The Consumer Protection (Distance Selling) Regulations 2000 (the "Regulations") came into force in the UK on 31st October 2000. This article explains a consumer’s cancellation rights.
Note, we provide six articles on distance selling. The others are:
Explains how to comply with the Distance Selling Regulations
The Regulations apply to all distance contracts. A ‘distance contract’ is one:
For the sale of goods or the provision of services;
Concluded between a supplier and a consumer (note that business to business distance selling is not caught by the Regulations);
Under an organised distance sales or service provision scheme run by the supplier (this covers, for example, sales made through a call centre or from a web site; however one-off contracts concluded by email are not relevant);
Where the supplier communicates with the consumer without ever coming face to face with the consumer up to and including the moment at which the contract is concluded (i.e. by 'distance communication').
So if you sell by leaflet dropping in letter boxes; press advertising with order forms; in catalogues; by telephone with or without human intervention; by email; by fax; and by television, the regulations apply to you and you must comply.
Right to cancel
Under Regulation 10, a consumer can cancel a distance contract at any time during the "cancellation period" by notifying this intention to the supplier in writing. A contract which is cancelled must be treated as if it had never been entered into by the consumer. For example, if the consumer has entered into a credit agreement in order to purchase the goods, that agreement must also be cancelled at the same time as the distance contract.
In both contracts for the sale of goods and contracts for the supply of services the cancellation period referred to above begins with the day on which the contract is concluded. However, the duration of the cancellation period varies depending on the stage at which the written confirmation and additional information is provided.
What does ‘give notice of cancellation’ mean?
A notice of cancellation will be properly given if the consumer gives notice in one of the following ways:
By leaving a notice addressed to you at your last address known to the consumer, in which case notice is said to have been given on the day on which it was left at your address;
By posting the notice to you at the address last known to the consumer, in which case notice is said to have been given on the day it was posted; or
By faxing or emailing the notice to you on the last fax number or email address known to the consumer, in which case notice is said to have been given on the day it was sent.
It is a good idea to ask your consumers to keep some evidence of having given you the cancellation notice, such as a certificate of posting or confirmation of fax transmission, but you cannot insist on this.
Cancellation periods for goods
Where written confirmation and additional information is provided before or at the time of delivery of the goods, the cancellation period is seven working days beginning with the day after the day on which the goods are delivered;
Where the written confirmation and additional information is provided after the goods are delivered but within a period of three months beginning with the day after the day on which the goods are delivered, the cancellation period will end after seven working days beginning with the day after the day on which the written confirmation and additional information is provided.
Example: The written confirmation and additional information is provided to a new customer three weeks after he placed an order. The cancellation period will be seven working days from the day after the date the written confirmation was provided.
Where the obligation to give written confirmation and additional information is not fulfilled within three months beginning with the day after the day on which the goods are delivered, the cancellation period ends after three months and seven working days from the day after the day on which the goods are delivered.
Cancellation period for services:
Where the written confirmation and additional information is provided on or before conclusion of the contract for services, the cancellation period is seven working days beginning with the day after the day on which the contract for services is concluded;
Where the written confirmation and additional information is provided after the contract for services is concluded but within a period of three months beginning with the day after the day on which the contract is concluded , the cancellation period will end after seven working days beginning with the day after the day on which the written confirmation and additional information is provided;
Where the supplier has the consumer's consent to begin performance of the services before the usual seven working day cancellation period expires and the written confirmation and additional information is provided before performance of the services begins, the cancellation period ends when the performance of the services begins;
Where the supplier has the consumer's consent to begin performance of the services before the usual seven working day cancellation period expires but the written confirmation and additional information is not provided on or before the day on which performance of the services begins but is provided in good time during the performance of the contract, the cancellation period will end after seven working days beginning with the day after the day on which the written confirmation and additional information is provided (provided the right of cancellation is still useful) or when performance is completed (whichever is sooner);
Where the obligation to give written confirmation and additional information is not fulfilled within three months beginning with the day after the day on which the contract for services is concluded, the cancellation period is the period of three months and seven working days from the day after the day on which the contract is concluded, regardless of whether performance of the services has begun or has been completed.
Of course you may offer longer cancellation periods, provided they do not mislead consumers about the rights they have under these Regulations or other legislation such as the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982.
How do the cancellation provisions apply to linked contracts for goods and services, for example a mobile phone and an associated airtime contract, or a modem and broadband service?
In these cases, there are normally two contracts– one for goods (the mobile phone or modem, for example) and the other for a service (such as the airtime or internet connection).
In both cases the cancellation period starts when the contract is made. The time limits for cancellation of the goods and service contracts are as usual (set out above). It is therefore possible to have cancellation periods running at different times and for the service contract to remain cancellable after the goods have been provided.
With service contracts, if you fail to give consumers the required written information before you start the service, or fail to obtain their consent to starting the service early, they will have a right to cancel their contract even though they may have started using the service.
Where a service contract is cancelled the Regulations require you to refund all the money paid in relation to the contract. So if a consumer cancels an airtime or internet contract before the cancellation period has expired, you must refund all charges (including, for example, call charges) incurred under the contract.
Can a consumer cancel an order before they receive the goods or where goods are lost in transit?
Yes. Where the Regulations give consumers rights to cancel, this right is unconditional. If consumers cancel before they have received the goods you must refund the total price of the goods, including any delivery charges. Consumers who have cancelled may refuse to accept delivery of the goods. Refusal in such a situation cannot be treated as a breach of contract.
Where goods are lost in transit from you to the consumer you will need to either send new goods or offer the consumer a full refund, including delivery charges. See paragraph 3.20 for more information.
I sell items that may raise health and safety concerns if returned unsealed. How are such products treated under the Regulations?
The first question to consider is whether such items fall under the exceptions, for example goods that by reason of their nature cannot be returned. The Regulations do not define this category any further. However, this is most likely to apply only where returning the goods is a physical impossibility or where they cannot be restored in the same physical state as they were supplied. This exception may apply, for example, to items such as latex or nylon clothing which could become distorted once worn.
We are conscious of concerns about reselling items which may raise concerns about hygiene. However, the Regulations do not link cancellation rights with a supplier’s ability to resell items as new.
With items that fall outside the exceptions, cancellation rights will apply, but the consumer has a duty to take reasonable care of the goods throughout the cancellation period.
What constitutes reasonable care depends on a number of things. It may be reasonable for the supplier to stipulate what they consider to be reasonable care, such as not removing hygiene seals on garments or only trying out shoes indoors. However, these stipulations cannot restrict a consumer’s reasonable opportunity to inspect and assess the product. Consumers have the right to cancel even if they fail to take reasonable care of the goods. Further, the Regulations do give you a right of action against consumers for breach of the statutory duty to take reasonable care.
Exceptions to the right to cancel
Unless the parties have agreed otherwise, the consumer will not have the right to cancel in respect of certain distance contracts. This applies to the following contracts:
For the provision of services, if the performance of the contract has begun with the consumer's consent before the end of the usual cancellation period and the supplier has provided the written confirmation and additional information before commencing performance of the services (including information that the cancellation rights will end as soon as performance of the contract begins);
Note that the draft DTI guidance states that preparatory work to providing a service (such as setting up an account) cannot be equated to the carrying out of a service. This may impact on the right of businesses to say that the provision of a service has begun and therefore cannot be cancelled;
For the supply of goods or services which are priced according to fluctuations in the financial market and cannot be controlled by the supplier;
for the supply of goods which by means of their nature cannot be returned (e.g. personalised goods) or are likely to deteriorate or expire rapidly (e.g. dairy products);
For the supply of audio or video recordings or computer software which were unsealed by the consumer;
For the supply of newspapers, periodicals or magazines; or
For gaming and lottery services.
How do I make sure consumers do not cancel a service contract after I have started work?
Once you have started work or begun to provide a service the consumer is contractually bound to honour his part of the contract so long as you:
Had their agreement to start the service;
Provided them with the required written information in advance of your starting; and
Told them that their cancellation rights will end as soon as you do start carrying out the contract.
If by chance you find some error of law or fact in any Net Lawman information page, do please tell us. We should also welcome your suggestions for new subjects for information pages. These notes:
Do not provide a complete or authoritative statement of the law;
Do not constitute legal advice by Net Lawman;
Do not create a contractual relationship;
Do not form part of any other advice, whether paid or free.
