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The countdown to Christmas - complying with the distance selling regulations

14 November 2012

Perhaps not surprisingly, one of the main goals of the Office of Fair Trading (OFT) is to ensure that consumers can shop confidently online.

In an assertive challenge, 62 of the UK’s top retailers have recently been contacted by the OFT following an audit of the country’s top online traders. They have been given until Christmas to bring their websites in line with the Consumer Protection (Distance Selling) Regulations 2000 (DSRs). Traders that do not make the necessary changes to ensure they comply with the law risk formal enforcement action from the OFT or Local Trading Standards Services.

The OFT is keen to deal with consumers’ lack of awareness of their rights when shopping online. The main issues found throughout its audit include.

  • a lack of detail with regard to cancellation rights
  • unreasonable restrictions on customers’ rights to a refund (such as requiring goods to be returned intact in the retailer’s original packaging, thereby not allowing proper inspection of the item)
  • a lack of clarity around returns – for example explaining how and when a full refund is due
  • no contact email address being listed, which is a legal requirement further to the E-Commerce Regulations. In some cases, no contact details were listed at all
  • additional compulsory charges being added without previous clear notice, at various points throughout the online transaction, including at the checkout

The OFT’s approach

The OFT first threw the spotlight onto online shoppers’ rights in 2007 when it published the ‘Internet Shopping Market Study’. Then in 2010 the E-Protection Strategy was published, which suggested there were poor levels of business compliance with consumer protection law and in particular the DSRs. This latest step by the OFT shows its determination to encourage retailers to ensure their online selling practices are up to scratch.

The OFT has not, however, gone on the offensive against retailers – indeed it has put much effort into constructing accessible, easy to use facilities to help both consumers and online traders get to grips with their rights and obligations. The Distance Selling Hub sets out the key issues identified and how they can be rectified.

The OFT has also produced a short video to help consumers understand their rights when they are shopping online. The video, ‘Buying online: know your consumer rights’ is available on YouTube

Satisfying the DSRs – in a nutshell

There are many legal points a retailer needs to be aware of, including:

  • the consumer is entitled to a 7 working day ‘cooling-off’ period before their basic right to cancel an online contract expires
  • upon cancellation, the consumer is entitled to a full refund of the price of the goods (including any deposit or pre-payment made) as well as the costs of initial delivery
    in all circumstances, the retailer must cover the costs to return substitute goods, or goods which do not comply with the contract (ie. if they are faulty)
  • the retailer must provide a description of the main characteristics of the goods or services being offered online
  • all details relating to the cost of the goods, as well as packaging, delivery and any taxes (such as VAT) must be set out clearly
  • the costs of any premium rate phone numbers must be expressly listed

In summary

The list above is by no means exhaustive. Retailers must accept that as the popularity of online shopping grows, consumers will become more savvy about their rights.

In order to protect themselves from potential costly litigation, online traders must understand how the DSRs apply to their business, what information they are legally required to give to consumers and the processes they need to have in place to manage orders, deliveries, cancellations, returns and consumer complaints.

For further information about website terms and conditions of sale, and how the regulations might affect your business, please contact: Dinah King on +44 (0)115 976 6076 or dinah.king@brownejacobson.com. Ask about our fixed rate website audit service.

Browne Jacobson offers the full range of legal services for retailers and is proud to act for some of the biggest names on the high street.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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