The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 ("the Regulations") will come into force on 13 June 2014 and implement certain parts of the Consumer Rights Directive into English law and in doing so, amongst other things, change the Distance Selling Regulations.
The regualtions focus on 3 areas:
- The requirement for traders to provide information
- Update the rules on cancellation rights
- Prohibition of "hidden costs"
Dealing with each in turn:
Key features of the Regulations
1. The requirement for traders to provide information
When concluding in-store contracts, traders must, before a sale takes place, provide details of their address and telephone number, the main characteristics of the goods and/ or services they are selling, the total price inclusive of tax and any complaints handling policy.
In relation to distance and off-premises contracts, traders must provide the information above and state whether or not the consumer will be responsible for the cost of returning goods in the event of cancellation. In respect of distance contracts where the goods cannot be returned by post, the cost of returning the goods must be stated. Traders will also be required to provide copies of contracts entered into, to be kept for the consumer's reference.
Certain contracts are exempt from the requirements, such as on-premises contracts that involve a day-to-day transaction performed immediately at the time the contract is formed and off-premises contracts where the cost of the goods or services does not exceed £42.
2. Update the rules on cancellation rights
The Regulations extend the consumer's right to cancel contracts from 7 working days in the case of distance contracts and 7 calendar days in respect of doorstep contracts, to 14 working days for both types of contract. If a consumer cancels the main contract, any ancillary contract will automatically terminate. Failure to inform the consumer of their right to cancel will result in the extension of the cancellation period from 14 days to 12 months.
3. Prohibition of "hidden costs"
The Regulations also aim to eliminate the situation where consumers are liable to pay "hidden costs." The consumer cannot, for example, be obliged to make any payments in addition to payment for the goods or services in respect of which the main contract is formed, unless the consumer has provided express consent. In practical terms, this means that traders will, for example, be prohibited from including on their websites pre-ticked boxes used to signify the consumer's acceptance to make additional payments. Consumers may not be charged more than the cost of a basic rate phone call to telephone a customer helpline.
Implications of the Regulations for traders
The aim of the Regulations is to increase consumer confidence and as a result, boost business activity. Arguably the most significant changes brought about by the Regulations are the extension of the consumer cancellation right and the introduction of information requirements relating to in-store contracts.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.