Is your business ready for the introduction of the new Consumer Rights Bill?
The legal landscape in relation to consumer law will never be the same again. Legal commentators have already dubbed 2014 as "the year of the consumer" and on 13 June 2014 the Consumer Rights Directive (the "Bill") will take effect, providing consumers with a larger sword and stronger shield to protect their rights. Is your business ready for the consumer revolution?
What is this Bill everybody keeps talking about?
The Bill has been designed to revamp, harmonise and consolidate the current fragmented consumer legislation by enhancing consumer rights, bringing the old consumer law regime up to date with the "digital age" and creating a synchronised system designed to reduce overall compliance costs and simplify the consumer processes for businesses engaged in cross-border transactions.
Will my business be affected by this consumer revolution?
The introduction of stringent provisions governing consumer law will put an increased burden on businesses to update existing policies and review their sales processes. If your business sells goods and/or services to consumers, either on-premises, off-premises (door-to-door sales) or by distance contracts (sales by phone, post or online) then you will be affected by the introduction of the Bill.
What is going to change?
The implementation of the Bill is rapidly approaching and the major changes will include:
- an obligation to provide specific pre-contractual information (e.g. the main characteristics of the goods, total price including tax and the identity of the trader);
- extending the minimum "cooling off period" for distance contracts to 14 calendar days from receipt of goods, with a further possibility of extension to 12 months for failure to provide cancellation information to the consumer at the appropriate time;
- confirmation of the contract by letter/email to the consumer no later than the time of delivery of the goods or performance of the services;
- an obligation to provide a refund to a consumer within 14 calendar days, including any the refund of any delivery costs;
- extending the maximum period granted for delivery of goods to 30 days, with risk passing only when the consumer has taken physical possession of the goods;
- ensuring consumers explicitly acknowledge their obligation to pay when placing online orders by labelling "order buttons" with clear wording such as "order with obligation to pay";
- a ban on pre-ticked boxes on websites to avoid consumers unwittingly incurring additional charges;
- a ban on excessive payment "surcharges" prohibiting businesses from charging surcharges that exceed the cost to the business of using such payment methods;
- an obligation to provide specific information on the functionality, operability and price of digital downloads;
- a ban on charging premium rates on telephone help-lines, the consumer will be entitled to reimbursement for any excess charged on the basic service provider rate; and
- in relation to selling unsolicited goods (i.e. goods or services that the consumer did not order or request) consumers will be exempt from having to pay/return unsolicited goods and may treat them as a gift. Please noteit is a criminal offence to demand payment for unsolicited goods from a consumer.
Prevention is the best protection…
In order to protect your business we suggest you take the following steps:
- consider the proposed changes and review your existing sales processes;
- check and update your current terms and conditions and seek to align them with the proposed changes affecting your business;
- review your website and any pages relating to online payments/order functions to make sure they are clearly labelled with reference to the consumers' obligation to pay when placing an order;
- if your business makes any marketing claims relating to consumers you may wish to update them to ensure that they accurately reflect the consumers' new position;
- update your cancellation, returns or distance selling policies to ensure that they comply with the Bill; and
- revisit and amend your delivery policies to include the new delivery related provisions.
If you have any questions or require specific advice on any matter discussed in this publication, please contact us on 0330 123 1229.