The Consumer Contracts (Information, Cancellation and Payments) Regulation 2013 is due to be implemented on the 13 June 2014. The update rules require traders that sell goods, services or digital content to include certain terms into their consumer contracts and make provision for new pre-contract information. Some of the information provisions are already required by existing legislation and will be familiar to traders, however, there are a number of differences, which will need to be implemented.
Importantly, on this date, the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in Consumer’s Home or Place of Work Regulations 2008, will be revoked. These later provisions will still apply to all contracts made before 13 June 2014.
What contracts are affected?
The Regulations apply to all distance, off-premises and on-premises contracts made on or after the 13 June 2014. Broadly, off-premises contracts are more applicable to the vast majority of those within our represented sectors. It is important to note that the Regulations only impact contracts between traders and consumers.
Despite the fact the definition of ‘trader’ has remained the same, ‘consumer’ is now defined as an individual/natural person, acting for purposes that are wholly or mainly personal – so beyond the remit of that individual’s business. Although the requirement is for an individual to be acting outside of their trade, a consumer may still receive protection if there is a mixture of business and personal.
The key changes are…
- Pre-contract information – The pre-contract information outlined in the Schedules to the Regulations must be provided. This extended list, which is applicable for distance and off-premises contracts, also covers the inclusion of a cancellation form, which has to be provided where the consumer has the right to cancel. Not providing this information for off-premises contracts, could lead to the trader committing a criminal offence and being liable to a fine. This also extends to on-premises contracts.
- Extended ‘cooling off’ period – The new Regulations have extended a consumers right to cancel a contract, which have changed from 7 calendar days to 14 calendar days. Where ancillary contracts are applicable (such as a warranty), notification of cancellation will automatically cancel any ancillary contract.
- Refunds – The traders must refund within 14 days of notification of cancellation.
- Delivery – Unless the trader and consumer come to an agreement, a contract should be fulfilled without undue delay and within 30 days.
- Payments – Express consent must be obtained where extra fees are to be charged in addition to the original contract price. A consumer will not be liable to pay any costs that they have not been told about before entering in to the contract.
- Online payments – For distance and off-premises contracts, traders must be explicit when proceeding with an online transaction that results in payment.
- Consumer helplines – Calls to consumer helplines must be charged at basic rates, rather than premium rates.
Are there any exemptions?
There are a number of contracts that are exempt from the new Regulations, for the full list download the ‘Implementing Guidance’ document below.
How do you implement the changes?
The Department for Business Innovation and Skills has published a useful ‘Implementing Guidance’ document to help traders update their consumer contracts, terms and conditions and website transactions, to ensure they are all compliant with the new provisions by 13 June 2014.
It is important to consider whether your business is subject to this new legislation, as compliance with the new Regulation will not only protect the consumer, but also the trader.