Availability of previews to digital content should determine consumers' rights to refunds, says expert

Commercial law expert Clare Francis of Pinsent Masons, the law firm behind Out-Law.com, said that new consumer protection laws to be introduced by the Government should take account of whether previews of digital content are offered by online retailers.

In the Queen's Speech on Wednesday it was announced that the Government would establish a "simple set of consumer rights to promote competitive markets and growth" during the next Parliamentary session.

Last year the Government consulted on a new Consumer Bill of Rights which would consolidate a raft of consumer protection laws currently in existence in the UK. The draft Bill set out new rights for consumers relating to digital content.

Under the plans businesses would be allowed to deduct money from any refunds they make to consumers for the use consumers have made of faulty goods, service or digital content.

However, in a response to the Government's consultation on its Consumer Bill of Rights proposal, the Office of Fair Trading (OFT) criticised plans to charge consumers for use of digital content during the cooling off period.

"The consumer has paid for the entire content and in order to repurchase will then have to pay the full price for a new item as it is not possible to pay for part of a film which has been downloaded, a CD, DVD or similar," the OFT said. "Even if this were possible, the consumer’s expected experience of the digital content has been reduced. The consumer should be entitled to a full refund in order to be able to purchase the product again. There are also likely to be disputes over what is a reasonable deduction as it appears it will be at the supplier’s discretion to set the amount deducted and the consumer will have little leverage to negotiate."

Francis said, though, that businesses that offer digital content for sale should generally not be forced to provide refunds at all where they have provided consumers with a preview of what they are buying.

"The existing Distance Selling Regulations give consumers seven working days after receiving goods to change their minds about a purchase and return products without a charge," Francis said. "This 'cooling off' period accounts for the fact that consumers buying online are unable to try products before they purchase in the same way that they can in the shops."

"The Government's plans to allow retailers to deduct from refunds where consumers have made use of digital content during this cooling off period – which the Government is set to expand to 14 days – is controversial. On the one hand it prevents consumers from abusing their rights by, for example, downloading a film, viewing it, and then deciding to 'return' it. On the other, it means consumers cannot benefit from full rights to refund in the event that they decide that digital content they have downloaded is not to their taste."

"The Consumer Bill of Rights should take account of cases where consumers are given a preview of digital content available to download," Francis said. "Consumers who have access to a preview should have their rights to refund removed entirely except where they can show that digital content does not meet quality standards, which the Government has yet to define.  Where a preview is not available, consumers should be eligible for full rights to a refund during the cooling off period."