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Sales to consumers - distance and online sales

Distance and online sales  (EW, S, NI)

The Consumer Protection (Distance Selling) Regulations 2000 (“DSR”) were made in the UK in order to implement EU legislation (Directive 97/7/EC O.J. No. L144, 4.6.97 p.19) on the protection of consumers in relation to distance contracts. The DSR came into force on 31 October 2000 and a technical amendment came into effect on 6 April 2005.

The Regulations apply to contracts for goods or services to be supplied to a consumer where the contract is made exclusively by means of distance communication, that is any means used without the simultaneous physical presence of the consumer and the supplier (DSR regs.3/4). Schedule 1 contains an indicative list of means of distance communication.

Further reading: OFT Guide for businesses on distance selling

Distance communications
The DSR sets out non-exhaustive examples of means of distance communications including printed matter, letter, press advertising with order form, catalogue, telephone with or without human intervention, fax, television, radio and email. (DSR sched.1)

Excepted contracts
The DSR exclude certain types of contract, such as real estate sale, building construction contracts, vending machines, public pay-phone and auction.

Contracts to which only part of the regulations apply include timeshare agreements, food and beverage contracts, transport, catering, provision of accommodation, transport, catering or leisure services, and package travel:

Information required prior to the making of the contract

The DSR state how the information must be supplied

Telephone calls: the identity of the supplier and the commercial purpose of the call shall be made clear at the beginning of the conversation with the consumer.

Right to cancel contracts for the supply of goods
Subject to certain exceptions, the consumer may cancel the contract by giving a notice of cancellation to the supplier within the cancellation period. The cancellation period starts on the day on which the contract was made and ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the goods. “Working days” means all days other than Saturdays, Sundays and public holidays.

However if the supplier has not complied with the requirements to give the additional information but then does so in writing or in another durable medium etc. within three months beginning with the day after the day on which the consumer receives the goods, the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information.

If the supplier does not give the required information at all, the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the consumer receives the goods.

Right to cancel contracts for the supply of services
Subject to certain exceptions, the consumer may cancel the contract by giving a notice of cancellation to the supplier within the cancellation period. The cancellation period starts on the day on which the contract was made and ends on the expiry of the period of seven working days beginning with the day after the day on which the contract was made. “Working days” means all days other than Saturdays, Sundays and public holidays.

However if the supplier has not complied with the requirements to give the additional information, but then does so in writing or in another durable medium available etc. within the period of three months beginning with the day after the day on which the contract is concluded, the cancellation period ends on the expiry of the period of seven working days beginning with the day after the day on which the consumer receives the information.

If the supplier does not give the required information at all, the cancellation period ends on the expiry of the period of three months and seven working days beginning with the day after the day on which the contract was made.

The DSR specify how the cancellation notice must be given
Exceptions to the right to cancel: there are certain exceptions where the consumer has no right to cancel the contract, e.g.:
*  contracts for the supply of services: if the supplier notified the consumer when the contract was made in writing or in another durable medium etc. that the consumer would not be able to cancel the contract if performance of the contract has begun with the consumer’s agreement before the end of the cancellation period, and performance has actually begun
*  contracts for the supply of goods or services the price of which is dependent on fluctuations in the financial market which cannot be controlled by the supplier;
*  contracts for the supply of goods made to the consumer’s specifications or clearly personalised or which by reason of their nature cannot be returned or are liable to deteriorate or expire rapidly
*  contracts for the supply of audio or video recordings, software if unsealed by the consumer; supply of newspapers and periodicals, gaming, betting or lottery services.

Permitted charges by the supplier:  if the contract provided that the consumer must return any goods supplied if he cancels the contract but the consumer does not comply or returns the goods at the expense of the supplier, the supplier may make a charge not exceeding the direct costs of recovering any goods supplied under the contract.

Performance
Unless the parties agree otherwise, the supplier must perform the contract within a maximum of 30 days beginning with the day after the day the consumer sent his order to the supplier.

Subject to certain exceptions, if the supplier is unable to perform the contract because the goods or services ordered are not available, within the period for performance (i.e. 30 days or such other period as the parties agree), the supplier must::
*  inform the consumer; and.
*  reimburse any sum paid by or on behalf of the consumer in relation to the contract to the person by whom it was made. This includes any sum paid on behalf of the consumer includes any sum paid by a creditor who is not the same person as the supplier under a personal credit agreement with the consumer.

The supplier must make any reimbursement as soon as possible and in any event within a period of 30 days beginning with the day after the day on which the period for performance expired.

No contracting-out
A supplier may not avoid the effect of the DSR by any term of the contract. This includes an attempt to circumvent the DSR by e.g. directly or indirectly imposing an additional duty or liability on the consumer.

It is also not possible to avoid the DSR by making the contract subject to the law of a non-member state of the [EEA].

Enforcement

Civil enforcement:
* Court action: the rules of the DSR may be enforced by the courts in the case of a civil action arising out the contract.
* Complaint: a consumer may make a complaint against a supplier of non-compliance with the DSR to the Office of Fair Trading or local trading standards department

Criminal enforcement: there are no criminal  sanctions except in the case of inertia selling (see below).

Inertia selling to consumers (EW, NI, S)
The Consumer Protection (Distance Selling) Regulations 2000 (“DSR”) in addition to introducing distance selling regulations also brought in a new set of regulations in respect of inertia selling to consumers and modified the existing UK laws on inertia selling so that they applied to sales for trade or business purposes (Unsolicited Goods and Services Act 1971 (as amended)).

The inertia selling regulations define “unsolicited” to mean, in relation to goods sent or services supplied to any person, that they are sent or supplied without any prior request made by or on behalf of the recipient.

Rights to unsolicited goods
Rights of the recipient: the recipient may, as between himself and the sender, use, deal with or dispose of the goods as if they were an unconditional gift to him.

Rights of the sender: the rights of the sender to the goods are extinguished.

Demand for payment for unsolicited goods or services

Demand for payment: it is a criminal offence for a person to demand payment in the course of a business for goods or services supplied for non-business purposes which he knows are unsolicited without having reasonable cause to believe there is a right to payment.

What is a “demand”?: an invoice or similar document which states the amount of a payment is treated as a demand.

Threats of proceedings etc.: it is a criminal offence for a person to threaten legal proceedings or to place or threaten to place the name of any person demand on a list of defaulters or debtors with a view to obtaining payment for unsolicited goods or services.

Enforcement:
Civil law: In relation to goods, the DSR make clear that the recipient may treat the goods as his own and has no obligation to keep or return them to the sender. In relation to both goods and services, by definition the recipient will have no obligation to pay for the goods.

Criminal law: as noted above, the making of a demand for payment for unsolicited goods and making a threat of proceedings or placing the recipient on a defaulter list are criminal offences punishable on the <[standard scale]> 4 and 5 respectively.

More information>
The basics: contract for sale
Legal tender
Limitation and exclusion clauses
Sale of goods
Supply of services
Inertia selling to businesses
E-commerce
Sales to consumers
Unfair terms
Sales to consumers, distance selling
Doorstep selling
Marketing and advertising regulation    introduction
Advertising Codes
Advertising to businesses and    comparative advertising
Advertising to consumer regulations
Approved trader schemes
Direct marketing by telephone, email,    text message, fax and post
Data protection in relation to marketing