When: 13 June 2014
Law as stated at: 5 June 2014
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “Regs”) are coming into force on 13 June 2014.
The Regs partly implement the Consumer Rights Directive 2011/83/EU (the “Directive”) along with other measures such as the Consumer Rights (Payment Surcharges) Regulations 2012.
This is a time of change for consumer law and – as we know from the Consumer Rights Bill – there is more to come. The Regs 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.
To ensure compliance, the full Regs must be scrutinised but below are what the writer regards as the top five “need to know” changes under the Regs for etailers.
1. Provision of pre-contractual information
The Regs stipulate that certain information must be provided to the consumer prior to formation of the contract, with some of that information required directly before the consumer places an order with an obligation to pay (regulations 13 and 14). Schedule 2 sets out the information to be provided in distance contracts and this includes information on the main characteristics of the goods or services, the total price of the goods or services inclusive of taxes, the duration of the contract, and the identity and contact details of the trader (amongst others).
2. “Order with obligation to pay” button
Where a consumer is required to activate a button or similar function (e.g. on a website) to conclude an electronic contract, there are wording requirements in order to make the payment obligation clear to the consumer. Regulation 14 requires that the button or similar function is “labelled in an easily legible manner only with the words “order with obligation to pay” or a corresponding unambiguous formulation indicating that placing the order entails an obligation to pay the trader”. It is therefore advisable for etailers to review the wording on their order confirmation buttons to ensure it meets this requirement.
Information must be provided to consumers about their right to cancel and a model cancellation form must be available for consumers in order for them to exercise their cancellation right (regulation 13, regulation 32, para l of Schedule 2, and Schedule 3). The normal cancellation periods are 14 days from the day on which: (i) the contract is entered into (for services and digital content); or (ii) the goods come into the physical possession of the consumer or the person identified by the consumer to take possession of them (for goods) (regulation 30). Please note, however, that the cancellation period may be altered depending on when the information on cancellation is provided to consumers, amongst other factors.
4. Specific “digital content” requirements
A new class of “digital content” has been added to the scope of consumer contracts on top of goods and services, which is defined as “data which are produced and supplied in digital form”. There are specific requirements relating to digital content such as the timing of supply of the digital content (regulation 37) and the provision of information regarding functionality (Schedule 2 para v).
5. No pre-selected additional payments
Under regulation 40, a consumer’s express consent must be obtained in respect of any payments “in addition to the remuneration agreed for the trader’s main obligation” and such express consent is not obtained where it is merely “inferred from the consumer not changing a default option”. This means that any pre-ticked box which adds products, services or digital content to a consumer’s order (e.g. pre-ticked box adding insurance to a product purchase) will not be sufficient.
Why this matters:
Now is the time for etailers and all distance sales business to ensure that their marketing materials and websites are compliant with the Regs (if they have not already done so). The Directive is a “maximum harmonisation” measure so no EU member state can go out on a limb and “gold plate” its measures, so pan-European etailers may be taking the opportunity to establish their own EU-wide standard position and consumer-facing materials in this respect.