The UK's Distance Selling Regulations
This guide is based on UK law. It was last updated in
October 2008.
Introduction
The Consumer Protection (Distance Selling) Regulations 2000 (the
"Regulations") came into force in the UK on 31st October 2000.
The Regulations aim to protect consumers contracting at a
distance from the supplier, where the consumer does not have the
benefit of meeting face to face with the supplier and inspecting
the goods or services offered for sale.
Essentially the Regulations provide consumers with a right
to:
- receive clear information about the supplier, the goods or
services and the sale before deciding to buy;
- confirmation of this information in writing;
- a cooling off period of 7 working days in which to withdraw
from the contract; and
- protection from payment card fraud.
In December 2007 the OFT worked with the Local Authority Trading
Standard Services (TSS) to conduct a web sweep of 530 websites to
assess whether online retailers are complying with the key
requirements of the Regulations. The OFT reported its
findings in March 2008 and in particular, noted a failure among
retailers to provide adequate contact details and transparency in
cancellation and refund rights.
Rather than cover all details of the Regulations, this article
highlights the most important requirements including those
considered by the OFT and TSS in their web sweep.
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Contents
Quick links to the sections of this page:
When do the Regulations apply?
The Regulations apply to distance contracts. These are
contracts:
- for the sale of goods or the provision of services;
- concluded between a supplier and a consumer (note that
business to business distance selling is not
caught by the Regulations);
- under an organised distance sales or service provision scheme
run by the supplier (which will cover, for example, sales made
through a call centre or from a website; but one-off contracts
concluded by email are not intended to be caught by the
Regulations);
- where the supplier communicates with the consumer without ever
coming face to face with the consumer in concluding the contract
(i.e. by 'distance communication').
Distance communication would include:
- web pages
- unaddressed or addressed printed matter (this could include
leaflets dropped through letter boxes);
- letters;
- press advertising with order forms;
- catalogues;
- telephone with or without human intervention;
- email;
- fax; and
- television (teleshopping).
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Exempt distance contracts
The Regulations do not apply to all distance contracts and there
are a number of exemptions from some or all of the provisions of
the Regulations.
The Regulations do not apply to:
- most contracts for the sale or transfer of land or for building
on land, except short rental agreements;
- contracts for the supply of financial services;
- contracts concluded by means of an automated vending machine or
automated commercial premises (e.g. pictures taken from an
automated photo booth);
- contracts by telephone through the use of public pay-phones;
or
- contracts concluded at auction (although OFT guidance on the
Regulations suggests that it must be a genuine auction in order to
qualify for the exemption – "buy it now" slots on internet auction
sites will not be exempt as such sales are not concluded by a
process of auction).
Separate regulations control the sale of financial services at a
distance. See the OUT-LAW
guide on The Distance Marketing of Consumer Financial
Services.
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Part exempt distance contracts
In addition, some parts of the Regulations do
not apply to:
- contracts for the supply of food, beverages or other
goods intended for everyday consumption supplied
to the consumer's residence or to his workplace by regular
roundsmen (e.g. a milkman, but not a supermarket); and
- contracts for the provision of accommodation,
transport, catering or leisure services, where the
supplier undertakes, when the contract is concluded, to provide
these services on a specific date or within a specific period.
The European Court of Justice decided in the EasyCar case that
car hire companies can take advantage of the exemption applying to
"transport services". See the
European Court of Justice's ruling in the EasyCar case.
The exemption for all of these part exempt contracts is in
respect of the provisions relating to:
- information given to the consumer prior to the conclusion of
the contract;
- written confirmation;
- cancellation rights;
- recovery of money paid by the consumer;
- return of goods by the consumer after cancellation;
- goods given in part exchange; and
- mandatory performance of the contract within 30 days.
Each of these provisions is discussed in more detail below.
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What are the requirements of the Regulations?
The Regulations require a supplier to:
- Give consumers certain information prior to conclusion of the
contract.
- Give consumers confirmation in writing or in another durable
medium which is available and accessible to the consumer (email is
acceptable, but providing the information on a website is not), of
the prior information and also provide consumers with additional
information (e.g. in respect of cancellation rights). The term "in
writing" is used as a convenient shorthand and in this article "in
writing" should be read as including "or in another durable medium
which is available and accessible to the consumer".
- Refund consumers within a certain time period.
- Perform the contract within a certain time period.
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Prior information
A distance contract will not be enforceable against a consumer
unless the supplier has provided to the consumer in good time
prior to the conclusion of the contract the
following information:
- the identity of the supplier and (where the contract requires
payment in advance) the supplier's address;
- a description of the main characteristics of the goods or
services;
- the price of the goods or services (including all taxes);
- delivery costs, where appropriate;
- the arrangements for payment;
- the arrangements for delivery or performance of the service
(e.g. when the customer can expect delivery of the goods or
performance of the services);
- the existence of a right to cancel;
- if the consumer is to use a premium rate telephone number, the
cost of the call must be specified before charges are incurred for
the telephone call;
- how long the price or any special offer remains valid;
- the minimum duration of the contract in the case of a contract
to supply goods or services continuously (e.g. in a contract for a
mobile phone or for cable TV services), or recurrently (e.g. in a
contract with a monthly book club);
- whether or not substitute goods or services may be provided in
the event of those ordered by the customer being unavailable;
and
- notification that the supplier will meet the costs of the
consumer of returning any substitute goods he or she does not
want.
This prior information must be provided in a clear and
comprehensible manner which is appropriate to the means of
distance communication used (e.g. if the customer has contacted the
supplier by email, it may be reasonable for the supplier to provide
the prior information by email).
If a business cold calls consumers by telephone, there are
special rules regarding any distance contract concluded during the
course of the conversation. The contract will not be enforceable
unless, at the beginning of the conversation, the supplier has made
its identity and the commercial purpose of the telephone call
explicitly clear.
In the case of a dispute about cold calling contracts, the
supplier must prove that the information was provided in accordance
with the Regulations. However, this requirement should not cause
too many difficulties as it can be built into the telescript quite
easily and, in any case, most suppliers operating over the phone
would have to provide such information in order to comply with data
protection legislation.
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Written confirmation and additional information
Suppliers must provide the consumer with confirmation of the
prior information otherwise they will not be able to enforce the
distance contract. This confirmation must be in writing, e.g. by
email.
In addition to confirming the prior information, the supplier
must also provide the following information to consumers in
writing:
- the conditions and procedures to enable the consumer to cancel
the contract;
- whether the consumer must return the goods to the supplier if
the consumer cancels;
- whether the consumer or the supplier is responsible for the
cost of returning the goods to the supplier if the consumer
cancels;
- in the case of contracts for the supply of services,
information on the consequences of agreeing to performance of a
service starting before the end of the usual 7 working day
cancellation period (see "Exceptions to the
right to cancel" below);
- the geographical address of the place of business of the
supplier to which the consumer may address any complaints;
- information on any after-sales services and guarantees;
and
- the conditions for cancelling the contract, where it is of an
unspecified duration or a duration exceeding one year.
This information must be given to the consumer either:
- prior to the conclusion of the contract, or
- in good time before or during the performance of the contract
and, in contracts for the sale of goods, at the latest at the time
of delivery of the goods where goods not for delivery to third
parties are concerned. This means that where consumer A orders
goods to be despatched to consumer B, the information must be given
to consumer A prior to the conclusion of the contract.
A supplier can meet these information requirements by setting
out the information in its terms and conditions and providing
consumers with the terms and conditions prior to conclusion of the
contract. For example, an online retailer might provide a
copy of the terms and conditions by email at the point of notifying
the consumer of receipt of the consumer's order.
The supplier in a contract for the supply of services shall not
be subject to the obligations to provide written confirmation and
additional information where those services are supplied on only
one occasion and are invoiced by the operator of the means of
distance communication.
However, the supplier must take all necessary steps to ensure
that the consumer in such a one-off contract is able to obtain the
supplier's geographical address and the place of business to which
the consumer may address any complaints.
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Right to cancel
Under the Regulations a consumer can cancel a distance contract
at any time during the "cancellation period" by
notifying this intention to the supplier in writing. A contract
which is cancelled must be treated as if it had never been entered
into by the consumer. For example, if the consumer has entered into
a credit agreement in order to purchase the goods, that agreement
must also be cancelled at the same time as the distance
contract.
In both contracts for the sale of goods and contracts for the
supply of services the cancellation period begins on
conclusion of the contract. However, the duration of the
cancellation period varies depending on the stage at which the
written confirmation and additional information is provided. The
earlier the information is provided, the shorter the cooling off
period will be. The following is an outline of the various
cancellation periods that may arise:
Cancellation periods for goods
- where written confirmation and additional information is
provided before or at the time of delivery of the
goods, the cancellation period is 7 working days beginning
with the day after the day on which the goods are delivered;
- where the written confirmation and additional information is
provided after the goods are delivered but within a period
of three months beginning with the day after the day on
which the goods are delivered, the cancellation period will end
after 7 working days beginning with the day after the day on which
the written confirmation and additional information is
provided;
- Example: the written confirmation and additional information is
provided to a new customer three weeks after he placed an order.
The cancellation period will be 7 working days from the day after
the date the written confirmation was provided.
- where the obligation to give written confirmation and
additional information is not fulfilled within
three months beginning with the day after the day on which the
goods are delivered, the cancellation period ends after three
months and 7 working days from the day after the day on which the
goods are delivered.
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Cancellation period for services
- where the written confirmation and additional information is
provided on or before conclusion of the contract for
services, the cancellation period is 7 working days
beginning with the day after the day on which the contract for
services is concluded;
- where the written confirmation and additional information is
provided after the contract for services is concluded but
within a period of three months beginning with the
day after the day on which the contract is concluded , the
cancellation period will end after 7 working days beginning with
the day after the day on which the written confirmation and
additional information is provided;
- where the supplier has the consumer's consent to begin
performance of the services before the usual 7 working day
cancellation period expires and the written confirmation and
additional information is provided before performance of
the services begins, the cancellation period ends when the
performance of the services begins;
- where the supplier has the consumer's consent to begin
performance of the services before the usual 7 working day
cancellation period expires but the written confirmation and
additional information is not provided on or before the day on
which performance of the services begins but is provided in good
time during the performance of the contract, the cancellation
period will end after 7 working days beginning with the day after
the day on which the written confirmation and additional
information is provided (provided the right of cancellation is
still useful) or when performance is completed (whichever is
sooner);
- where the obligation to give written confirmation and
additional information is not fulfilled within
three months beginning with the day after the day on which the
contract for services is concluded, the cancellation period is the
period of three months and 7 working days from the day after the
day on which the contract is concluded, regardless of
whether performance of the services has begun or has been
completed.
It is, of course, open for suppliers to offer longer
cancellation periods under their own contract terms, provided they
do not mislead consumers about the rights they have under the
Regulations or other legislation, e.g. the Sale of Goods Act 1979
and the Supply of Goods and Services Act 1982.
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Exceptions to the right to cancel
Unless the parties have agreed otherwise, the consumer will not
have the right to cancel in respect of certain distance contracts.
This applies to the following contracts:
- for the provision of services, if the performance of the
contract has begun with the consumer's consent before the end of
the usual cancellation period and the supplier has provided the
written confirmation and additional information before commencing
performance of the services (including information that the
cancellation rights will end as soon as performance of the contract
begins);
- for the supply of goods or services which are priced according
to fluctuations in the financial market and cannot be controlled by
the supplier;
- for the supply of goods which by means of their nature cannot
be returned (e.g. personalised goods) or are likely to deteriorate
or expire rapidly (e.g. dairy products);
- for the supply of audio or video recordings or computer
software which were unsealed by the consumer;
- for the supply of newspapers, periodicals or magazines; or
- for gaming, betting or lottery services.
- Note that the guidance issued by the BERR (previously DTI)
states that preparatory work to providing a service (such as
setting up an account) cannot be equated to the carrying out of a
service. This may impact on the right of businesses to say that the
provision of a service has begun and therefore cannot be
cancelled.
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Refunds
On the cancellation of a contract, any sum paid by the consumer
must be repaid as soon as possible and, in any case, within 30 days
of cancellation. The full price paid for the goods must be refunded
and this includes the cost of delivery of the goods to the
consumer.
In certain circumstances the supplier may charge the
consumer for the cost of the supplier recovering the goods (e.g.
where the consumer fails to return them). To do so, the
contract must specify that the consumer is under an obligation to
return the goods if he or she cancels the contract and the consumer
gets notice of this in advance as part of the written confirmation
relating to the right to cancel. The costs cannot be passed on to
the consumer where the goods are returned because they are faulty
or do not comply with the contract for some other reason.
Where the supplier wishes to send substitute goods (e.g. where
the original goods ordered are not in stock, but similar goods are
available), the supplier must have provided for the possibility of
sending substitute goods in its contract and in the case of the
consumer cancelling the contract and returning the goods, the
supplier must bear the cost of such return.
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Return of goods by consumer after cancellation
If the consumer has received the goods before cancelling the
contract, the consumer will be under a duty to restore those goods
to the supplier and, in the meantime, to keep them and take
reasonable care of them. This duty to take reasonable care ends if
the consumer (at his own expense) sends the goods to the
supplier. The consumer is under no obligation to deliver the
goods to the supplier except at the consumer's own premises and in
pursuance of a written request by the supplier.
Note that failure by a consumer to return goods will not
permit the supplier to delay in making a refund.
Similarly, if a consumer returns damaged goods he or she does not
necessarily lose the right to cancel. The supplier can only rely on
the right of action against the consumer for breaching the
statutory duty to take reasonable care of the goods.
If, within 21 days following cancellation of the distance
contract, the supplier requests the consumer to return the goods
and the consumer unreasonably refuses or unreasonably fails to
comply with the request, the consumer's obligation to retain
possession and take reasonable care of the goods continues until he
delivers the goods to the supplier.
If the supplier fails to request the return of the goods within
21 days following cancellation of the distance contract, the
consumer's obligation to take reasonable care of the goods ceases
at the end of the 21 day period.
Where the supplier is holding any sum as security, the consumer
is not under an obligation to return the goods after cancellation
until the supplier discharges any duty on him to release the
security under the Regulations.
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Goods given in part-exchange
In a situation where the supplier had agreed to take goods in
part-exchange and those goods have been delivered to him, if the
consumer cancels, the supplier must return the part-exchange goods
in a condition substantially as good as they were delivered within
ten days of the cancellation, otherwise the consumer is entitled to
a sum equal to the part-exchange allowance.
If no part-exchange allowance was agreed, the sum shall be what
would be reasonable to allow for the part-exchange goods if no
notice of cancellation had been served.
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Performance of the contract
Unless the parties agree otherwise, the supplier must perform
the contract within 30 days from the day after the consumer sent
his order to the supplier.
If the supplier is unable to perform the contract within this
period, he must inform the consumer and repay any sum paid as soon
as possible (and in any event within 30 days), although it is open
to the supplier and the consumer to agree a revised date for
delivery.
A contract which is not performed within the 30 day period shall
be treated as if the consumer never entered into it, but the
consumer will still have remedies for non-performance.
If a longer period than 30 days is required then this must be
clearly stated in the supplier's terms and conditions and the prior
information. The supplier may perform the contract by substitute
goods or services of equivalent quality and price if the contract
provided for this possibility and the supplier gave the consumer
the prior information in the appropriate way.
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Payment by card
Where fraudulent use has been made of a consumer's payment card
in respect of a distance contract then the consumer will be
entitled to cancel any payment which has been made as a result of
such fraudulent use.
Note that the Regulations refer to "payment card" and not simply
credit card. This means that debit cards, charge cards and store
cards will be afforded protection under the Regulations as well as
credit cards.
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Inertia selling / unsolicited goods
It is an offence under the Regulations for a supplier to send
unsolicited goods and then demand payment or threaten legal
proceedings to get payment for the goods. The recipient of the
goods may use, deal with or dispose as if they were an
unconditional gift.
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No contracting-out
Any term in a distance selling contract which is inconsistent
with the protection of the consumer as set out above shall be
automatically void and as such, the supplier will not be able to
rely on the term.
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Enforcement
The Regulations are enforced by the Office of Fair Trading,
local authority trading standards departments in England, Scotland
and Wales and the Department of Trade, Enterprise and Investment in
Northern Ireland. These bodies have the power to consider
complaints and seek court orders for compliance with the
Regulations.
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Guidance
The BERR (previously DTI) and OFT have produced comprehensive
guidance that is intended to inform businesses of their duties
under the Regulations. The guidance helps to clarify certain areas
of the Regulations, and provides practical advice to suppliers on
their obligations.
The key areas include:
- guidance on consumers' rights of cancellation and time limits
for cancelling orders;
- practical advice on when refunds can and cannot be lawfully
refused and what should and should not be refunded;
- information on how consumers are expected to exercise rights to
cancel in practice; and
- information on the relationship between the E-commerce
Regulations and the Regulations, and how the interaction between
these two pieces of legislation affecting e-tailers is to be
resolved.
The guidance also contains specific advice for various types of
supplier, including online auctions, online supermarkets, online
booking agencies, computer sellers, music and software retailers
and sellers of downloads.
See:
A guide for businesses on distance selling, from the
OFT (48-page / 127KB PDF)
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