Distance selling 02: an update since changes in April 2005 |
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| There are a number of acts and regulations on distance selling. Examples are: The Distance Selling Regulations 2000, Electronic Commerce regulations 2002, The Trade Descriptions Act and the Sale of Goods Act 1979. In this article, the changes made to the Distance Selling regulations 2000 are discussed. |
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| This guide is for anyone who will be selling goods, and or services via distance selling. Changes to the Distance Selling Regulations which were discussed by the government in 2004 came into effect on 6th April 2005. These will be discussed specifically in this article. If you require basic information first, try reading our distance selling article 01 |
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| Key facts: |
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- The regulations apply to both goods and services where a contract is made without ‘fact to face’ contact between supplier and consumer;
- Certain goods are exempt from the regulations (see below on clear information);
- The Office of fair trading is the enforcing agency for the United Kingdom.
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| The law states: |
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- Previously, consumers had to be provided with clear information about the goods and services before they bought them. Now, you can provide the information after the service has started. However, the consumer has the right to cancel an agreement for up to seven days after the information has been received;
- It remains law that suppliers must give consumers certain information, including details of cancellation rights, before the order is made. This may be provided over the phone.
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| You don't need to provide this information when you're selling: |
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- Accommodation, transport, catering or leisure services;
- Timeshare arrangements;
- Food, drinks or other goods delivered regularly to the consumer's home or workplace by a "regular rounds" such as a milkman or domestic oil supplier.
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| The information you must provide for all other goods is extensive. It includes: |
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- Supplier’s name and, where payment is required in advance, the supplier's address;
- A description of the main characteristics of the goods or services;
- The price - including all taxes;
- Delivery costs, where applicable;
- Arrangements for payment, delivery and performance;
- The right to cancel within a certain time period;
- The length of time the offer or price remains valid.
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| Goods must be delivered within thirty days unless otherwise stated. |
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| Basic company information must be provided to the consumer |
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| If you are selling to the ultimate consumer, you must provide them with basic information, such as your company’s name, mailing address, telephone number and an email address if you have one. The information must be clear and accessible. |
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| Consumers have a seven day ‘cooling off period |
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| For any reason, a consumer can cancel up to seven days after the contract has been made, with no effect. The ‘cooling off period’ allows the goods to be inspected, as they would have been before purchase in a shop. |
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| This means: |
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- You will be able to give information on cancellation rights in good time before the service finishes;
- If you provide cancellation information after the service has started or the goods have been delivered, the right to cancel will end seven working days after the
- information is received;
- If you have provided the information as required, consumers will not be able to cancel after a service has been completed;
- If a service is cancelled after it has started, the customer may have to pay the costs up to that point.
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| There are some exceptions to the right to cancel. Customers can't cancel if the contract is for: |
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- Accommodation, transport, catering or leisure services;
- Package travel and timeshare arrangements;
- Food drinks or other goods delivered regularly to the consumer's home or workplace such as a milkman;
- Goods made to the customer's specification;
- Goods that are perishable or can't be returned, such as frozen food and fresh flowers;
- Audio or video recordings or computer software that the customer has opened;
- Newspapers or magazines;
- Betting, gaming and lotteries;
- Premium-rate telephone and website services;
- Services that begin, by agreement, before the end of the cooling-off period.
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| You must send an order confirmation |
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| Once a consumer places an order at a distance, you must provide them with confirmation by post, fax or email of the "prior information" you gave them. |
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| However, you don't need to provide confirmation if the relevant information has been made clear to the customer in a brochure or advertisement. |
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| As well as giving them the information you must also state: |
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- How and when the customer can cancel the order (this can be given at any time, provided you do so in good time, from when an order is placed to before the service comes to an end;
- Your postal address;
- Any guarantees or after-sales services that apply.
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| You don't need to provide an order confirmation if you're selling: |
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- Accommodation, transport, catering or leisure services;
- Timeshare arrangements;
- Food, drinks or other goods delivered regularly to the consumer's home or workplace by a "regular rounds man" such as a milkman or domestic oil supplier.
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| Returning the goods |
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| If the contract is cancelled, the customer must ‘restore’ the goods to the supplier. This does not mean returning them, but instead, making them available for collection by the supplier. However, if there was a clause in the contract that required the customer to return the goods at their cost should the contract be cancelled, the customer will have to return the goods at their cost. If this is the case, and the goods are not returned, the supplier may collect the goods and charge the customer the direct costs of collection. |
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| Where the consumer cancels the contract, the vendor must refund all monies paid within thirty days. |
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| Faulty goods |
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| The consumer is protected under the regulations within the cooling off period. Once the period has expired, the Sale of Goods Act 1979 then protects the consumer. Under the Sale of Goods Act 1979, the goods must "conform to contract". This means they must be as described, fit for purpose and of satisfactory quality (i.e. not inherently faulty at the time of sale). |
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| Goods are of satisfactory quality if they reach the standard that a reasonable person would regard as satisfactory, taking into account the price and any description. |
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| Aspects of quality include fitness for purpose, freedom from minor defects, appearance and finish, durability and safety. |
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| If the goods are faulty, the consumer can ask either for a refund, or for the goods to be repaired or replaced at no cost to them, or for compensation. |
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| Other information to consider |
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| Holding personal information |
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| Any personal information you collect or is collected from you must be relevant and collected for a purpose. |
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| Furthermore, it must not be held for longer than absolutely necessary in order to carry out the analysis, nor |
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| May it be passed onto another country where it will not be used correctly? |
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| Any data collected must comply with the Data Protection Act, the Freedom of Information Act, the privacy and Electronic communications regulations. For more information, please read our article on Distance regulations 01. |
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| Spam |
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| The new regulations have tightened rules about sending people spam. You must ask clearly, whether the customer wants the information you are sending and there must be an opportunity for them to opt out of your free information. The rules are in the form of “Electronic Communications Regulations 2003” |
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| Safe online shopping |
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| People are still concerned, albeit less so, about credit card fraud over the Internet and general consuming on-line. Rightly so – there are many things, you should be aware about when distance buying and these include safe payment, data protection, illegal and disturbing content of some sites and how to put right something you don’t feel happy about. All these issues are covered in detail in a leaflet on the DTI website. http://www.dti.gov.uk/ccp/topics1/ecomm.htm |
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| Still confused? |
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| The DTI have a comprehensive list of all the regulations. |
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