The Consumer Law Landscape is Changing...and in a Big Way!

There has finally been a move to bring all the various strands of consumer law together in one place, and that place is the Consumer Rights Bill. This Bill was presented to the House of Commons in January, and is slowly but surely making its way through Parliament.

As of 13th June 2014, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the 'Regulations') come into force. The Regulations make many changes to existing consumer law, and these impact most sales to consumers – whether:

* a consumer visits the seller's premises
* the seller meets a consumer outside of their premises or visits a consumer's home ('off-premises')
* sales to a consumer over the internet (including online auctions), or by mail order or telesales ('distance')

Some contracts, such as those related to gambling, construction of homes and letting of residences and package travel deals, will not be covered by the Regulations, along with simple 'day to day' transactions, such as buying a soft drink in a shop. Others, such as those related to passenger transport or prescription-related contracts, are only partly covered. But, make no mistake, most businesses selling to UK consumers, and most consumer-facing contracts, will be included.

Whilst the Regulations change the current landscape in many ways, some of the key changes to be introduced are as follows for sellers:

* You will not be able to require a consumer to use a premium rate telephone line to contact you about an existing contract. You will need to provide a number that charges no more than a geographic or mobile rate.

* If a consumer contract is cancelled then any side contracts relating to it will automatically be cancelled, regardless of whether these may be supplemental insurance cover on a DVD player or a related credit agreement, for example.

* Unless you and the consumer agree otherwise, any goods purchased should be delivered within 30 days.

* For the first time in the UK, a new concept of 'digital content' will be introduced, to cover items such as music downloaded online. There will also be new rules covering cancellation of contracts for such digital content.

* The list of pre-contract information that you must give to a consumer under an off-premises or distance contract has been extended, and you will have to provide the consumer with a model cancellation form for their use.

* You will have to provide consumers with information in a 'durable medium' (such as on paper, in an email or on a CD or DVD), which means that a link to your website and/or your terms and conditions embedded in a consumer email will not be sufficient. If you fail to provide this pre-contract information, you might find that a consumer can still cancel their contract 12 months later!

* If you sell online, you will need to make very clear when a consumer is accepting a payment obligation, such as by labelling the payment button on your website with words such as "Order with Payment Obligation".

* Registered to the above, you will also need to gain a consumer's express prior consent before adding any additional payment obligations, so charging if they do not un-tick a box will not be acceptable. If you fail in this respect, a consumer may not have to make these payments at all, but will be entitled to keep the relevant goods or services!

* The statutory cancellation or 'cooling-off' period for off-premises and distance contracts will be extended from 7 to 14 calendar days.

The consumer will also be obligated under these new Regulations, including:

* A consumer should return goods under an off-premises or distance contract within 14 days of any cancellation.

* The seller can withhold a refund until any relevant goods are returned (or evidence of their return is provided by the consumer).

* The seller can deduct an amount for any diminished value of the returned goods. If a consumer simply opens a box to inspect the goods, no deduction is possible, but if he tests them out, so to speak, one is.

The Regulations and the Consumer Rights Bill provide a lot of information for sellers to digest and put into place in order to remain compliant.

For further information, please contact John Yatchisin on 01234 270600 or email at jyatchisin@woodfines.co.uk

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