While Trading Standards bemoan ignorance of the 2000 “Distance Selling Regulations”, the OFT gets tough on post-cancellation refunds.
Topic: Selling on Line
Who: West Sussex Trading Standards, The Office of Fair Trading, Amazon.co.uk and Bol.com
When: June 2002
While in their recent report, West Sussex Trading Standards were complaining of widespread non-compliance with the Consumer Protection (Distance Selling) Regulations 2000 (“the 2000 Regulations”), the OFT came to an accommodation with major e-commerce players amazon.co.uk and bol.com over refunds following the exercise of the cancellation rights conferred on consumers by the 2000 Regulations, in force since October of that year.
Covered elsewhere on marketinglaw.co.uk, the principal strands of the 2000 Regulations are firstly various detailed disclosure requirements and secondly the consumer cancellation right. The existence of the cancellation right has to be notified to consumers before the point at which they decide to purchase in a distance selling context (for instance on-line or by mail order) and the right to cancel itself can be exercised by the consumer at any point within a period of 7 working days beginning the day after delivery has been effected.
The recent West Sussex Trading Standards report indicated that over half of the sites visited by the watchdogs failed to inform consumers of their right to cancel, while in two thirds of cases not all the monies paid over by the consumer for the purchase were refunded if the cancellation right was exercised.
It was in this last area that the OFT conducted discussions with Amazon and Bol. Up until that time, consumers buying from these websites were certainly informed of their right to cancel, but if and when they did exercise that cancellation right there was a question as to whether they were being refunded the delivery charges which they had initially paid for any product purchased. The OFT approached both e-commerce operators demanding that these delivery charges should be included in the refund after the exercise of the cancellation rights. Amazon and Bol negotiated with the OFT and have now agreed that in normal circumstances those charges will be refunded, although the position regarding the actual cost of returning goods following cancellation remains the same.
This is that under the 2000 Regulations the consumer is not required to pay for the return of the goods, but only to make them available for collection. Whether or not the consumer has to foot the bill for the cost of getting cancelled goods back into the hands of the seller is a question of contract. If the sale terms notified to the consumer make it clear that on cancellation the consumer must arrange for the return of the product in question, then, unless such a provision might be regarded as unfair under the Unfair Terms in Consumer Contracts Regulations 1999, the consumer will have to arrange for the return of the products in question and fork out for those return costs.
Why this matters:
Despite the fact that it is now not far short of two years since the 2000 Regulations came into force, these are still widely disregarded or simply not within the knowledge of e-commerce companies. These recent developments highlight the pressing need for sellers online or by mail order to get their house in order so far as these regulations are concerned, failing which they will enjoy the unwelcome attentions of the Office of Fair Trading and, in extreme cases, a court by way of applications for "Stop Now" Orders.