If your business sells goods or services to customers at a distance - for example online, by mail order or over the phone - you need to comply with specific legislation protecting the buyer's rights
When selling to individual consumers (rather than other businesses) at a distance, you must comply with the Consumer Contracts Regulations. In addition, if you sell using electronic means - for example, by email or through your website - you must also comply with the E-Commerce Regulations, regardless of whether your customers are individuals or businesses.
Any business selling goods or services, including digital content, to customers from home must also comply with the Consumer Rights Act.
The Consumer Contracts Regulations 2013
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations apply to sales of goods or services to consumers without face-to-face contact. This includes selling by mail order, online, using digital television or by telephone or text message. The Regulations replaced the former Distance Selling Regulations.
Under the Regulations, you must:
- give customers specified information before a sale is made
- confirm prior and certain other information in a durable form (eg in writing or via email)
- usually, give customers a right to cancel their order
- normally, fulfil your contractual obligations within 30 days unless otherwise agreed
- usually, give customers a full refund up to 14 days after receiving their goods, if they change their mind
Before you make a distance sale
You must supply the following prior or pre-contract information:
- your business name and, if you require payment in advance, your postal address
- a description of the goods or services and, if you are supplying them on a continuing basis, the minimum term
- the price (including taxes) and how long the price and any special offer will remain valid
- details of any delivery costs
- how payment can be made
- the arrangements for delivery (or performance of the service)
- information about cancellation rights
- whether you will supply a substitute if the goods or services are not available (and, if so, confirmation that you will meet the cost of returning unwanted substitutes)
- if the sale is of digital content, additional information about, for example, its functionality and compatibility
You do not have to provide this information for sales of:
- accommodation, transport, catering or leisure services to be provided on a specific date or within a specified period
- everyday food and drink delivered by a regular roundsperson (such as a milkman)
- package travel or timeshare sales (covered by separate regulations)
- premium rate telephone services (covered by separate regulations)
Providing durable confirmation
The following information also needs to be provided in writing ('durable' confirmation):
- the prior information (see above)
- how the customer can exercise their cancellation rights, including whether the contract requires them to return unwanted goods if they cancel, and who will pay the costs of returning those goods
- any guarantees or after-sales service you provide
- your geographical address for the customer to contact you with any complaints
- for contracts lasting more than one year (or indefinitely), under what conditions the contract can be cancelled
The confirmation information must be provided in good time - at the latest, when the goods are delivered or the service performed. Information can be provided by letter, fax or email, or in the original mail order advertisement or catalogue.
Cancellation rights and 'cooling off' period
Customers have the right to cancel a purchase within 14 calendar days of receiving goods or the durable confirmation (see above), whichever is later. This 'cooling off' period extends to a maximum of 12 months and 14 days if the customer is not given written ('durable') confirmation of the required information, and written confirmation of their right to cancel.
You must make a model cancellation form available for distance and door-step sales.
These cancellation rights do not apply to:
- accommodation, transport, catering or leisure services to be provided on a specific date or within a specified period
- everyday food and drink delivered by a regular roundsperson (such as a milkman)
- package travel or timeshare sales
- premium rate telephone services
- goods made to a customer's specification (but not standard upgrades or variations)
- perishable goods
- goods that cannot be returned
- recordings and software that have been unsealed
- newspapers and magazines
- betting and similar services
- goods and services whose price depends on fluctuations in the financial markets
- digital downloads, once the download process has started - but this must be made clear to the consumer, and the consumer must explicitly agree to this
Similar rules apply for services.
The Regulations do not require customers who cancel to return your goods, but they must take reasonable care of them and make them available for you to collect. You must refund the customer as soon as possible, but in any case within 14 calendar days of receipt of cancelled goods.
The exception is if your contract requires the customer to return your goods if they cancel. In that case, if they do not return them, they must pay your costs incurred in collecting them.
Exemptions to the Consumer Contracts Regulations
There are some exemptions. The Regulations do not apply to:
- one-off distance sales made in response to a customer request (but not if you organise your business to regularly deal with such requests)
- sales of financial services (these are covered by separate regulations, including the Financial Services Distance Marketing Regulations)
- sales of land or buildings, including lease agreements for three years or more
- sales using vending machines or automated commercial premises, and public payphones
- sales at auction (including online auctions)
The E-Commerce Regulations 2002
The E-Commerce Regulations apply to any sales made electronically: for example, using email, through your website or via text message. The regulations apply to sales to businesses as well as to consumers. (Distance sales to consumers using electronic means are covered by both the E-Commerce Regulations and the Consumer Contracts Regulations, above.)
Under the Regulations, when you advertise or sell, you must provide information including:
- your business name, geographical address and contact details
- details of trade organisations or professional bodies you belong to
- information on any authorisation scheme (eg for financial services)
- your VAT number
- prices, and whether they include taxes and delivery costs
Any commercial communications (such as emails) must be clearly identifiable as a commercial communication from you, and clearly identify any promotional offers, competitions or games, and any conditions.
If you have automated systems allowing orders to be placed electronically (eg through your website), you must also provide additional information, including details of how contracts are made and how errors can be corrected. You must also provide prompt confirmation of the order.
The Consumer Rights Act 2015
The Consumer Rights Act covers goods and services ordered at home (for example through mail order catalogue, direct selling or online) and digital content. All goods must be as described, fit for purpose and of satisfactory quality. If goods are found to be faulty, you must give a full refund up 30 days after the item was purchased. If goods prove faulty up to six months after purchase and they can't be repaired or replaced, consumers are also entitled to received a full refund in most cases.
Consumers are not entitled to demand a refund or replacement just because they change their mind.
If you sell digital content (eg music, games, ebooks or software), consumers can claim repair or replacement if the content they have downloaded is faulty. If the fault can't be fixed, or can't be fixed within a reasonable amount of time or without significant inconvenience to the consumer, they will be entitled to claim some or all of their money back.
Consumers also have a 14-day right to change their mind and claim a full refund for digital content they have purchased, unless they have already started to download it.
If in doubt about your legal obligation when selling at a distance, take legal advice.
