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Warners Solicitors
Michael McNally
29 October 2012
1. Consumer
Protection (Distance Selling)
Regulations 2000
(as amended)
Purpose and application of the “Distance Selling” Regulations
• To give customers cancellation rights in relation to contracts for
the sale of goods or services.
• To ensure that the seller supplies information to the customer in
advance of the contract being concluded.
• In short, to give customers a “cooling off” period after purchase
during which they can change their minds and cancel the
contract.
Our Clients
• In a shop sale, the purchaser cannot return the goods or ask for a refund once he has
bought the goods just because he has changed his mind (except where goods are
defective, where legislation such as the Sale of Goods Act applies).
• Shops which give a no fault money back guarantee choose to do so as a marketing
tool.
• The Distance Selling Regulations apply to a contract where the seller and the
customer are not in the same place at the time the contract is made and where the
contract is concluded by some form of distance communication.
• Whether the Regulations apply when a customer orders goods in specially on the
understanding that she will buy them and then she doesn’t will depend on the
circumstances. If goods are ordered by a distance method, the Regulations will apply.
Sale of goods in a shop vs sale at distance
Our Clients
• “Business” – “a trade or profession” – i.e. the definition is very wide.
• “Consumer” – “any natural person who is acting for purposes which are outside his business”.
• “Supplier” – “any person…acting in his commercial or professional capacity” – i.e. the Regulations don’t apply to business to business sales – only to business to consumer sales.
• “Distance contract” – “any contract concerning goods or services concluded between a supplier and a consumer under an organised distance sale or distance provision scheme run by the supplier who makes exclusive use of one or more means of distance communications...”
• “Means of distance communications” – “any means which, without the simultaneous physical presence of the supplier and the consumer, may be used for the conclusion of a contract…”. Schedule 1 sets out examples:
• Telephone with human intervention.
• Email.
• Fax.
Regulation 3 – Interpretation
Our Clients
The Regulations don’t apply to various contracts, including:
• The sale of land.
• The construction of a building where land is also sold.
• Financial services.
• Sales at auction.
Regulation 5 – Excepted contracts
Regulation 6 – Contracts to which only part of these Regulations apply
• Timeshares.
• Delivery of food and drink to a purchaser’s house or place of work.
• Contracts for the provision of accommodation, transport, catering or
leisure within a specified period.
Regulations 7 to 19(1) don’t apply to such contracts, which is in practice
almost all the distance selling provisions.
• Package holidays (because they are covered by the Package Travel,
Package Holiday and Package Tours Regulations 1992).
• Unsolicited services (because they are covered by other regulations).
Regulation 7 – Information required prior to the conclusion of the contract
The seller must supply key information to the customer:
(2) “…the information [must be] provided in a clear and
comprehensible manner appropriate to the means of distance
communication used…”
At this stage, therefore, the information could, for example, be
provided by telephone if the customer’s enquiry is by telephone.
The information must be provided in good time before the
conclusion of the contract.
The information which the seller has to supply is:
• The seller’s name and contact details.
• Details of the goods or services.
• The price of the goods or services (and delivery charges and cost of
distance communications where calculated other than at basic rate) and
the period for which the price remains valid.
• Delivery arrangements.
• The existence of the right to cancel.
• The minimum duration of the contract where the goods or services are
to be supplied recurrently.
• Any proposal by the supplier to provide substitutes of equivalent price
and quality (in which case, the cost of return must be met by the
supplier).
Regulation 8 – Written and additional information
This requires the seller to supply certain information in writing or another durable medium at the latest at the time of delivery of the goods or, in the case of services, during the performance of the contract.
The information which the seller has to supply is:
• The information required under Regulation 7 (i.e. the information which the seller has already had to supply).
• Details of the customer’s cancellation rights under Regulation 10.
• Where the goods are to be returned to in the event of cancellation and who pays for that.
• Address for complaints.
• Information about after sales service and guarantees.
• Conditions for exercising the contractual right to cancel where there is a contract of unspecified duration or exceeding a year.
NB. The term “durable medium” does not include referring the customer to a website because (a) this requires active steps to be taken by the customer and (b) a website’s contents can be changed by the seller after the customer has viewed it
Regulation 10 – Right to cancel and Regulation 11 – Cancellation period in the case of contracts for the supply of
goods
The customer can (in writing or other durable medium) cancel his purchase within the
cancellation period, which is seven days beginning with the day after the day the
purchaser receives the goods.
However, if the seller fails to supply the statutory information under Regulation 8 on
time, the customer has seven days to cancel, beginning with the day after he eventually
receives the statutory information. Furthermore, where the seller fails to supply the
statutory information at all, the customer may cancel for up to three months and seven
days, starting from the day after the customer receives the goods.
NB. The provisions also apply in the event of delivery of goods to a third party.
The customer can cancel by sending a notice by hand, fax, post or email.
Notice is treated as having been given at the time of sending, leaving or posting.
Regulation 12 – Cancellation period in the case of contract for the supply of services
• The cancellation period in relation to services begins with the day after the contract is concluded and ends after seven days.
• Where the seller is late in giving the statutory information but does provide it within three months (beginning with the day after the contract was concluded), the cancellation period ends seven days from the day after the information is supplied.
• Where the contract is performed with the customer’s agreement before the seven day cancellation period and the seller then provides the statutory information during the performance of the contract, the cancellation period ends seven days from the day after the information is supplied.
• If the contract is performed before the seven day period has expired, the cancellation period ends on the day of the performance of the contract.
• Where the seller fails completely to supply the statutory information, the cancellation period ends three months and seven days from the day after the contract is concluded – more on this below.
Regulation 13 – Exceptions to the right to cancel
1. Goods
The customer cannot cancel a contract for goods where those goods are:
• Made to the customer’s specifications or are personalised.
• By their nature cannot be returned or are liable to deteriorate rapidly e.g.
perishable foodstuffs.
• Magazines or audio / video / computer recordings.
2. Services
The purchaser cannot cancel in relation to a contract for services where
performance has already begun by the seller with the customer’s
agreement before the end of the cancellation period, provided the seller
has supplied the statutory information first.
NOTICE TO CUSTOMER WHERE THE CONTRACT IS FOR SERVICES AND THE
CUSTOMER IS TO CONTRACT OUT OF HIS CANCELLATION RIGHTS
[Insert your letterhead here]
Dear Customer
The Consumer Protection (Distance Selling) Regulations 2000
As we have not met face to face, the Consumer Protection (Distance Selling) Regulations
2000 (as amended) apply to the contractual relationship set out in this letter. By signing
and returning this letter, you are agreeing that, to avoid any delay in the transaction, we
may start work on your behalf straight away. By so doing, you do not have a right to
cancellation under the Regulations. We undertake to do the necessary work as soon as
possible, but the requirement under these Regulations for our services to you to be
concluded within 30 days will not apply.
Yours sincerely / faithfully
……………………………
Customer’s name and signature
Regulation 14 – Recovery of sums paid by or on behalf of the consumer on cancellation and return of
security
• On cancellation, the seller must reimburse sums paid by the customer
less the cost of recovering goods where the customer is contractually
bound to return the goods on cancellation and he fails to do so or
returns the goods at the supplier’s expense.
• Repayment by the seller must be within 30 days of cancellation.
• The supplier cannot charge for recovery of the goods where the
customer is entitled to reject the goods by law or contract (e.g. where
the goods are faulty) or where having to return the goods is an unfair
term of the contract (which is unlikely to be the case).
Regulation 15 – Automatic cancellation of a related credit agreement
Where the purchaser cancels, the effect is to cancel any related credit agreement.
Regulation 17 – Restoration of goods by consumer after cancellation
• The customer must look after the goods and return them but only at his own
premises – i.e. he only has to make the goods available for collection by the
seller, unless the contract states otherwise.
• Furthermore, the customer only has to return the goods on receipt of a written
(or another durable means) request from the seller. If the customer does send
the goods back, he shall take reasonable care of them but that is all.
Our Clients
• Unless otherwise agreed, the seller must supply the goods within 30
days of the day after the order is sent.
• If the seller can’t supply the goods, he must tell the customer and give a
refund within 30 days of the day after the period for performance has
expired.
• If the seller fails to perform the contract in time, the contract is treated
as never made.
• Where the seller can’t supply the goods ordered, he can provide
substitutes, as long as the contract allows for this and the seller pays for
the return of the substitutes if the customer cancels.
Performance by the supplier
Our Clients
Within ten days of the date of cancellation, the seller must return any part
exchange goods, failing which the purchaser is entitled to the cash
equivalent.
Regulation 18 – Goods given in part exchange
Our Clients
Contracting out is not permitted by the Regulations.
Regulation 25
Our ClientsThe Director General of Fair Trading or other enforcing authority may apply
for an injunction against a seller in breach, to secure compliance (i.e. there
is no criminal offence associated with breach of the Regulations – it is civil
only).
Regulation 27 – Injunctions to secure compliance with these Regulations
2. Contracts Made in a Consumer’s Home or Place of Work etc
Regulations 2008
Purpose of the Regulations
The purpose of the “Doorstep Selling” Regulations is to give a
customer cancellation rights in respect of the purchase of goods
and services sold during a visit to his home or place of work or
during an excursion by the seller. The idea is to give customers a
cooling off period in circumstances where they may have been
pressurised into buying. The Regulations apply to solicited and
unsolicited visits.
Regulation 2 – Definitions
“Consumer” – someone not acting pursuant to a trade or
profession.
“Trader” – someone acting in a commercial or professional
capacity or through his agent.
“Cancellation period” – seven day period starting with receipt
by the consumer of notice of his right to cancel.
Regulation 6 – Where the Regulations don’t apply
• To consumer credit agreements under which the customer can
cancel through statutory rights or through contractual terms.
Such agreements are regulated by the Consumer Credit Act
1974.
• Excepted contracts. These are listed in Schedule 3 and are
contracts made on the basis of the trader’s catalogue where
there is intended to be continuity of contract between the
trader and the consumer.
• Contracts for less than £35.
Regulation 7 – Cancellation rights
The seller must notify the customer in writing of his cancellation
rights at the time when the contract is made. The notice must be
easily legible and must be headed “notice of the right to cancel”
and must be dated, state that the customer can cancel during the
cancellation period, which is seven calendar days starting with the
day of receipt of the written notice of the right to cancel. The
seller must also supply a separate cancellation form.
The notice must include:
• the date;
• the identity of the trader;
• the trader’s reference number;
• a statement that the customer has the right to cancel the contract if he wishes and
that this right can be exercised by delivering or sending (including by email) a
cancellation notice to the trader at any time within the cancellation period;
• the name and address (including postal address and email) of a person to whom a
cancellation notice may be given;
• a statement that notice of cancellation is deemed to be served as soon as it is
posted or sent to a trader or, in the case of an electronic communication, from the
day it is sent to the trader;
• a statement that the consumer can use the cancellation form provided if he wishes;
• (in relation to specified contracts only) a statement that the customer may have to
pay if performance of the contract begins with the customer’s written consent before
the end of the cancellation period.
The cancellation form must read as follows:
CANCELLATION FORM
(Complete, detach and return this form ONLY IF YOU WISH TO CANCEL THE
CONTRACT)
To:…………………………. [trader to insert name and address of person to
whom notice may be given]
I / We (delete as appropriate) hereby give notice that I / we (delete as
appropriate) wish to cancel my / our (delete as appropriate) contract
……………………. [trader to insert reference number, code or other details
to enable the contract or offer to be identified. He may also insert the
name and address of the consumer.]
Signed
Name and Address
Date
Regulation 8 – Cancellation
Where the customer wants to cancel, he must serve a notice of
cancellation on the seller, using any format. Once the contract is
cancelled, it is as if it was never entered into. The notice of
cancellation is treated as served on the day it is posted / faxed /
emailed.
Regulation 9 – Where performance of the contract is to begin early
Where a customer wants performance of the contract to begin before the end of the
cancellation period, he must request this in writing. A notice from the trader in writing
must state this and state that the customer may be required to pay for goods or
services supplied if performance of the contract has begun with written agreement
before the end of the cancellation period. Where the contract is in writing, the seller’s
notice must be incorporated into the document. If the trader begins work before the
customer has signed, the customer does not have to pay.
But, early performance of the contract and the customer’s obligation to pay for work
done only applies to specified contracts which include:
• The provision of services.
• The supply of newspapers, periodicals or magazines.
• Goods made to the customer’s specification or personalised.
• The supply of perishables i.e. food.
The notice to the customer should read:
NOTICE TO CUSTOMER WHERE PERFORMANCE IS TO BEGIN EARLY IN RELATION TO A
SPECIFIED CONTRACT
[Insert your letterhead here]
Dear Customer
The Cancellation of Contracts Made in a Consumer’s Home or Place of Work
etc Regulations 2008
As this contract is made at your home or place of work, I am required to give you a
formal notice of your right to cancel the contract between us. The form of notice is
attached to this letter.
In accordance with the Regulations, by signing and returning this letter, you are
agreeing that to avoid any delay in the transaction we may start work on your behalf
straight away and we do not have to wait for the cancellation period to expire. You will
be required to pay for our services during the cancellation period even if you
subsequently cancel the contract.
Yours sincerely / faithfully
……………………………
Regulation 10
Once the contract is cancelled, sums paid by the customer (including deposits) are
repayable (and the customer has a lien on any goods he holds until he is repaid).
The cancellation notice cancels any related credit agreement.
Regulation 11
Once the contract is cancelled, the customer must look after the goods and allow the
trader to collect them. He is not under any obligation to send the goods back and is only
obliged to make the goods available for collection. He only has to make them available
for collection if he has received a request in writing from the seller. The customer can
send the goods back but is under no obligation to.
Regulation 13
Regulation 14
If the trader has taken goods from the customer in part exchange, the trader must
return those part exchange goods in good condition on cancellation or provide
equivalent cash.
It is a criminal offence not to give notice of cancellation. The maximum sentence is a
fine in the Magistrates Court.
Regulation 17 – Offences
3. Future Changes
in the Law
The Government has to implement the Consumer Rights Directive
by June 2014.
The Government is at present consulting over changes to the
Distance Selling and the Doorstep Selling Regulations.
Consequently, the proposed changes are not yet clear but are
likely to be minor, including:
• An obligation on the seller to notify the company providing
credit to the customer of any cancellation of the contract.
• Pre-contract information is likely to form part of the contract.
The basic provisions of both sets of Regulations are likely to
remain much as they are.
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