Topic: Consumer protection
Who: Brussels and HM Government
When: 13 December 2013
Law stated as at: 10 December 2013
Sources within the Department for Business, Innovation and Skills have indicated that, on schedule, the Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013 (“CCRs”) look set to be signed off on 13 December 2013.
The CCRs implement a number of provisions of the EU Consumer Rights Directive (2011/83/EU) (“CRD”) and are very likely to come into force on or before 13 June 2014, the deadline set by the CRD for its implementation.
They apply to business to consumer contracts online and offline and will supersede 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.
Key measures in the CCRs regulate online consumer contracts and all transactional online consumer businesses will have to change their business practices in order to be compliant. This change is not only about tweaks to existing terms and conditions. Some structural website changes and platform recoding are also likely to be necessary. Some key headline elements are:
• the ‘cooling off’ cancellation period for online contracts is extended from 7 working days to 14 calendar days;
• returns/refunds procedures for goods are amended;
• additional ‘consent’ requirements for digital content/services received during the cooling-off period; and
• payment buttons need to be labelled ‘order with obligation to pay’ (or similar).
Failure to comply with the Regulations may mean:
• online contracts with consumers may not be binding, consumers becoming entitled to enhanced rights (such as additional time to cancel the contract) and consumers being able to exercise new rights of private redress to re-claim sums from online providers; and/or
• that the business in default may be liable to regulatory scrutiny, enforcement orders or injunctions and potentially monetary penalties.
For the current draft CCRs, which look likely to stay very much this way on adoption, click here.
Once the CCRs are “made” and finalised, marketinglaw will report in full on the CRRs’ detailed provisions.
Why this matters:
The CCRs are significant and will necessitate a review of practices by most UK businesses making sales online and offline. They are not, however, to be confused with the following:
• the Consumer Rights (Payment Surcharges) Regulations 2012 (“CRPSRs”). These came into force in April 2013 and principally outlaw charging consumers fees for using a particular payment method that are higher than the cost to the trader of accepting payment in that way;
• the Consumer Protection from Unfair Trading Regulations (Amendment) Regulations 2013 (“CPRARs”). These are still in draft and being consulted on. They will implement Article 27 of the CRD and introduce new rights of redress for consumers in respect of “prohibited practices” which are a “significant factor” in the consumer’s transactional decision. The practices in question are essentially misleading and aggressive commercial practices as defined in the existing Consumer Protection from Unfair Trading Regulations 2008.The rights include a right to unwind contracts with suppliers over a 90 day period, a right to receive discounts of between 25% and 100% depending on the seriousness of the practice in question and a right to damages including for alarm, distress and physical discomfort or inconvenience;
• the Consumer Rights Bill 2013 (“CRB”). This is still in consultation and implements any parts of the CRD not otherwise transposed by the CRPSRs, the CPRARs or the CCRs. Included are enhanced investigatory powers for enforcement agencies such as Trading Standards, a general right to reject goods or services within 30 days if they do not conform with the contract and a right to request repeat performance of a defective service. The current prognosis in Whitehall is that this is unlikely to receive the Royal Assent for anything up to a year.
For a quick guide to which UK measures are currently planned to implement which parts of the CRD, follow this link to the BIS draft Transposition Note on the CRD.
The avowed aim of both the European Commission for the CRD and of the UK Government as regards the Consumer Rights Bill has been to make consumer law “fit for the 21st century” and to simplify and streamline consumer rights in the context of business to consumer sales.
It is disappointing that this high-flown aim is being realised by such a raft of different measures coming into force in dribs and drabs over what looks like becoming a two year period. One supposes it would be too much to ask that as it looks like being the last in line to be signed off, the Consumer Rights Act 2014 could be more true to its name and include also the CRPSRs, the CPRARs and the CCRs?