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.

Comments

Interesting post thanks, was wondering do you have any opinion on a couple of other aspects of the distance selling regs.

DSR states there are exceptions to the Act and these include auctions - do you think eBay falls into this category - and if so is a 'buy it now' listing still exempt?

Does any exception exist, or can conditions be applied to sale of clothing where it is clear that the item has been worn, to allow the trader to refuse return?

Does any exception exist, or can conditions be applied to the sale of books, where customer could easily read and return it?

Very clear article, thank you.

Does anyone know of cases dealing with what quailfies for providing "identity of the supplier"?

Best regards

Ben

Under the distance selling regulation does it affect the rights to cancellation if the customer visits the business premises and inspects the goods before taking delivery

DSR states there are exceptions to the Act and these include auctions - do you think eBay falls into this category - and if so is a ‘buy it now’ listing still exempt?

I have a website which does not give prices, or the ability to place orders online. Purchasers can telephone or email to make an individual enquiry and I give them an individual quotation. Most customers are businesses, but some are consumers. Do the DSR's apply to the consumer sales, or are they regarded as one-off contracts concluded by email or telephone, and therefore exempt? Thanks

Good afternoon,

Very interesting article. Doers the supplier needs to have a registered company to sell its service via web on international level?

Many Thanks, Grace

Please would someone let me know when it says "Leisure Services" aren't included in the distance selling regs... what does leisure services include? or to ask another question... would a gym membership fall under the category of leisure services?

Thanks for your help...

What do you mean by "right of withdraw"?

Are you referring to the specific right under the Distance Selling Directive - or rights to withdraw from contracts (or some class of contracts) more generally?

hi
I am a student of law and subject of my Thesis is "right of withdraw".can you help me about this subject?where can I download article about it?
thanks.
please a guide me

A retailer ordered an LED flame effect fire for me by phone. The fire is unsatisfactory and I wish to return it and claim a refund but he claims he is exempt from the Distance Sales Regulations Act as he does not normally sell goods in this way and has refused. Please could you tell me if I have any consumer protection rights to help me in this situation ?

The Regulations apply to "distance contracts".

These are defined as "any contract concerning goods or services concluded between a supplier and a consumer under an organised distance sales or service provision scheme run by the supplier who, for the purpose 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".

It sounds like in your seller is trying to argue that what he is doing isn't "an organised distance sales .. scheme". Although I can't be 100% sure from your short description of the facts, it sounds to me like he might be right.

If the fire is unsatisfactory because of quality issues, or it was misdescribed, then you may however have rights under other legislation. 

Is this topic still active? I have an issue with a retailer who has ads on yell with a link to his web site and a tel no. He took an order over the phone after sending quote acceptance form via email, there was no face to face contact upto and including the time the contract was concluded, I did however collect the goods sometime later, for this reason the retailer is claiming the DSR's dont apply, which I find odd as the right to cancel exists from the point the contract is concluded till 7 days after the day the goods are recived.

If this was a one-off order, it may not amount to an organised distance sales scheme. However, your description of the circumstances suggest that this manner of contracting is not one-off.

Certainly, the fact that goods are collected does not affect the right of cancellation.

Note that the cancellation period may be a good deal longer than 7 days if the proper information has not been disclosed.  See Reg 11:

http://www.legislation.gov.uk/uksi/2000/2334/regulation/11/made

I paid for a service (based in London), which prepares CV's for people wanting to emigrate, for specialised sectors in the Australian Jobs market.  I paid in full but due to other issues I had to cancel. I cancelled before any work had begun and have not received anything from them. I also cancelled within 7 business days of paying. Their cancellation terms only state that I cannot cancel after the services has started. However, the service had not started. They are refusing to give me a refund which they argue is their right under DSRs. Are they right? Thanks

Section 13(1)(a) as amended by the 2005 Regulations sets out the law on this:

Unless the parties have agreed otherwise, the consumer will not have the right to cancel the contract by giving notice of cancellation pursuant to regulation 10 in respect of contracts ... for the supply of services if the performance of the contract has begun with the consumer’s agreement— (i) before the end of the cancellation period applicable under regulation 12(2); and (ii) after the supplier has provided the information referred to in regulation 8(2).

So, assuming the service provider's documentation and procedures are in order (which they may not be, given the pernickety rules), the question is whether "the performance of the contract has begun".

If (i) you have not received any output from the services; and (ii) they have not yet done anything in relation to the substantive subject matter of the contract, then the contract performance has probably not begun. Just opening a client file will not, in my view, amount to the beginning of performance.

Narrow boats are excluded from Time Share Act 1992. The DSRs state that there are exclusions for timeshares as they are covered in the 1992 laws. These laws however exclude narrow boats, which are not therefore covered. Does this mean that they are covered by the DSRs?

What the DSRs say at Reg 6(1) is: "Regulations 7 to 20 shall not apply to a contract which is a “timeshare agreement” within the meaning of the Timeshare Act 1992(1) and to which that Act applies" (emphasis added).

If that Act does not apply to narrow boats, then clearly the exclusion in 6(1) will not apply.

However, there is also an exclusion in 6(2) which may be relevant: "Regulations 7 to 19(1) shall not apply to ... contracts for the provision of accommodation ... services, where the supplier undertakes, when the contract is concluded, to provide these services on a specific date or within a specific period."

I know next-to-nothing about timeshares, but I'd guess that some will fall within this exclusion - and some will fall without.

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