Provisions of Services Regulations

Background to the Provisions of Services Regulations

The provisions of services regulations have been established as a result of the European Directive. Provisions came into force in the UK on 28th December 2009 and have potentially a far reaching effect on a wide range of businesses. One of the main aims of the regulations was to make the provision of services across the European Economic Area (EEA) easier and more transparent as well as ensuring that purchasers are furnished with the correct information relating to the supplier at the earliest possible opportunity or in any event before they have agreed formally to use the services.

Key Provisions in the Provisions of Services Regulation

At the centre of the regulations is the list of information that must be provided to the customer (whether they be a consumer or a business). Critically this information must be given prior to the customer becoming obliged in any way to make any payment. For example the information would have to be given before the service is performed or before any contract is signed.

Typically this will be problematic for the types of businesses that do not provide information such as contact details to their customers before they begin to undertake services. For example in the building trade where the first bit of written documentation is often the invoice. Customers are also not always aware of whom they are dealing with, particularly where there are multiple addresses or trading names being used.

The provisions also deal with the need to have available a written complaints procedure which a customer can ask to see at any point, again offering consistency and safeguards for those receiving services from others.

What is a Service under the Provisions of Services Regulations?

One of the initial questions that is raised under this provisions of services regulations is that of who exactly is considered to be a service provider and what exactly a service is? It is a common misconception that services are only provided by businesses to customers but in reality it can also cover a business to business situation and can potentially cover organisations that do not necessarily view themselves as being service organisations.

Organisations such as restaurants, accountants, beauticians are all clearly service providers whether they are servicing individuals or businesses and would fall within this category. Others are slightly less obvious and may only have a marginal service element for example whilst a retailer may be selling goods which are not considered a service any ongoing maintenance of these goods would result in it being deemed a service and therefore caught by these regulations.

Information that must be made Available

A critical issue to remember under the regulations is that all information must be provided to the customer BEFORE the contract is entered into or before the services are delivered or used. This is to ensure that the customer fully aware of whom they are dealing with and on what terms. Information that has to be provided includes the full correspondence address of the business (the official address if it is registered) contact details for a rapid response i.e. email or fax and the details relating to any VAT registration or any registration with a professional body.

Terms and conditions must also be given including not only the nature of the services that are to be provided but also including details of the price that will be charged, or if this is not known the way in which the price will ultimately be calculated. All of this must be given initially and services providers need to also ensure that they have a complaints process in place that can be given out on request.

Related Issues with the Provisions of Services Regulations

Ways of making information available

Depending on the nature of the organisation the way in which the information will be passed through to the customer will vary. For example for many professional firms such as lawyers and accountants there will already be a standard form of letter in place that tells new clients of this information. Other industries are not so well prepared for this move and will need to seriously adapt their working ways.

A great way of providing all of the info is in a terms of business letter with contact details and charges. Other options include a more detailed order note that can be used or even making the information clearly visible on the website (although the need to provide detailed estimates would still need to be satisfied).

Complaints handling obligation

A specific area that has been targeted under these regulations is that of complaint handling. Whilst it is not necessary to inform every new customer of the complaints handling process it is necessary to have such a process in place. Complaints need to be dealt with promptly. Best efforts need to be used in dealing with complaints and a set process which need to be in place and readily available for any customer who wants them. Again contact details need to be included to ensure that customers know to whom they should address complaints.

Action Points

  • All service providers need to review their processes to see whether they currently provide all of the necessary documentation.
  • Consideration needs to be given to terms and conditions of businesses to ensure they comply
  • Complaints processes need to be looked at to ensure compliance