HM Insights

A Major Change in Consumer Law due on 13 June

13 June 2014 sees a major change in consumer law come into effect. This is the date upon which Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013 enter into force.

The Regulations implement some crucial changes to the law relating to dealing with consumers, applicable to all businesses and particularly those dealing via the internet, mobile devices and other distance based means.

Businesses are strongly advised to revisit both their consumer contracts and their consumer engagement processes to ensure that they are compliant with the requirements of the Regulations, as the Regulations apply to all contracts made after 13 June 2014.

Key changes implemented by the Regulations include:

  • An express prior consent requirement for additional, meaning pre-ticked boxes will not suffice.
  • Wording requirements for online payment buttons and such like.
  • Requirements relating to information given in the context of sales orientated telephone calls.
  • Unless agreed otherwise, a requirement to deliver goods purchased within 30 calendar days.
  • Charging limitations as regards helplines.
  • Pre-contract information requirements for on-premises contracts.
  • New rules relating to cancellation of contracts for digital content.
  • Requirements relating to the use of model cancellation forms.
  • Extensions to cooling off periods for distance contracts, from 7 to 14 days where the correct information has been provided at the right time, and to 12 months where it has not.
  • Changes to return requirements on cancellation, and consequent refund obligations.

The Regulations replace existing legislative controls on distance and doorstep selling. They are therefore a crucial piece of legislation.

Business should also be aware that the underlying legislation which gave rise to the regulations is EU level (the Consumer Rights Directive (2011/83/EU)) and that it is a "maximum harmonisation measure", which means that member states cannot introduce rules which are more, or less, stringent. As such business should expect their dealings with consumers in other member states to be similarly regulated.

The Regulations can also apply to dual purpose contracts, that is where the contract relates to a supplies for business and non-business purposes.

Business can also be liable where acting through agents and subcontractors. As such it is important to be cognisant of their effect, for example in the context of franchising structures.

There are exemptions relating to certain areas, such as financial services, gambling, contracts relating to immoveable property, construction and accommodation, package travel and timeshares, telecommunications, wifi, vending machines and payphones, healthcare, transport, personalised goods and goods liable to rapidly deteriorate, "day to day" contracts, newspapers and magazines, auctions, and urgent maintenance. If any of these areas are relevant it is important to understand these exemptions, particularly as in some respects they may not be complete from the requirements of the Regulations.

The Regulations of course must be read in conjunction with other recent legislation implementing the provisions of the Directive, including the Consumer Rights (Payment Surcharges) Regulations 2012, a piece of legislation which banned the levying of excessive payment surcharges, for example charges for using debit or credit cards. In respect of this additional legislation particularly, one must also note that 12 June 2014 is the date upon which the micro and new business exemptions expire.