If we wish to sell products via distance, for example through a call centre, in a catalogue or over the internet you will need to be aware of specific legislation protecting your customers interests and consequently imposing restrictions on your business. Most importantly you will need to be aware of the Consumer Protection (Distance Selling) Regulations 2000.
Consumer Protection (Distance Selling) Regulations
The Consumer Protection (Distance Selling) Regulations came into force on 31 October 2000 and provide protection to all consumers when purchasing products over long distance. This applies to products purchased through call centres, over the internet and by mail order.
As these transactions are not done face to face instead through a variety of mediums, for example telephone and email there must be additional protection for the consumers who enter into these transactions.
What is meant by a Distance Contract?
A distance contract is a contract which is made up of the following criteria:
One that is for the sale of goods or the provision of services
One that is formed between a supplier and a consumer – this means that business to business contracts are not subject to the legislation
One that is formed under an organised distance sales or service provision scheme run by the supplier – this means that contracts formed though a call centre or over a website are covered by the Regulations but this does not extend to one off promotions or offers through email
- One which is formed by communications between the supplier and the consumer whereby they do not come face to face with each other
The Regulations thus apply to the following transactions:
- Leaflets dropped in people’s letter boxes
- Press advertising with order forms
- In catalogues
What obligations will I have under the Regulations?
Each and every business operating a distance contract will have to abide by the following conditions:
- Information must be provided to the consumer prior to the contract being concluded
- Confirmation in writing must be given to consumers concerning the prior information above but also additional information specifically concerning their cancellation rights. In this context the confirmation in writing can alternatively be given in another durable medium which is available and accessible to the consumer. Emailing the details directly to the customer falls within this category but simply providing the details on the website does not.
- There must be certain cancellation rights available to the consumer
- The contract must be performed within a minimum time period
The Regulations specify that the following information must be made available to all consumers prior to the contract being formed:
- Your name or name of business and address
- A full description of the goods
- Price of the goods – this must include taxes
- Delivery costs
- Payment arrangements
- Arrangements for delivery
- Arrangements for performance of the contract
- Seven day cooling off period – this exists for all distance selling contracts and gives the consumer a total of 7 days to change their mind
- Minimum duration of the contract – for example if it is a contract for a mobile phone the minimum may be a 12 months or 18 months. The consumer must be made fully aware of this.
If this prior information is not provided then the contract will become void. The information must also be provided in a manner which is appropriate for the means of communication, for example if telephone selling then it would not be appropriate to send the information to the customer by email unless you have expressly stated to them that this is the case.
My company is planning to cold call, is there anything else I should be aware of?
Cold calling is a technique often used by many different kind of business to varying degrees of success. As well as the above prior information you must take note that each caller must state their identity and the purpose of the call immediately otherwise any sale concluded during that call will be void.
If the customer then agrees to the contract with you, you must again provide the above information in writing along with the following further information:
- That they have the right to cancel the contract
- The process by which they can cancel the contract and conditions imposed thereon
- Who is responsible for paying the costs of returning the goods in case of cancellation
- The address of your place of business for the purpose of complaints
- Details of any guarantees on the products or any after-sales services
You must provide this information to the consumer prior to the conclusion of the contract.
Right to cancel
A consumer has the right to cancel the contract at any time during the specified cancellation period by notifying the supplier in writing.
Upon cancellation of the contract by the consumer any funds paid by them must be returned to them usually within 30 days of cancellation.
Where the supplier wishes to send substitute goods to the consumer if they wish to cancel the contract due to the fault of the original goods then the consumer must have been informed of this possibility in the original contract and the supplier must bear the costs of this.
Return of goods
If the contract has been cancelled by the consumer but they are already in possession of the goods the supplier can request for the goods to be returned to them. If they do this within 21 days following cancellation of the contract and the consumer refuses or fails to do so then their duty to take reasonable care of the goods will continue.
If the supplier fails to request the goods within 21 days then the consumers duty to take reasonable care of the goods will no longer be imposed.
Performance of the Contract
Unless it is agreed otherwise between the parties the supplier must send the goods to the consumer within 30 days of the conclusion of the contract.