About this series of articles
This article is the eighth 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 and unfortunately, like most European law, it is anything but clear and practical. We hope that this information makes understanding the implications for your business easier.
The main changes are regarding the information you must give to your “consumer” customer before he buys, and his rights to cancel once he has bought. The changes affect traders who sell off-premises or at distance most, but traders who sell on-premises – in their shops, offices or showrooms – also have to comply to a lesser extent.
This article covers the subject of what information you need to provide to your customers.
The Regulations require that you give certain information to consumers who buy goods, services or digital content online or from you away from your business premises, both at home and within the EU. There are exemptions from all of the Regulations as well as additional exemptions from the cancellation provisions.
You must present the information clearly
One of the pillars of Regulations is the requirement for a trader to give a consumer specific information in a way that is clear, comprehensible and legible, before he enters into a contract with you. This information must be given on paper or, if the consumer agrees, on another durable medium.
The information that you are required to give
The following text is a précis of the items listed in Schedule 2 of the Regulations. This information is required for contracts made either off-premises or at distance, although much of it also applies to contracts made on-premises.
The information you need to give is:
- the main characteristics of the goods or services;
- the identity of the trader
The Regulations specify “such as the trader’s trading name”. We suggest this is an error. The Business Names Act 1985 requires that the trader should give his true name (company or partnership name), as well as any trade name if different.
- “the geographical address at which the trader is established and, where available, the trader’s telephone number, fax number and e-mail address, to enable the consumer to contact the trader quickly and communicate efficiently.
We suggest that the important point is ease of communication. You certainly do not have to offer all of these. You might observe that few large businesses in the United Kingdom presently comply. You will certainly fail to comply if you keep your customers waiting for more than a few minutes on a call system. Sadly, there are no similar obligations on governmental departments or quangos!
- Where the trader is acting on behalf of another trader, the geographical address and identity of that other trader. That address must be the address to which a customer can send a complaint letter.
This may require a change of business model for operators of marketplace websites that connect buyers and sellers. If you presently leave it to your sellers to provide information, and they fail, both you and they are directly in breach of the Regulations.
- the total price of the goods or services inclusive of taxes
If that cannot be calculated up front, you must disclose exactly how the price will be calculated.
- all additional charges, including delivery
If they cannot be calculated in advance, then you must inform that they may be charged and tell how they will be calculated.
- in the case of a contract of indeterminate duration or a contract containing a subscription, the total costs per billing period or (where such contracts are charged at a fixed rate) the total monthly costs.
- the cost of phone calls by customer to you, if not charged at basic rate
- the arrangements for payment, delivery, performance, and the time by which the trader undertakes to deliver the goods or to perform the services.
- where applicable, the trader’s complaint handling policy
There is no explanation of exactly what “applicable” means.
- full details of the cancellation procedure where it exists
This alone is a large and essential requirement covered at length in the Regulations. You can buy the necessary documents to incorporate in your terms and conditions.
- where applicable, that the consumer will have to pay for the return of large or bulky goods which cannot be sent by post.
- that, if the consumer opts out of his right to cancel, then does cancel, he will have to pay the trader’s reasonable costs in accordance with regulation 36(4).
- if your customer has no right to cancel, either because the product you sell or service you provide is excluded or because you want the customer to opt out, you have to tell the customer why he has no right to opt out and explain why he has lost that right or could lose it. There seems to be some overlap with the provision of full details of the cancellation procedure.
- in the case of a sales contract, you must remind your customer reminder that the trader is under a legal duty to supply goods that are in conformity with the contract.
This has been basic law for many years, updated by the Sale of Goods Act 1979, but the difference now is that you must point out your obligation to your customer.
- the existence and the conditions of after-sale customer assistance, after-sales services and commercial guarantees, as appropriate.
Most businesses would inform about these matters as a marketing initiative. We guess the difference now is that you must spell out carefully the terms of any paid service or guarantee. This provision is assumed to have been drawn to hit the hard sell of guarantees and insurance as an additional item, by phone or at the pay point.
- if you mention that you will comply with any code of conduct (by any name), you must state where the code can be obtained or downloaded.
- if your contract is repeated, renewable or in any way continuous, how it can be terminated.
This means you must explain the procedure. It is not suggesting that your contract should be repeated.
- the minimum duration of any obligation of the consumer.
- if you want or might later want a deposit or guarantee, you must provide full information before the contract is made.
- where applicable, the functionality, including applicable technical protection measures, of digital content.
We suggest this means you have to provide your full technical specification in simple language. This seems to us to be an impossible task. The last part seems to mean that you must warn if your product might change or damage your customers data in any way.
More seriously, remember that this and other items in this list which refer to digital content apply not only to downloaded software and games but also to boxed or otherwise sealed products. So you will not be able to blame your supplier from the other side of the world if the instructions and explanation are not clear.
- if you sell a digital product, any relevant compatibility of digital content with hardware and software that the trader is aware of or can reasonably be expected to have been aware of.
This item is qualified so you are not quite expected to be a technology expert. Nevertheless, this is an area which has previously ignored and will now be watched.
Compatibility has been a serious issue for many years. We think that the teams at weights and measures will come down hard on a trader who fails to explain both compatibility and non-compatibility.
- if you have signed up to any out-of-court complaint and redress mechanism, tell your customer all about it.
Low value exemption
For an off-premises seller there is a very simple exemption for a sale of goods or services with a value lower than £42. That means:
- you are not bound to provide the information set out above, and
- your customer has no cancellation right.
Changing the contract
If you need to change any of the information you have given, you must agree the change with your customer. If you don’t, the consumer is not bound by the change. This was always the case, but it is now more important than ever because the contract may include information you have provided before the contract was made.
Record what information has been given
If a customer challenges you as to whether the correct information has been given or whether the correct procedures have been followed, the penalty if either has not will not simply be a refund, but more than likely, the local weights and measures team making your life a misery and putting you on some unknown database as an offender.
As far as we are aware, each local authority is responsible for arranging the enforcement of the Regulations in its own way and for training its own staff. Policies on enforcement will differ widely and a local authority is under no obligation to specify its priorities.
The best way to avoid any claim, any adverse publicity and any financial penalty, is to keep accurate records of the information you provide each customer. So we recommend:
- Provide all customers with a full set of information, even if that involves giving some that is not strictly relevant to a particular individual consumer.
- Remember that all information you have provided is deemed to be what amounts to a contract term. So beware of generalisations, exaggerated promises, and out of date information. Make sure your marketing team knows that too!
- Avoid changing the information so that you do not need a complicated filing system or database just to keep track of what you have given to each customer.
- So far as possible, provide the information on your website and of course before the contract comes into being.
We recommend that you read about the requirements for on-premises contracts next, or skip ahead to how to tell your customer the required information.
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 website's T&C 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.