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Failing to inform online consumers about cancellation rights should be criminal offence, say trading standards bodies


Businesses that sell goods and services to consumers over the internet should face criminal penalties if they fail to display details on cancellation rights, the Trading Standards Institute (TSI) and Association of Chief Trading Standards Officers (ACTSO) has said.

In response to a consultation (11-page / 197KB PDF) run by the Government on draft new consumer protection rules, TSI and ACTSO said that it should be a criminal offence for traders that form 'distance contracts' with consumers to fail to present those individuals with information on their cancellation rights. 

"We feel that the offence of failing to give information to consumers about the cancellation of 'off-premises contracts' should be extended to include 'distance contracts'," the two bodies said. 

Off-premises contracts are different to distance contracts. Distance contracts concern agreements between two or more parties based in separate locations, such as over the telephone or internet. Off-premises contracts are sales transactions entered into at locations which are not the businesses' premises, and include deals concluded by door-to-door salesmen, for example. 

UK laws on selling over the internet are mainly set out in the Distance Selling Regulations. The Regulations give shoppers specific legal protections and different cancellation rights from those buying in store. 

Among the provisions is a requirement that businesses generally must supply goods within 30 days or pay a refund. The regulations state that in most circumstances online purchasers have the right to cancel an order they made within seven days of the goods being delivered and receive full refunds. Online customers are also entitled to a full refund for goods or services not provided by the date agreed with a business, the Regulations provide. 

In August the Government outlined plans to update the existing Consumer Protection from Unfair Trading Regulations (CPRs) to give consumers new rights to redress in respect of misleading and aggressive commercial practice. 

However, in its response to the consultation the Office of Fair Trading (OFT) said (8-page / 138KB PDF) the Government's proposals would not provide a right of redress "for potentially quite serious types of cases where we strongly believe that it should be" available. 

In addition, the OFT said that businesses should not be able to avoid liability for damages in civil cases for "indirect economic loss, distress or inconvenience" suffered by consumers on the basis that they have complied with due diligence requirements. 

"A due diligence defence does not prevent civil liability under the CPRs, only criminal liability," the OFT said. "We strongly believe that it should not prevent claims for losses caused by an unfair commercial practice. Therefore we don’t agree that a due diligence defence ought to be included in the Regulations that mirrors the defence in the CPRs." 

"If included as drafted it will make it hard for consumers to consider whether to make a claim as they will have no way of knowing in advance whether a trader will be able to establish the defence, and could find themselves exposed to costs if not successful in their claim (even if successful in claiming the other rights). We disagree with the suggestion that adoption of the due diligence defence offers the simplest and most consistent approach given that the defence is, in fact, only available to traders in criminal actions and does not apply in civil actions," it added.

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