About this series of articles
This article is the tenth in a series about the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, often abbreviated to CC (ICAC). This law came into effect from 13 June 2014.
If your business already compliant with distance selling rules, the changes represent evolution rather than a revolution. However, there are some important changes.
Meeting the information requirements
In this article we use “customer” to include “client”.
If you fail to give the required information, you are in breach of the Regulations. That will entitle a customer to avoid his obligations under the contract. Usually, his obligations are limited to paying you.
There are three important points to cover here, whether you sell goods or services: what information to give; when to give it; and how to give it.
What information to give
The information you must give is set out in Schedules 1, 2 and 3 of the Regulations (and in previous articles in this series linked in below).
Schedule 1 covers on-premises contracts.
Schedule 2 covers distance and off-premises contracts.
Most of the information is what any sensible trader would provide. However, you should check the list and make sure each item is provided somewhere.
Although the requirement to give information is what hits first, a bigger hit against a trader could be the provision that “any information that the trader gives the consumer as required by this regulation is to be treated as included as a term of the contract.”
However, the information you are required to give is so extensive that we cannot imagine much other information that you might want to give, that could be relevant to the contract. The effect is therefore that all information you give, and not only information you are required to give, is regarded as contractual.
This provision will hit service providers hardest, because, in selling any service by word of mouth, conversations take place and information is given. It is easy to exaggerate that information. We advise you to be very careful in making follow-up comments, particularly if the comment is subjective.
For example, if your client wants a UV-resistant glass roof on his conservatory, you should not mention at any time during, or after the installation that “the room should be less hot in the summer and more pleasant to sit in” as a result of the work.
However, because you are also required to provide a full and precise specification of your services, you need to “sell” very carefully beforehand as well.
You may not change the information
What the Regulations say is that you cannot say on your website that eggs come in brown or cream, then contact your customer to say that today cream coloured eggs are off. For most traders, we think this is a nonsense provision. What matters is that the customer buys after making an informed decision.
In order to stay on the right side of the law, we suggest that when it is necessary to change any of the information items listed, including full product or service details, you make sure you tell your prospect of the change in very clear terms and do not merely assume he has picked up the change.
However, this provision does hit traders who rely on a web based T&C document which provides that the buyer’s contract is the version shown on the date of the contract. According to the Regulations, a consumer might have relied on what he saw yesterday and not on the new terms you have posted today. We see no practical way to avoid this problem.
When to give the information
The Regulations require you to give the information before the contract is made.
If you inadvertently allow the contract to be created before your client or customer has received all the information, you are in breach of the Regulations. You must therefore make sure that the contract is made, in law, only after all information has been given.
If you sell goods, that should be no problem. If you sell services, we suggest that you make clear that no contract exists until you confirm to your client that it does exist. That means you must regard what you say not as an offer, but a mere “invitation to treat”. Your client’s response is then an “offer” and your next action is “acceptance”.
How to give the information
In a durable medium
We will start with the “killer” point: “You must convey information in a durable medium that allows information to be addressed personally to the recipient”. We fail to understand how any business using standard contract terms can address its customers personally but it seems that terms and conditions as usually presented are acceptable.
A durable medium is defined as paper or email, or any other medium that:
- allows information to be addressed personally to the recipient; and that
- enables the recipient to store the information in a way accessible for future reference for a period that is long enough for the purposes of the information; and that
- allows the unchanged reproduction of the information stored.
You will see that this definition is subjective and related not to what it is but what its characteristics are. It includes not only email messages, as stated, but any soft copy message which is in a format the recipient can save and open in the same format. This seems to require that you guess what systems and applications your customer will use.
However, we suggest that the Regulations do not require you to find out whether your prospect uses an old word processor programme or works on a 1989 IBM PC. For 99% of businesses, the way you now impart information is likely to be adequate.
More information than required
The Regulations are silent on the question of what happens if the trader has complied with the information requirement but in addition has given other information which turns out to be inaccurate or misguided.
However, because the essence of the Regulations is consumer protection, we suggest that any information you want to give, but which is not required by the regulations should also be true, clear and simple.
Many methods and media
You can provide the information in any way. The Regulations make clear that you are under no obligation to hand out an A4 sheet headed with the word “Information”, nor to show the entire list on every web page of your site. Most businesses will provide most of the items of information already. Many have been required under the Distance Selling Regulations (now superseded by the Consumer Contracts Regulations).
For example, you might give your business information on the contact page of your website, product information on its own specific page, and cancellation and returns information on a separate web page.
Information given verbally should be confirmed later in writing (to protect you as much as to inform your customer).
Action now for compliance
You should identify the occasions and places when you now give information:
- verbally, including by telephone
- through a sales team
- through agents or callers
- when a prospect calls at your premises
- on your web pages
- in a written estimate or quotation
- in your invoice
- in email messages
- by written and posted letters
- by advertising of every sort
Next, you should:
- check that the information you give is not contradictory.
- avoid duplication as far as possible. If you talk about the same subject several times, you are in danger of giving different versions.
- to control information given, we suggest you do not give it in multiple media and methods. The fewer sources, the easier it is to control them.
- work through the list of information items specified in the Regulations and check against information you actually give to make sure you have covered everything.
- what new information you are required to give and enter it into your system. For most businesses, this will be by way of addition to your standard contract, or changes to web pages.
What information to give
All information you give, and not only information you are required to give, is regarded as contractual. This provision will hit service providers hardest, because, in selling any service by word of mouth, conversations take place and information is given.
Don’t make promises. Because you are also required to provide a full and precise specification of your services, you need to “sell” very carefully. If your client wants uv-resistant glass on the roof of his conservatory, we advise you to be very careful to avoid making “follow-up” comments, like “so you will not get so hot in the summer” or “that will definitely keep the room cooler”.
Any information that the trader gives the consumer as required by this regulation is to be treated as included as a term of the contract.
The likely policing policy
Policing the Regulations has been given the local authority trading standards departments. We have no idea how any particular authority will interpret their new and theoretically onerous duties. We do not know what resources they will put into the policing the Regulations, nor how strictly they will apply them. Subject to that, we all know that local authorities are under a great deal of financial pressure. As a result, it seems unlikely that they will take a pro-active role, but rather that they will await complaints, then come down hard on anyone who has failed to comply.
In any civil claim, the obligation to prove his case rests with the claimant. As a result “my word against yours” will never succeed without supporting evidence. It seems likely however that a claim by a consumer based on failure to provide information may well succeed unless the trader can show that he did provide the apparently missing information.
The penalties for non-compliance are not excruciating. The loss of a client’s payment could be small enough for most traders to regard it as inconsequential. We suggest that the greatest loss to a trader will be from the wasted management resources dealing with a complaint, loss of business through word-of-mouth black listing that may follow and the loss of business arising from news coverage and social media.
Summary: dos and don’ts
Do keep excellent records of conversations. We suggest that the very fact that you do keep a record will make it hard for a customer to claim that you have failed to provide appropriate information.
Put all relevant information in specific locations and stick to that policy. For example, all product or service information on a web page; all information relating to you on an “about us” page; all cancellation and returns information either on a web page and in your T&C or in your T&C alone.
If the regulatory information has been given in several places, make sure the last of them -probably T&C or text near to a pay point - refers back to the other sources.
“Cover all” disclaimers have been invalid for many years. However, a carefully worded disclaimer covers far more than consumer rights. We continue to provide disclaimers because they are an essential deterrent against spurious claims. But you should avoid relying on a disclaimer in any case where your consumer customer challenges you on the strength of specific consumer protect law.
Do avoid contradictory statements.
Keep records of changes made in the information provisions. Keep a copy of removed web pages, date removed, and new product specification.
Avoid aggressive, legalistic language when talking about procedures and service provision. For example, use "It may be necessary for us to ..." and not "We reserve the right to ...".
Do keep your terms and conditions document up to date, clear and concise. If anyone wants to argue with you or take you to task on any aspect of the Regulations, your T&C is still likely to be the first place he will look.
Keep your product description accurate and precise. If you use “puff” in a description, make sure it is totally unbelievable. You can say “driving this car will put you on cloud nine”, but do not say your roof insulation will give your client “the cosiest house in the street”.
Do listen to your auto telephone system and identify messages which are no longer appropriate or sufficiently detailed.
Do check all advertising material. Standards have been in place for many years but these regulations raise the bar.
We recommend that you read about obligations for service providers next, or skip ahead to an explanation of why the contract date is so important.
Unless you are exempt from the Regulations or are already compliant, you are likely to need to update your customer contract templates. These are likely to include your T&C on your website if you sell online and your offline customer contract if you sell offline.
If you have any questions about the Consumer Contract Regulations 2013, or would like help updating your contracts to comply, please ask us. We’d be delighted to help.