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/ 16 Nov 2012

The New Consumer Rights Directive puts Consumer Trust at the Forefront…

Background: The new Consumer Rights Directive was the main current legislative initiative in consumer policy when the Commission presented its proposal in October 2008. It merges four existing EU consumer rights Directives into one set of rules (Council Directive 93/13/EEC, Directive 1999/44/EC, Directive 97/7/EC and Council Directive 85/577/EEC).

Why?: The overarching aim of the new Consumer Rights Directive is to achieve a real business-to-consumer internal market striking the right balance between a high level of consumer protection and the competitiveness of enterprises, while ensuring respect of the principle of subsidiarity. It effectively increases consumer rights and is predominantly aimed at distance sales (online, post, phone) and off premises selling (streets or doorstep). At the same time, it adapts existing legislation to new technology and sales methods, such as e-commerce and online “ebay” auctions.

Member states have to adopt and publish, by 13 December 2013, the laws, regulations and administrative provisions necessary to comply with this Directive. They must apply those measures from 13 June 2014 and the provisions of this Directive will apply to contracts concluded after this date (Article 28).
Importantly, the new Directive will repeal the current Distance Selling and Doorstep Selling Directive with a clear aim to ensure a level playing field across Europe and to increase consumer rights to reflect the fact that more and more selling is done online.

Some key changes are listed here:
▪ The consumer will have 14 days to cancel the contract for goods from the date the goods are received. Currently, the consumer has 7 days. Importantly this does not apply to personalised or customer specific goods. Also this right to cancel will extend to online auctions such as EBay, although only in relation to professional sellers.
▪ There will be a model form to cancel the goods.
▪ The period for refunds will be reduced to 14 days instead of 30 days. This will begin from the date of cancellation. This means that sellers will have to be ensure a quick turnaround when goods are sent back and refunds should be made promptly.
▪ Retailers will pay for returns unless otherwise specified. If the consumer is to pay, then, this must be made clear in the terms prior to purchase.
▪ Retailers must not charge more than the actual costs for the use of Credit cards, or any other payment i.e. retailers must not charge and make an extra profit.
▪ Traders will also not be able to charge consumers extra for communicating with them via telephone following the conclusion of a contract. In those circumstances the consumer should only have to pay “the basic rate”.
▪ There must be cost transparency and if there are any extra charges, then it must be obvious and transparent. Consumers must be informed in advance and if they are not they will be under no obligation to pay the charge in question.
▪ There is a general prohibition on pre-ticked boxes. A consumer must actively and expressly opt in for extras.

In conclusion, these changes will benefit the consumer and sellers will in the future have to comply with these conditions especially in relation to refunds in 14 days and the 14 day “cooling off period”. It will be better generally for consumers to have transparency when shopping from a distance. It will also be beneficial for consumers when sellers cannot use premium phone lines to charge consumers excessively!

Important consumer laws are in the process of revision. Hanne & Co can help you to respond to any queries these consumer protection laws will raise for your online business. We can keep you informed every step of the way and help you to appropriately adapt your online business contracts and processes for goods and services to be compliant with current and future consumer laws. Call us on 0207 228 0017 or email info@hanne.co.uk

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