The amendments are being made to the Consumer Protection
(Distance Selling) Regulations of 2000, which were based on a
European Directive. The Regulations apply to sales to consumers 'at
a distance' – be it over the internet, by mail order, telephone,
fax or digital TV.
Consumers were given new rights in the Regulations, including a
minimum period of seven working days during which they can cancel
any contract concluded at a distance. The rules also specified
certain information that must be given to consumers before they
buy, which can be displayed on a web site or described over the
telephone, and additional information that must be given before or
shortly after concluding a contract in writing (which can be by
e-mail).
When the contract is for services rather than goods, such as
taking out a mobile phone contract, the Regulations said that the
key written details must be provided prior to the conclusion of the
contract, or "thereafter, in good time and in any event [...]
during the performance of the contract."
They also said that, prior to the conclusion of a contract for
the supply of services, "the supplier shall inform the consumer in
writing [...] that, unless the parties agree otherwise, he will not
be able to cancel the contract [...] once the performance of the
services has begun with his agreement."
Some suppliers found this difficult. Sometimes the
order would be placed over the phone, with the hire to begin
the same day. The supplier could not get anything in writing to the
consumer – leaving it open to the consumer to withdraw.
The main difference from today is that a supplier no longer
needs to inform the consumer in writing before the
contract is made that he will not be able to cancel the contract
once the supply of services has begun.
Instead, the supplier must, in such cases, provide the consumer
with information as to how the right to cancel may be affected if
the consumer agrees to performance beginning less than seven
working days after the contract was concluded. This information
must be provided prior to or in good time during the performance of
the contract.
There is still an incentive for suppliers of service to get the
written information to consumers as soon as possible, because the
longer it takes to provide this information, the longer the
consumer has to cancel the contract, even after the provision of
services has begun.
Gavin McGinty, an e-commerce lawyer with Pinsent Masons, the law
firm behind OUT-LAW.COM, said:
"This could have serious knock-on consequences for a company's
stock control and balance sheet. Smart companies, therefore, will
send this information out as soon as possible after the order,
which makes them seem consumer friendly, but which is also
protecting their position."
Other parts of the original Regulations are amended so that:
- where a supplier of services provides the written confirmation
before performance of those services begins and the consumer agrees
to such performance beginning before the end of the cooling-off
period, there is no right to cancel; and
- where a supplier of services provides that information in good
time during the performance of the services, there is a right to
cancel even if the consumer agrees to performance beginning within
seven working days of the contract being concluded, but the
cooling-off period begins when the consumer receives the
information and ends seven working days later or when performance
is completed (whichever is the sooner).
Since the changes were agreed by the DTI some months ago their
value has been significantly undermined by the
European Court of Justice's ruling in the EasyCar case.
The changes to the Regulations were originally suggested in
response to comments from the BVRLA, the trade association for the
car hire industry. However, the European Court has recently decided
that car hire companies can now take advantage of an exemption
applying to "transport services", meaning that they are exempted
from having to provide a cancellation period to consumers.
Disclaimer: We hope you find OUT-LAW’s content useful. It’s prepared by the lawyers at Pinsent Masons. Please remember, though, that it’s intended as general information only. It’s not legal advice. If that’s what you’re seeking, please
contact us. See also: our
full disclaimer
