Distance Selling Regulations
Even if your business sells products or services to customers over the internet, there are rules and regulations that you must abide by under distance selling regulations. Any product or service sold by mail order, email, a website, fax or over the telephone must adhere to three main laws of the distance selling regulations. The first is Consumer Contracts, the second is Ecommerce Regulations if you sell directly through your own website and thirdly there is the Consumer Rights Act 2015.
Consumer Contracts Regulations
Previously known as Distance Selling Regulations, the Consumer Contracts Regulations came into being on the 13 June 2015 as part of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These apply to the sale of goods or services to consumers which are not completed face to face as a usual retail transaction. These regulations incorporate any digital means of selling from digital television through to the internet, telephone or text message.
As with any regulations, the Consumer Contracts do have exceptions and these will apply to;
- A one off sale through distance selling in response to a customer request – However the regulations will be applicable if your business regularly deals with such requests
- The sale of financial services because these are covered by the Financial Services Distance Marketing Regulations
- Any sale of buildings or land. This can include a lease agreement for three years or more
- A sale made using a vending machine or automated premises or a payphone
- Any sale completed through an auction including online auctions
In accordance with the Consumer Contracts Regulations a business owner must ensure the following;
- Customers should be provided with sufficient information before they make a purchase
- Customers should be given the right to cancel their order, usually through a cooling off period
- Any sale must be confirmed in writing in an email, order form or other written document
- Contractual obligations must be fulfilled within a period of 30 days unless these have been agreed otherwise
- A customer can obtain a full refund up to 14 days after they have received the product or service if they have changed their mind
This specifically applies to any sales which have been made through electronic means including email, websites, interactive television, text message or any other digital methods. Again, businesses have quite specific rules that they have to comply with which relate specifically to advertising and marketing products including;
When a product is sold or advertised, certain pieces of information must be provided including;
- The business name, location, address and contact details
- Information in relation to any trade organisations, memberships or professional bodies of which you are a member
- Information on any scheme which has approved or authorised the business to sell products or services such as financial services
- A VAT number if you have one
- Specific information about pricing and whether this includes taxes and delivery costs
When communicating on a commercial basis through email or letter, they must;
- Clearly identify that the communication is from your business
- Clearly stipulate any promotional offers, competitions, discounts and associated conditions
If your business has a system in place which automatically generates contracts, you must also provide supplementary details to the customer including information about how the contracts are generated and if required how errors are corrected. Any orders which have been submitted electronically must also be confirmed promptly.
Pre-Contract information provided prior to the sale
Before a sale is made the customer should be provided with an adequate amount of information.
This should include;
- As outlined above the contact details for your business and if you require payment before the customer receives the product or service, the postal address of your business
- A detailed description of the product or service to be provided and if it is an ongoing basis, stipulate how long the minimum term is
- Information about pricing and how long any offers remain in place
- Details about any delivery costs
- The methods through which you can make payment
- What arrangements are in place for delivery e.g. courier, royal mail etc.
- Details about cancellation and the rights of the consumer to cancel the contract
- Whether you will supply substitute items if the product ordered by the customer is unavailable
- If the product is digital, how the product functions and what devices it is and isn’t compatible with
Under the distance selling regulations, customers who purchase a product or service through distance selling have the right to cancel their purchase within 14 calendar days of receiving the product or service. Cooling off periods can be as long as three months and 7 working days if the customer does not receive written confirmation of the required information or confirmation of their right to cancel in writing.
Businesses must also provide a model cancellation form as a distance selling agent. Where the product is a digital download where the order cannot be cancelled once the download has started, this must be made very clear to the customer and they must agree to this before they make a purchase.
Distance selling regulations stipulate that they don’t necessarily require customers to return your products once they have cancelled the order, and they must take reasonable care of them, making them available for collection.
The customer must be refunded as soon as possible and within the 14 day period of receiving the cancelled product. There is an exception to this rule which applies if your contract requires the customer to return goods if they cancel their contract.
The Consumer Rights Act 2015
In 2015 the Consumer Rights Act was introduced which covers all product and services which are ordered in the home through digital means such as mail order, direct sales or through the internet. The Act also applies to digital content. When a consumer makes a purchase the products that they receive must be as described when they made the purchase, fit for purpose and of a good quality. If the product turns out to be faulty any time up to six months after the item has been purchased and it cannot be repaired or replaced, the consumer is well within their rights to claim a full refund. Consumers cannot simply change their mind and return the item.
If you are a business owner who sells digital content such as software, ebooks, games or music, you should be aware that consumers can now request a replacement or a repair if the downloaded content turns out to be faulty. If the fault cannot be fixed within a reasonable time scale, it cannot be repaired within an acceptable timeframe or it cannot be fixed at all, the consumer is entitled to claim a proportion or all of their money back.
In terms of digital content, consumers have the right to change their mind and receive a full refund within 14 days if they purchase digital content unless they started to download or have fully downloaded the content.
As a business owner you have to be very mindful of the rules and regulations which are associated with selling products and services online. It is essential that you fully comply with the regulations and the Consumer Rights Act 2015 (formerly the Distance Selling Regulations) so you operate fairly and in accordance with consumer laws.
About the author:
This article was written by a member of the Expert Answers legal advice team. Expert Answers provides online legal advice on all aspects of UK Law to users in the United Kingdom.