Distance Selling Regulations: disclosures

The Consumer Protection (Distance Selling) Regulations 2000 (the “Distance Selling Regulations”) came into force on 31 October 2000.  They implemented into English law the main provisions of Directive 97/7/EC of the European Parliament and the Council of 20 May 1997 on the protection of consumers in relation to distance contracts. This post focuses upon the information that must be disclosed by a website operator where the Distance Selling Regulations apply.  I will cover the details of the right of cancellation under the Regulations in a future post.

The Distance Selling Regulations apply to “any contract concerning goods or services concluded between a supplier and a consumer under an organised distances sales or service provision scheme run by the supplier who, for the purposes of the contract, makes exclusive use of one or more means of distance communication up to and including the moment at which the contract is concluded” (Regulation 3(1)). However, there are certain classes of contract that always fall outside the Regulations in whole or part.

The following types of contract are entirely exempted from the Regulations:

• contracts for the sale or other disposition of an interest in land except for a rental agreement;
• contracts for the construction of a building where the contract also provides for a sale or other disposition of an interest in land on which the building is constructed, except for a rental agreement;
• contracts relating to financial services (these are subject to a separate set of regulations); contracts concluded by means of an automated vending machine or automated commercial premises;
• contracts concluded with a telecommunications operator through the use of a public pay-phone; and
• contracts concluded at an auction.

In addition, the following types of contract are exempted from most of the provisions of the Regulations (including the disclosure provisions):

• timeshare agreements;
• contracts for the supply of food, beverages or other goods intended for everyday consumption supplied to the consumer’s residence or to his workplace by regular roundsmen; and
• contracts for the provision of accommodation, transport, catering or leisure services, where the supplier undertakes, when the contract is concluded, to provide these services on a specific date or within a specific period.

These exemptions are quite narrow, and most contracts made between suppliers and consumers via a website for the supply of goods or services will be subject to the Distance Selling Regulations. Regulations 7 and 8 of the Distance Selling Regulations set out the disclosure requirements.  There are slightly different rules affecting disclosures required under the different Regulations.

Under Regulation 7, in good time prior to the conclusion of the contract to which the Regulations apply, the supplier should provide to the consumer the following information:

• the identity of the supplier and, where the contract requires payment in advance, the supplier’s address;
• a description of the main characteristics of the goods or services;
• the price of the goods or services including all taxes;
• delivery costs where appropriate;
• the arrangements for payment, delivery or performance;
• the existence of a right of cancellation (except excluded cases);
• the cost of using the means of distance communication where it is calculated other than at the basic rate;
• the period for which the offer or the price remains valid; and – where appropriate, the minimum duration of the contract, in the case of contracts for the supply of goods or services to be performed permanently or recurrently.

Also under Regulation 7, and also in good time prior to the conclusion of the contract, the supplier should:

• inform the consumer if he proposes, in the event of the goods or services ordered by the consumer being unavailable, to provide substitute goods or services (as the case may be) of equivalent quality and price; and
• inform the consumer that the cost of returning any such substitute goods to the supplier in the event of cancellation by the consumer would be met by the supplier.

The information must be provided in a clear and comprehensible manner “appropriate to the means of distance communication used”.  In the context of websites, this means, in my view, that the information should be provided in writing on the website and should be clearly signposted for users.

Under Regulation 8,  the supplier must supply certain additional information to the consumer in writing (or “another durable medium which is available and accessible to the consumer”).  In principle, the information may in some circumstances be supplied after the contract has come into force.  However, in the case of distance contracts entered into via a website, it is difficult to see why it should not always be supplied before the contract has come into force – particularly as a delay in supplying the information can lead to an extension of the cancellation period for the contract.  If you are a supplier and are considering supplying any of the information listed below after the conclusion of contracts, you should look closely at the Distance Selling Regulations and take advice as necessary.

In any case, the additional information to be disclosed under Regulation 8 is:

• information about the conditions and procedures for exercising the right to cancel under the Distance Selling Regulations (including where a term of the contract requires (or the supplier intends that it will require) that the consumer shall return the goods to the supplier in the event of cancellation, notification of that requirement; and information as to whether the consumer or the supplier would be responsible under the Regulations for the cost of returning any goods to the supplier, or the cost of his recovering them, if the consumer cancels the contract under regulation; and in the case of a contract for the supply of services, information as to how the right to cancel may be affected by the consumer agreeing to performance of the services beginning before the end of the seven working day period).
• the geographical address of the place of business of the supplier to which the consumer may address any complaints;
• information about any after-sales services and guarantees; and
• the conditions for exercising any contractual right to cancel the contract, where the contract is of an unspecified duration or a duration exceeding one year.