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OFT "web sweep"
In the first two weeks of December the Office of Fair Trading in partnership with the Local Authority Trading Standards Services, carried out a 'web sweep' of around 600 of the UK's top retail websites to ensure they comply with key e-tailing laws.
Particular attention was paid to checking compliance with the Distance Selling and E-Commerce Regulations. The results of that analysis were published last month and the findings show the sort of common mistakes being made by e-tailers, and the compliance checklist used in this research.The Distance Selling Regulations deal with business to consumer sales made in a non face to face context, so they apply to internet sales. They set out a number of consumer rights, including 7-day post-purchase cance
llation rights, a right to a refund and a raft of information which must be provided pre- and post-sale. The E-Commerce Regulations 2002, require e-tailers to provide shoppers with certain information, including the identity, location and contact details, geographical addresses and clear pricing statements.Paula Barrett, partner at law firm Eversheds, comments “The OFT's take on e-tailing is that just because consumers choose to buy on line doesn't mean shouldn't mean that they have fewer rights than if they walked in to shop on the high street. You would know who you were dealing with and wouldn't be charged for returning faulty goods, for example.”
It's important therefore for e-tailers to revisit their website terms and check the following points:
- Make sure the correct name of your business and a full address are provided - not just a PO Box number - so people can know who they are dealing with and where they are based.
Additional charges must be added when the price is first shown - not just at the checkout. 40% of the websites reviewed failed on this point.
Consumers are entitled to a 7 day post purchase cancellation right (with some limited exceptions). Have you provided for this and is your returns policy consistent with your terms of supply?
On the cancellation of a contract, any sum paid by the consumer must be repaid as soon as possible and, in any case, within thirty days of cancellation. The full price paid for the goods and the cost of delivery must therefore be refunded. In the Web Sweep a signifncant 56% excluded the original cost of delivery from the refund. The most common mistake in their review.
Consumers aren't obliged to pay for the cost of return if the goods are faulty. If you want to be able to charge for postage an e-tailer may (except where goods are returned because they are faulty) impose a reasonable charge to cover postage costs. This has to be clear in the contract and the consumer has to get notice 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 gooods, the consumer will be under a duty to restore those goods to the e-tailers 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.
It's not just these Regulations you need to consider. The Web Sweep also looked at compliance with the Unfair Terms in Consumer Contracts Regulations, the Consumer protection Act, Price Marking Order, Sales of Goods Act to name but a few other pieces of relevant legislation. Many consumer facing sites are still adopting terms and conditions which include terms which are inconsistent with these regulations, particularly on limits on liability.
Paula continues:
“Overall the analysis seems to show that whilst there is a growing awareness about the regulations, some e-tailers (even some of the larger ones) are still falling down on the detail. It is interesting to note that the results have not only been communicated to the offending e-tailer but also to the relevant enforcement authorities. Whilst there has to date been guidance issued, there has been little visible enforcement activity around the Distance Selling Regulations and this has led to complacency by some e-tailors about the legal compliance issues around e-tailing. Looks like the OFT is minded to do something about that.”
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