21 FAQs people ask about distance selling and marketing
- What kinds of selling count as distance selling?
- Are any types of business excluded from the Consumer Contracts (formerly Distance Selling) regulations?
- Does it count as distance selling if we have had face-to-face contact with the customer for a previous purchase?
- What rules are there on what we can say in our mail shots or on our website?
- What information do we have to give customers before they make a purchase?
- What confirmation details do we have to give the customer?
- When does a purchase contract become legally binding?
- How quickly do we have to deliver goods (or provide a service)?
- What right to cancel a purchase do customers have?
- What exceptions are there to the right to cancel a purchase?
- What happens if we have already provided part or all of a service before the end of the cooling-off period?
- What happens if a customer cancels a purchase made on credit?
- Can we send customers goods on approval?
- Can customers cancel a purchase once the cooling-off period is over?
- Who pays for the costs of returning unwanted goods?
- Do the distance selling rules apply to international sales?
- If we sell or market electronically (for example, through the internet) are the rules the same as for any other kind of distance marketing
- Are we allowed to 'cold call' potential customers?
- Are we allowed to send unsolicited mail shots?
- Are we allowed to send unsolicited emails or instant internet messages?
- Are we allowed to send unsolicited SMS messages?
1.What kinds of selling count as distance selling?
The regulations relating to distance selling (Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013) apply to sales of goods and services to consumers where there has been no face-to-face contact between the customer and your business (or someone acting for you). The regulations apply to selling by mail order, via the internet (or digital television), by telephone or by fax.
You are exempt from the regulations if you make a one-off distance sale in response to a request from a customer. However, this exemption does not apply if you have organised your business to regularly deal with "one-off" requests.
There are also a number of exemptions for particular products and services.
2. Are any types of business excluded from the Consumer Contracts (formerly Distance Selling) regulations?
The Consumer Contracts (formerly Distance Selling) regulations do not apply to:
- Business to business sales;
- Sales of financial services. (Sales of financial services are covered by other regulations);
- Sales of land or buildings, including lease agreements for three years or more;
- Sales using vending machines or automated commercial premises, and public pay phones;
- Sales at auctions (including internet auctions).
In addition, some products and services are exempt from the requirements to provide specified information or from the right to cancel.
3. Does it count as distance selling if we have had face-to-face contact with the customer for a previous purchase?
In general, if you have not had face-to-face contact in connection with an individual order, it counts as distance selling. For example, you might provide a catalogue and take a first order face-to-face; if a customer places a subsequent order without seeing you again, that is distance selling.
4. What rules are there on what we can say in our mail shots or on our website?
Mail shots and advertisements on websites are covered by the UK Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing (CAP code). In essence, this requires ads to be legal, decent, honest and truthful. Following a recent change in the law, the CAP code now also applies to Facebook, Twitter and any other non-paid-for online space you control (eg blogs or other social media sites such as LinkedIn). Read an online version of the CAP code on the Committee of Advertising Practice website. Mail shots and websites are also covered by the Consumer Protection from Unfair Trading Regulations, which makes giving false or deceptive information about your goods or services an offence.
You should also be aware that what you say in your mail shots (or on your website, Facebook page, blog etc.) may become part of any eventual contract. So, for example, if a customer purchases something because of a false claim on your website, they may be entitled to make a claim against you.
5. What information do we have to give customers before they make a purchase?
You must provide clear information to help the consumer decide whether to buy from you. This "prior information" must include:
- Your business name and, if you require payment in advance, your postal address;
- A description of the goods (or services). (If you are supplying goods or services on a continuing basis, you must also tell them what the minimum term is);
- The price (including taxes) and how long the price and any special offer will remain valid;
- Details of any delivery costs;
- How payment can be made;
- Details of arrangements for delivery (or performance of a service);
- Information about the customer's right to cancel;
- Information about refunds and cost of returns;
- If the sale is of digital content, additional information about, for example, its functionality and compatibility;
If you want to supply substitute goods because the ones you agree to supply are not available, you must explain this, and make it clear that you will meet the costs of returning any substitutes the customer does not want.
You do not have to provide prior information if you are agreeing to provide accommodation, transport, catering or leisure services on a specific date or within a specific period. So, for example, you can take a phone reservation for a room in your hotel without being required to provide this information.
In addition, the information requirements of the Consumer Contracts regulations also do not apply to sales of package travel or timeshares (which are covered by separate regulations), nor to everyday food and drink delivered by a regular "roundsman" like a milkman. This exception does not apply to home deliveries by supermarkets.
6. What confirmation details do we have to give the customer?
If you are required to provide "prior information", you must provide it in a durable form (see below). You can do this when you first provide the information or later. As well as the prior information, you must provide details of the following:
- How the customer can exercise their cancellation rights, including how to return unwanted goods and who will pay;
- Any guarantees or after-sales service you provide;
- Your geographical address for the customer to contact you with any complaints;
- For contracts lasting more than one year (or indefinitely), under what conditions they can cancel the contract.
You can provide information in a durable form by letter, fax or email or in an advertisement or catalogue. All confirmation information must be provided in good time - at the latest when the goods are delivered (or the service performed).
7. When does a purchase contract become legally binding?
Under normal contract law, a contract becomes binding when an offer is made and accepted. This can be either when you make an offer to sell to the customer, which the customer accepts, or when the customer makes an offer to buy from you, which you accept. However, under the regulations, your customer will normally have the right to cancel a purchase — under new regulations that came into force on 13 June 2014; this is now 14 calendar days after the delivery of the goods.
As you are bound by the contract once it is made, you do not want to enter into any contracts that you will be unable or unwilling to fulfil. This can happen, for example, if you offer to sell a product (and the customer accepts your offer) but you then find that you do not have the product in stock. For this reason, you may want to ensure that your marketing materials (for example, your catalogue or your online shop) state that you are not making an offer but are issuing an "invitation to treat" and that any offer the customer makes to buy from you will only be accepted when you say so.
8. How quickly do we have to deliver goods (or provide a service)?
Unless you have agreed otherwise, you must deliver goods (or start providing the service) within 30 days of the order.
If you are not able to meet this deadline, you must tell the customer (within the deadline) and ask them to accept a delay. If they do not accept, the contract is cancelled and you must refund any money they have paid within 30 days.
9. What right to cancel a purchase do customers have?
Customers usually have the right to cancel a purchase by giving you written notice within a specified time frame, though there are significant exceptions. Notice can be given by letter, fax or email, but not by phone.
Purchases of goods or services can be cancelled up to 14 calendar days after the delivery of the goods or the service contract commences. You must make a model cancellation form available for distance and door-step sales. If you provide digital downloads eg of music, films, computer games or apps these cannot be cancelled once the download process has started, but you must make this clear to the consumer - and the consumer must explicitly agree to this. However if the digital content is faulty, the consumer is entitled to a repair or replacement and if the fault can't be fixed or isn't fixed within a reasonable amount of time or without significant inconvenience, they can claim some or all of their money back. If you have failed to provide confirmation of all the required information, the cancellation period is extended to seven days after you provide the information — with an overall maximum of three months and seven working days.
A customer who cancels a purchase must take reasonable care of any goods you have supplied and make them available for you to collect. You must refund the customer any money they have paid as soon as possible, and in any case within 14 calendar days of receipt of cancelled goods. Unless you are collecting the cancelled goods, you are entitled to wait for evidence of the return of goods before giving a refund. You are also permitted to deduct damages for wear and tear where the goods have been used. Make sure the customer is informed, in plain language, of who is responsible for the cost of returning goods and other information regarding cancelling purchases and refunds. If you don't make this clear, you will be responsible for the return of cancelled purchases.
You can agree a contract that requires the customer to return the goods to you if they cancel and to pay the direct costs of your recovering the goods if they fail to do so. If so, this must be included in the information you confirm to them. You cannot, however, require the customer to pay the cost of returning any faulty or substitute goods.
10. What exceptions are there to the right to cancel a purchase?
Unless you have agreed otherwise, customers do not have an automatic right to cancel purchases of:
- Accommodation, transport, catering or leisure services that you have agreed to provide on a specific date or within a specific period;
- Package travel or timeshare;
- Food and drink for everyday consumption supplied by a regular roundsman, such as a milkman;
- Goods made to a customer's specification (but not standard upgrade options, such as the amount of memory in a PC);
- Perishable goods;
- Other goods that cannot be returned (such as electricity);
- Recordings and software that have been unsealed;
- Newspapers and magazines;
- Betting and similar services;
- Goods and services whose price depends on fluctuations in the financial markets;
- Digital downloads, once the download process has started - but this must be made clear to the consumer and the consumer must explicitly agree to this.
11. What happens if we have already provided part or all of a service before the end of the cooling-off period?
In general, the customer still has the right to cancel before the end of the cooling-off period. One way round this is to agree with the customer, when you are negotiating the contract, that they will not be able to cancel once performance of the service has started. You must agree this before you agree the contract, and must confirm this as part of the durable information you provide.
The customer's right to cancel automatically ends if you start performing the service with the customer's agreement and have already provided the required durable information. But if you start performing the service without the customer's agreement, the customer will still have the right to cancel until the end of the cooling-off period.
12. What happens if a customer cancels a purchase made on credit?
If the purchase is being made under a related credit agreement (eg credit offered by you or a related business), the credit agreement is automatically cancelled.
If the customer has used credit not related to you (for example, a credit card but not your own store card), that credit agreement will still stand — but you are required to refund the customer as soon as possible and in any case within 30 days. In practice, credit card issuers usually have systems (and agreements with you) that allow them to automatically reclaim any such refund.
13. Can we send customers goods on approval?
You can if the customer agrees. If so, your agreement should clearly state what rights the customer has to return goods he does not want, who will be responsible for returning the goods and so on.
However, if you send goods on approval without the customer's agreement, the situation is completely different. The customer is under no obligation to return the goods to you (or to allow you to collect them) and it is an offence for you to demand payment for them.
14. Can customers cancel a purchase once the cooling-off period is over?
While the customer's cancellation rights under the Consumer Contracts regulations come to an end once the cooling-off period is over, consumers have other rights. For example, they can reject goods that you have misdescribed or that are faulty.
If goods develop a fault within six months of being supplied, it will generally be assumed that the fault was there when you sold them (unless you can prove otherwise). So customers will be able to return these goods to you and require a refund. You should not require customers to pay for the cost of returning faulty goods.
15. Who pays for the costs of returning unwanted goods?
Unless you have agreed otherwise in the contract, the customer is not obliged to return the goods to you at all — they are simply required to make them available for you to collect.
You can, however, agree a contract that requires the customer to return the goods to you if they cancel and to pay the direct costs of your recovering the goods if they fail to do so. If so, this must be included in the information you confirm to them. You cannot, however, require the customer to pay the cost of returning any faulty or substitute goods.
16. Do the distance selling rules apply to international sales?
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (formerly Consumer Protection (Distance Selling) Regulations 2000) protect UK consumers, and apply regardless of which country a supplier is based in.
Many other countries have similar laws protecting their consumers which will apply to any supplier — including businesses based in the UK. Within the European Union, most countries' consumer protection laws are very similar.
17. If we sell or market electronically (for example, through the internet) are the rules the same as for any other kind of distance marketing
The distance selling regulations apply to sales made to consumers over the internet (or using other technologies such as digital television) in the same way as they apply to selling using mail order.
There are also additional regulations you need to consider:
- Any advertisements on your website need to comply with regulations on advertising;
- If you collect any personal information you must comply with the Data Protection Act;
- Sales to businesses are covered by ecommerce regulations, which create similar information requirements to the Consumer Contracts (formerly Distance Selling) regulations (but do not give business customers automatic cancellation rights);
- You must make it clear when clicking a button on a website incurs a charge - pre-ticked boxes for chargeable services on order forms have been banned as has using premium rate customer telephone helplines.
18. Are we allowed to cold call potential customers?
You can make cold calls, but you must not make unsolicited marketing calls to individuals or businesses who have indicated that they do not want to receive them. They can do this either directly to you or by registering with the Telephone Preference Service.
If you are making a marketing call, you must clearly state the name of your business and explain the nature of your call at the start of the conversation.
Pestering customers with repeated unwanted phone calls is an offence under the Consumer Protection from Unfair Trading Regulations.
19. Are we allowed to send unsolicited mail shots?
Individual consumers can register with the Mailing Preference Service (MPS) to say that they do not want to receive direct mail from companies with which they do not have an existing relationship. Use of the MPS list is not a legal requirement, but direct mail companies, such as mailing list providers and members of the Direct Marketing Association, will screen their mailing lists against it.
20. Are we allowed to send unsolicited emails or instant internet messages?
If you do not have an existing relationship for a similar product, you should not send unsolicited emails or "spam" to consumers. You must only send messages if the consumer has previously agreed (for example, by opting-in on your website).
There is a limited exception where you are allowed to send emails to individuals when the following three conditions are met:
- You obtained their email address in the course of a sale or negotiation for a sale;
- You only send messages relating to similar products and services;
- They were given the option to opt-out when you collected their address, and are given the same option each time you mail them.
You can send unsolicited emails to companies, but must include an opt-out so they can say they do not want to receive similar messages in future.
Where you send an email to several recipients, you should also take care to ensure that you do not accidentally disclose other recipients' email addresses. This could be a breach of the Data Protection Act's requirement that you keep personal data secure.
The same rules apply to using any other form of internet communication such as instant messaging software.
21. Are we allowed to send unsolicited SMS messages?
SMS messages are covered by the same rules as email: unless you have a relationship with them, you can only send emails to individuals who have opted-in and to companies who have not opted-out. You must also provide a simple method for recipients to opt-out from receiving further messages.
Few organisations use faxes anymore, however you must not send an unsolicited fax to an individual without their prior consent. You can send unsolicited faxes to companies, but not if they have asked you not to or registered their fax number with the Facsimile Preference Service.