contracts and processes comply. BIS has published Implementing Guidance which is worth reading to see if and how this will apply to you. However, we can’t understand how BIS can claim their horribly drafted Cancellation Notice complies with the Unfair Terms in Consumer Contracts Regulations 1994, which say that terms in consumer contracts must be in “plain and intelligible language”. Traders will have to make a decision whether to go for safety and use the BIS version or redraft it so that their customers might actually understand it. If you need it we can help.

Contact: Neil Howlett