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Consumer Rights Directive adopted to merge and enhance consumer rights

Simon Weinberg — Tue, 25 Oct 2011 17:30:45 +0000

The Consumer Rights Directive has been adopted by the European Union Council of Ministers and will become law across the EU. The Directive will combine rights of consumers in various situations into one piece of legislation. The rights of consumers – and the consequent burdens on businesses – are also being increased with this legislation. For example, consumers who order goods at a distance or outside of the business’s normal place of business will have 14 days’ cooling off period (instead of seven working days previously) and this can be extended for up to 12 months (previously three) if the requisite information is not provided. The information to be provided by the business is also being increased. One benefit for businesses is that in a cooling off situation, there are firmer obligations on consumers to have to return goods within a relatively short period of time (effectively 14 days from when they give notice of cancellation) and businesses will not have to refund the consumer until they have received the goods back.

One particular area of concern for some businesses is the requirement on businesses to seek the express consent of the consumer to any extra payment in addition to the main payment obligation. If there has not been express consent but it is inferred by using default options which the consumer is required to reject in order to avoid the extra payment obligations, the consumer may be refunded for the extra payment.

The UK Government will have two years to implement the Directive, but it may well do so before that, as it has already signalled its desire to amalgamate consumer laws into a single Consumer Bill of Rights, which the Government hopes will be less confusing for consumers and businesses than the plethora of laws that exist today.

The full text of the Directive can be found here: http://register.consilium.europa.eu/pdf/en/11/pe00/pe00026.en11.pdf.

Government proposes new single consolidated Consumer Bill of Rights

Simon Weinberg — Sat, 01 Oct 2011 22:25:55 +0000

UK consumer laws will be merged into a single consolidated law, according to Government proposals. Currently, there are 12 statutes and Regulations, some of which overlap. The UK will also need to bring into force the European Union’s Consumer Rights Directive when it is passed at EU level, which is expected to happen in the coming weeks. The consolidated Consumer Bills of Rights will cover everything from rights to take back or replace or repair consumer goods, to unfair contract terms, to cooling off rights in distance or doorstep contracts, through to remedies for misleading or aggressive commercial practices. Ed Davey, the Consumer Minister, hails this initiative as good news for consumers and businesses.

OFT wins court order against online trader who refused to deliver on time or give refunds in accordance with distance selling laws and misled over product availability

Mark Weston — Sat, 02 Jul 2011 07:19:50 +0000

The Office of Fair Trading has successfully obtained a judgment in Cardiff County Court against an online trader who breached various consumer laws. In particular, Mr Arora:

Failed to deliver the products within the timeframe required by the Distance Selling Regulations.
Failed to respond or otherwise comply with consumers’ decisions to exercise their statutory rights to cancel their contracts under those Regulations.
Failed to be available in a rapid and effective manner for consumers to contact him, as required by the Electronic Commerce Regulations.
Misled as to the availability of the products and the timeframes, contrary to the Consumer Protection from Unfair Trading Regulations.

The OFT took action under the Enterprise Act and brought proceedings against the website operator after written undertakings previously given by it to offer refunds to customers were not complied with. The OFT has said that it will continue to monitor the website’s future practices.

OFT publishes strategy to increase protection of consumer rights when shopping online, including better enforcement

Mark Weston — Mon, 13 Dec 2010 16:10:12 +0000

The Office of Fair Trading has published a strategy document to better protect consumers who shop online in the UK. The OFT would like to undertake more effective enforcement, improve compliance by businesses and empower consumers with better knowledge. In particular, the OFT believes that more effective enforcement will be achieved by sharing more data and co-operating with other enforcement bodies such as trading standards and the police. Anyone not complying with Distancing Selling Regulations and other laws that affect online selling: watch out!

CAP Code to apply to material on own websites

Mark Weston — Wed, 08 Sep 2010 12:02:42 +0000

The CAP Code is being extended to apply to material on organisations’ own websites. The CAP Code is a code of practice governing the content of adverts and marketing communications. It is administered by the Advertising Standards Authority. At the moment, the Code applies to advertisements in newspapers, journals, posters, emails and text messages, pop-up ads, banner ads and keyword advertising with Internet search engines. The scope of coverage in the digital world had been limited in non paid-for space online. That is now going to change.

With effect from 1 March 2011, the CAP Code will apply to advertisements and other marketing communications on advertisers’ own websites and in other non paid-for space online under their control. A three stage test will be undertaken to see if a particular advert is covered, but essentially businesses will be safest just to assume that any material about them or their goods or services on their own websites or on any social media website under their control will be caught.

Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space. This restriction on being able to obtain advertising space will move into the online world when the changes come into effect, as the ASA will co-operate with search engines to remove adverts that link to the non-compliant material.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘Businesses should consider these changes as part of an overall website review. Whilst these changes will add another layer to the regulatory requirements that businesses face, there are other important legal requirements that many websites don’t yet comply with but should do. We regularly come across websites that don’t comply with Distance Selling Regulations, E-Commerce Regulations, the Data Protection Act or other laws, or otherwise expose themselves by failing to take simple measures. Help is at hand and it doesn’t have to cost a fortune. We have helped many of our clients through this online legal maze in a practical and cost-effective way.’

Several High Street names not operating within Distance Selling Rules

Mark Weston — Fri, 16 Jul 2010 09:30:36 +0000

A BBC investigation has discovered that some retailers are not operating within consumer laws imposed by the Consumer Protection (Distance Selling) Regulations 2000. Many are giving out false information about whether the consumer has a right to return their goods or have their delivery charges refunded. Under the Distance Selling Regulations, consumers have the right to change their mind at no charge within seven working days of delivery in respect of standard goods that they buy at a distance, such as through telephone, mail order or Internet. This is the so-called ‘cooling off period’. Next said that it is changing its policies to ensure that it complies with the law. Debenhams has also apologised for wrong information being posted on its web site and said that it too will correct that going forward. Other retailers are not within the rules but claim to be so. Trading Standards has said that there is no excuse for failing to comply with the Regulations 10 years after they came into force. It hopes that businesses will ensure their processes comply, but it has vowed to take action against traders that are not abiding by the law. The BBC report can be found here: http://news.bbc.co.uk/1/hi/business/10560466.stm.

Retailers can’t charge customers delivery charges if they cancel contract under Distance Selling Directive – Handelsgesellschaft Heinrich Heine GmbH v Verbraucherzentrale Nordrhein-Westfalen eV, Court of Justice of the European Union

Paul Gershlick — Fri, 30 Apr 2010 15:20:31 +0000

Under European Union contract law, consumers are generally entitled to a cooling off period in which they may change their minds and obtain a refund for goods purchased at a distance. In this case, the Court of Justice of the European Union (formerly the European Court of Justice) has ruled that, under the Distance Selling Directive – which contains that law – it is unlawful to require the consumer to pay for delivery costs so that they only get a refund on the price of the goods. This mirrors and reinforces a previous decision of the Office of Fair Trading in the UK, but the CJEU ruling holds much more weight. If the terms and conditions are drawn up well, the business can still require the consumer to foot the bill of paying for the delivery costs involved with the return from the consumer (as opposed to original delivery to the consumer).

Apple agrees to change Terms and Conditions to comply with consumer contracts laws

Mark Weston — Mon, 14 Dec 2009 21:44:43 +0000

Apple Inc has agreed to the Office of Fair Trading’s request to change its terms and conditions in order to comply with the Unfair Terms in Consumer Contracts Regulations 1999. The 1999 Regulations require contract terms with consumers to be in plain English and not create a significant imbalance between the consumer’s position and the supplier’s. Apple agreed to change the terms that applied to people purchases on its iTunes stores and software downloads. It agreed to ensure its terms:

did not exclude liability for faulty or mis-described goods;
were consistent with consumer rights under the Distance Selling Regulations;
were drafted in plain and intelligible language;
did not allow changes to be made after agreements had been made.