New laws regulating consumer purchases, particularly those made online, will come into play on 13 June 2014. The European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 (the “Regulations”) consolidate the current laws governing off-premises and distance purchases by consumers. The Regulations set out the information that a trader must provide to a consumer before they are bound by the contract. Consumers are now given an extended period of 14 days in which to cancel off-premises and distance contracts and they must also be provided with instructions by the trader on how they can cancel. The Regulations also restrict payment and phone charges that a trader can impose on a consumer.
1.Information provided by traders
For contracts concluded both on- and off-premises, the trader must inform the consumer of specific details, including the price, after sales services and guarantees, the trader’s complaints policy, any additional charges and the cost and duration of delivery. Where the contract is concluded other than on-premises, additional information such as the right to cancel and the related conditions, time limits and procedures for exercising that right will be required. The trader shall also provide a model cancellation form and a copy or confirmation of the concluded contract to the consumer.
2.Explicit obligation to pay
Online traders will be specifically required to ensure that consumers clearly acknowledge that their order involves an obligation to pay. This means that where the sale entails clicking a button or a similar action, it should be clearly and obviously labelled to indicate this commitment.
3.Extension of cancellation period
One of the important changes introduced is the extension of the cancellation or “cooling off” period from 7 working days to 14 calendar days. Consumers can cancel the contract without reason at any time during this period. However, the consumer is required to pay for the return of the goods unless the trader has either accepted the cost or has failed to inform the consumer of their obligation to pay for the return. Consumers must return the goods within 14 days of notifying the trader of their decision to cancel although the length of the cancellation period may be extended for up to 12 months if the trader has not informed the consumer of their right to cancel. It is worth noting, however, that a variety of contracts for the sale of goods and services are exempt from this right of cancellation.
4.Restriction on charges
Traders are now restricted in the amount they can charge consumers for using a particular means of payment, such as credit cards. The Regulations limit these fees to what it costs the trader to process the transaction. Similarly, traders operating a telephone line to allow customers get in contact about their purchase cannot charge more than the cost for calls to an Irish mobile or landline. The Regulations also aim to eliminate hidden charges and costs on the internet by requiring consumers’ express consent for any additional payment to the primary cost for the good or service. This means that traders can no longer rely on default ticked boxes for additional costs and charges.
Where the Regulations do not apply
It is important to note that the Regulations will not apply to certain contracts, such as contracts for:
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healthcare;
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gambling;
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financial services;
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package holidays/travel; and
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the supply of foodstuffs, beverages or other goods intended for current consumption that are supplied by the trader to the consumers home, residence or workplace.
The Regulations should be read in detail for a comprehensive list of contracts that are not covered.
What this means for us?
The new Regulations aim to increase consumer confidence and to facilitate cross-border shopping, especially over the internet. They are likely to have a considerable impact on both traders and consumers. In particular, the elimination of excessive payment fees and the extension of the cancellation period are likely to have a material impact on businesses that trade online.
Traders should be aware that similar laws are being introduced in all EU Member States. Traders operating via distance communications, particularly those providing online sales, should examine their order, sale and cancellation process to ensure compliance with the rules. It is important to also be aware that the breach of many of these rules carries the risk of criminal enforcement, including fines and jail time.
For more information, contact a member of our Technology team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
