Comprehensive New Rules Apply From 13 June

UK businesses have just one month left to ensure that they are ready to comply with laws which provide comprehensive new rights for consumers when purchasing goods and services.

The Consumer Rights Directive (CRD) was introduced in the EU in December 2011 with the aim of modernising consumer law. Since then the UK has introduced a set of measures through new legislation and from 13 June 2014, these will need to be applied to all relevant consumer contracts in the UK.

There are several key changes to be introduced through the CRD including the level of information that organisations will be required to provide consumers with when ordering goods and services.

Contracts which are entered into and which relate to the ordering of goods and services made at a business’ premises, must provide information about their identity, the total prices (including taxes) and main characteristics of what has been purchased.

Businesses will be required to provide the same information in relation to ‘distance’ contracts, as well as giving clear details about delivery charges and any other additional cost.

Many of the changes have been introduced to deal with the rapid growth of e-commerce and where, for example, a contract is concluded through the internet, the business will need to provide an on screen button at the point of sale which states explicitly that by clicking it, the consumer knows that they have an obligation to pay.

Once the directive has come into force, customers will be able to cancel contracts and receive a refund up to 14 days from the date the consumer has received the items.  This is a key change from the current 7 days.

Other key changes include the ban on pre-ticked boxes and a requirement for businesses which provide a consumer telephone line, to only charge the applicable basic rate for that call.

Expert Opinion

The directive is a fundamental change for consumer legislation. This is especially true in relation to digital content such as downloads which has not previously been provided for. It is imperative that all consumer facing organisations undertake a review of their terms and conditions and websites to ensure that they comply. <br/> <br/>"Staff should also be educated on the changes so that anyone in a customer facing role understands the new requirements. <br/> <br/>"There are several key requirements covered by the directive. Information provided to consumers will vary depending on whether the contract is classified as on-premises, off-premises or a distance contract. Some of this is consistent with the current requirements including under the Consumer Protection (Distance Selling) Regulations 2000 but it is important for organisations to consider the requirements against their current business practices. This is especially key if organisations allow consumers to place electronic orders as there is a new requirement for a clear signposting for a consumer to specifically acknowledge the obligation to pay by an express button otherwise the order will not be binding. <br/> <br/>"A business allowing online orders must adapt their ordering processes to comply with this new obligation. In relation to digital content there is a new requirement to provide information before the contract is concluded on functionality, and information on interoperability with hardware and software. <br/> <br/>"The cooling off period for distance contracts has also been extended to 14 days. For digital content the trader can only supply digital content during the cooling off period if the consumer has consented and acknowledged that he will lose the cancellation right. <br/> <br/>"It is imperative that traders consider in detail how they are conducting business with consumers and put into place any requirements no later than 13 June 2014. The team at Irwin Mitchell can provide an audit of a business’s consumer facing processes in respect of the new requirements." <br/> Sarah Riding - Partner