The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (‘the Regulations’) came into force on 13 June 2014 and applies to customer contracts concluded on or after that date. The Regulations require important changes in the way retailers contract with customers.
The Regulations affect retailers in different ways and distinguish between three types of contracts, depending on whether the contracts are concluded:
– on-premises (i.e. in the store)
– at distance (i.e. telephone or on-line sales)
– off-premises (i.e. at the consumer’s home).
The Regulations introduce a number of key changes to UK consumer law, including:
– Retailers are no longer entitled to apply payment surcharges which exceed the cost to the business of such payment methods. Typically, such surcharges have been imposed on the use of credit or debit cards by consumers. Businesses can now only pass on the actual cost.
– Online obligations to pay must be made clear for consumers. Website buttons must be clearly labelled i.e. ‘Order and Pay Now’ (or equivalent wording). Pre-ticked payment boxes are no longer permitted – consumers must give express consent before traders take any additional payments.
– A ban on ‘premium’ rate help-line charges. Businesses will not be allowed to charge consumers more than the basic rate to telephone them in relation to existing contracts.
– Cancellation and refunds – the statutory minimum cancellation period for consumers who are buying at a distance or ‘off-premises’ has been extended from 7 working days to 14 calendar days. Exceptions to this rule will continue to exist for goods such as foodstuffs and personalised goods. Distance and off-premises retailers can now be allowed to withhold paying refunds, until goods are returned by the consumer. They can also be allowed to reduce refunds where the value of the returned goods has diminished due to excessive handling by the consumer.
– New information requirements – retailers must provide consumers with certain pre- and post-contract information before goods or services are purchased. The information requirements are now more extensive and vary depending on how the retailer contracts with the consumer. For example, a failure to provide information to a consumer before the sale about the 14-day cancellation right will extend the right to cancel to 12 months.
The Regulations do not apply to all contracts finalised on or after 13 June 2014, for instance contracts for the supply of food and beverages supplied by a trader on regular rounds (i.e. milkmen) or package travel and holidays.
The Regulations are mandatory. If retailers attempt to restrict consumers’ rights under the Regulations, those contracts will not be binding on the consumer. Many of the new provisions brought into place by the Regulations will automatically form part of consumer contracts regardless of the wording of the actual terms and conditions.
Therefore, it is important that businesses which sell to consumers review sales processes, terms of business, cancellation and refund policies to ensure compliance. The Regulations are consumer-friendly so it is very important for retailers to grasp the changes in the law to avoid the risk of the consequences for failing to comply.