Nowadays most people shop directly from their laptop or their mobile device while sitting at home and watching TV. Businesses has recognised this trend, which is the reason for the proliferation of online traders. It is also one of the easiest ways to start a business – just find a product or service you think people will buy, set up your website and start selling.
It may look easy and hassle free, however there are a number of legal obligations online businesses should abide to. Since consumers are the weaker party, their protection comes first and this is recognised by all legislators. This article will elaborate on the mandatory legal duties online retailers and service providers have under UK law, and what level of protection is afforded to consumers.
Introduction to UK consumers law
Distance selling of goods and services in the UK is governed by the Consumer Contracts Regulations, which came into force in 2014, implementing the EU Consumer Rights Directive. These laws govern important issues such as mandatory provision of information, cancellation rights, returning faulty goods and others. All traders who sell goods or services online should abide by these rules and implement the prescribed practices in their business.
In case of a distant selling transaction, the consumer does not have the possibility of negotiating terms face to face or even seeing the goods before the delivery is made or the service is completed. Therefore, legislators impose certain information obligations on the traders so that consumers are able to make an informed choice about their purchases.
Under the Consumer Contracts Regulations, businesses should provide consumers with at least the following information:
- A description of the goods or services.
- The total price of the goods or services, or in case the price cannot be determined, the way it will be calculated.
- Delivery costs and arrangement as to who pays the price in case of returning delivery if right to cancel is exercised.
- Details of the right to cancel if it exists – including applicable procedure.
- Information about the seller, including company name and details, geographical address and contact details
There are also additional information requirements which apply in specific cases. More information can be found here.
In case the trader complies with its information obligations, the right to cancellation may be extended by a year.
Right to cancel
With regard to purchasing goods online, the consumer has the right to cancel the contract within 14 days from the day they received the goods. If the order consists of more than one item, the period starts to run from the time the last item is received. This period can be extended by one year if the information requirements have not been met, so you need to make sure you comply with them.
As a trader, you are obliged to provide a refund to the consumer within 14 days of the day you got the goods back, or within 14 days of the day you received an indication the goods have been sent back, whichever is the sooner.
There are however a number of exemptions to the right of cancellation. These include personalised items and perishable goods, as well as CDs or software, if the seal and packaging have been broken.
You also need to note that this is the minimum cancellation period which has to be afforded, you may wish to provide a longer period, but you need to include this in your Terms and Conditions.
When dealing with services, the customer again has the right to cancel within 14 days; however you may charge them for the time they used the service within this period. Also, if the service is provided in full within the said period, the right to cancellation may be suspended.
Exemptions apply also to services. Hotel bookings, car hires and flights, for example, are services which cannot be usually cancelled. Whatever the case is, make sure you describe everything properly in your Terms and Conditions.
With regards to digital downloads, traders must not supply the download to the customer until expiration of the 14day period, except with the explicit consent of the consumer. Moreover, consumers shall be informed that once they download the software they lose their right of cancellation.
Returning faulty goods
Consumers also have the right to return any goods that are faulty or do not match the description. In that case, the business always has to bear the costs of the return delivery.
Businesses should be aware of the rights of their customers, in order to retain high customer satisfaction rates, as well as avoid legal disputes. By complying with the rules laid down in this article, you will have happy customers and achieve legal compliance. Also knowing what the other party’s rights are helps you understand their position, and admit fault when in breach, thus avoiding further conflicts you will most probably lose.