European Union: New Changes In Consumer Protection Law Now In Force

Last Updated: 7 July 2014
Article by Tristan Mutimer

If you supply goods or services to consumers, you should be aware of the significant changes brought about by the new consumer laws made on 13 June 2014 as you may need to act now.

On 13 June 2014, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the "Regulations") came into force. The new Regulations implement the majority of the provisions of the EU Consumer Rights Directive and form part of the extensive overhaul of consumer law currently being undertaken in the UK and the EU.

The Regulations replace the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in a Consumer's Home or Place of Work etc. Regulations 2008 for contracts entered into on or after 13 June 2014.

The Regulations cover most on-premises (i.e. in-store sales), distance (i.e. online and telephone sales) and off-premises (i.e. doorstep sales) business-to-consumer contracts; therefore, where the contract is entered into will affect the sort of contract it is for the purposes of the Regulations.

Information requirements

Schedules 1 and 2 of the Regulations outline the information which businesses must provide to consumers before goods or services are purchased. The information requirements are now broader and differ depending on whether the sale is made on-premises, off-premises or at distance.

Any sales which can be classed as day-to-day transactions that are performed immediately when the contract is entered into (i.e. the consumer pays and gets the goods or services straight away) will be exempt from the information requirements. For example, buying a cup of coffee or the daily newspaper or groceries, where the consumer is very familiar with the goods or services, would constitute a day-to-day transaction.

The required information must be given or made available to the consumer before the consumer is legally bound. Information is deemed to be made available to the consumer only if the consumer can reasonably be expected to know how to access it.

There are additional requirements for online sales. The business must ensure that the consumer, when placing the order, explicitly acknowledges that they are entering into a binding agreement to pay. If placing an order involves the consumer clicking a button or carrying out a similar function, the business has to ensure that the button or similar function displays the words "order with obligation to pay" or a similar unambiguous formulation (for example, "pay now") so as to be clear that clicking the button entails an obligation to pay. If the business has not complied with this provision, the consumer is not bound by the contract or order.

Right to cancel for distance and off-premises contracts

Cooling-off period

The cancellation or cooling-off period during which consumers can cancel orders for goods, services or digital content is now 14 calendar days across the EU (the period used to be 7 working days in the UK). For the supply of services or digital content not on a tangible medium, the cancellation period ends at the end of 14 days after the day on which the contract is entered into. For supply of goods contracts, the cancellation period ends at the end of 14 days after the day on which the goods are delivered. If the business does not provide the consumer with the required information on the right to cancel, the cancellation period is extended by a further 12 months (this period used to be 90 days).

Model cancellation form

Businesses have to supply the consumer with a cancellation form if a right to cancel exists (a model cancellation form is provided in Schedule 3 of the Regulations). In order to cancel a distance contract, the consumer has the option of notifying the business either by (a) completing the provided cancellation form, or (b) by making any other clear statement setting out the decision to cancel the contract (this would include a telephone call or e-mail).

Reimbursement

If a consumer changes its mind and cancels its order within the statutory 14-day cancellation period, any refund should include any standard delivery costs that the consumer paid for the goods to be delivered to them. If the consumer expressly chose a method of delivery which cost more than the standard delivery option, the business is only required to reimburse the standard delivery amount.

Reimbursement must be made "without undue delay", which generally means within 14 days after (a) the day on which the business receives the goods back, or (b) if earlier, the day on which the consumer supplies evidence of having sent the goods back.

Inertia selling and additional charges

Inertia selling

The Regulations insert a new provision into the Consumer Protection from Unfair Trading Regulations 2008 to the effect that a consumer is under no obligation to pay for unsolicited goods. The absence of a response from the consumer following the supply of an unsolicited product will not constitute consent to the provision of consideration for, or the return or safekeeping of, the products; the consumer may treat the products as if they were an unconditional gift.

Additional charges

The Regulations include a prohibition on any practice which makes an additional payment the default option and where the consumer must act to avoid the payment. This provision is designed to prevent businesses using devices such as pre-ticked boxes on a website which the consumer would have to un-tick in order to avoid an extra charge. Consumers now have to give express consent to any additional payments prior to the conclusion of the contract.

Helpline charges

Where a business offers a telephone helpline to consumers for queries concerning contracts entered into with the business, the consumer must not be charged over the basic rate. If the call costs more than the basic rate, the business will have to reimburse the consumer for charges above the basic rate.

Delivery

Unless otherwise agreed, the business must deliver the goods to the consumer without undue delay and, in any event, not more than 30 days after the day on which the contract is entered into. If delivery does not occur as agreed, the consumer may treat the contract as at an end and the business must reimburse all payments under the contract without undue delay.

Comment

It should be noted that there are certain contracts that fall outside of the scope of the Regulations. These include, among others, contracts relating to gambling; financial services; package travels and holidays; and automatic vending machines or automated commercial premises.

Businesses should review (if they haven't done so already) their contract terms and conditions, websites and sales processes to ensure that the new requirements are adopted and that their policies are compliant with the new Regulations.

Businesses which supply to both business and consumer customers may wish to consider amending their terms and conditions so that their business customers do not receive the enhanced protection designed for consumer customers.

Non-compliance with the Regulations could result in contracts being rendered unenforceable and could also lead to businesses facing criminal prosecutions and fines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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