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Is your e-commerce website compliant?
Archived article dated Tuesday December 11th 2007
The Office of Fair Trading ('OFT'), in partnership with the Local Authority Trading Standards Services, has announced a 'web sweep' of the top 600 UK retail websites to ensure they comply with key e-tailing laws. Particular attention will be paid to the Distance Selling Regulations.
The Regulations deal with business to consumer sales made in a non face-to-face context, applying to internet sales. They set out a number of consumer rights, including 7-day post-purchase cancellation rights, a right to a refund and a raft of information which must be provided pre- and post-sale.
Despite estimates that £14billion will be spent by consumers online this Christmas, recent research by OFT indicates that very few online shoppers are aware of additional legal protection provided by the Regulations and many websites may be failing to respect consumers' rights.
Paula Barrett, head of the data protection group at international law firm Eversheds, comments “Year on year the number of people choosing to do their Christmas shopping online is increasing, so the timing of this review is clearly no coincidence. The Regulations have been with us since 2000, but interpretation and application of the rules has not been consistent. While many e-tailers have picked up on the right to cancel in their terms, there are still many who impose other terms which are not compliant. In particular in relation to the return of goods - a significant operational pressure around Christmas.”
Aside from unwanted OFT or trading standards attention, it is important e-tailers get this right if they want to enforce their terms and conditions. Any term in a distance selling contract which is inconsistent with the protection of the consumer as set in the regulations is automatically void and therefore can't be relied on.
Some key mistakes include:
Unless the parties agree otherwise, the supplier must perform the contract within 30 days from the day after the consumer sent an order to the supplier. A contract which is not performed within the 30 day period shall be treated as if the consumer never entered into it, but the consumer will still have remedies for non-performance. It is very important therefore to be clear about delivery and performance commitments in the contract.
On the cancellation of a contract, any sum paid by the consumer must be repaid as soon as possible and, in any case, within 30 days of cancellation. The full price paid for the goods and the cost of delivery must be refunded.
A supplier can't oblige the consumer to pay for the cost of return if the goods are faulty. However a supplier may (except where goods are returned because they are faulty) impose a reasonable charge to cover postage costs incurred by them, but this must be clear in the contract and the consumer has to be notified of this in advance as part of the written confirmation relating to the right to cancel.
If the consumer has, before cancelling the contract, received the goods, the consumer will be under a duty to restore those goods to the supplier and, in the meanwhile, to retain possession of the goods and take reasonable care of them. Many e-tailers however seek to impose higher duties on return and care of the goods.
The supplier cannot delay making a refund even if the consumer has failed to return goods. Similarly, if a consumer returns damaged goods he or she does not necessarily lose the right to cancel. The supplier can only rely on the right of action against the consumer for breaching the statutory duty to take reasonable care of the goods.
And it's not just these Regulations which apply. The OFT also mentions the E-Commerce Regulations 2002, under which e-tailers must provide shoppers with certain information, including the identity, location and contact details, geographical addresses and clear pricing statements. It will also be interesting to see whether they also look at compliance with other consumer protection regulations at the same time, particularly limits on liability.
For some in the retail sector this may well prove to be unwelcome scrutiny at the very busy time of year. Although the OFT says the aim of the exercise is to “publish an
“In reality this may well be a wake up call for the sector as a whole, particularly if some of the larger e-tailers are found to be deficient. Many of the smaller e-tailers rely on larger brands to lead the way and assume they have got it right, even 'borrowing' terms and conditions from the bigger sites. That can all too often be a false assumption. While there has been guidance issued, there has been little visible enforcement activity around the Distance Selling Regulations and this has led to complacency by some e-tailers about the legal compliance issues around e-tailing. Looks like the OFT is minded to do something about that.”
Tagged as: eversheds
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