Distance selling

If your business sells to individual consumers (rather than other businesses) at a distance: for example, by mail order, the internet, email, fax or over the telephone — you must comply with the Consumer Contracts (formerly Distance Selling) Regulations. If you sell using electronic means: for example, by email or through your website — you must also comply with the E-Commerce Regulations, regardless of whether your customers are individuals or businesses

The Consumer Contracts (formerly Distance Selling) regulations

On 13 June 2014 the Distance Selling Regulations were replaced with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These apply to sales of goods or services to consumers without face-to-face contact. This includes selling by mail order, through the internet, using digital television, or by telephone, fax or text message.

There are some exemptions. The regulations do not apply to:

  • a one-off distance sale made in response to a customer request but they do apply if you organise your business to regularly deal with such requests
  • sales of financial services (but these are covered by separate regulations including the Financial Services Distance Marketing Regulations)
  • sales of land or buildings, including lease agreements for three years or more
  • sales using vending machines or automated commercial premises, and public payphones
  • sales at auction (including internet auctions)

Under the regulations, you must:

  • give customers specified ‘prior information’ before a sale is made
  • usually, give customers a right to cancel their order
  • confirm prior and certain other information in a durable form (eg in writing or email)
  • normally, fulfil your contractual obligations within 30 days unless otherwise agreed

The e-commerce regulations

The E-Commerce Regulations apply to any sales made electronically: for example, using email, through your website, using interactive TV or via phone texts. The regulations apply to sales to businesses as well as to consumers. (Distance sales to consumers using electronic means are covered by both the E-Commerce Regulations and the Consumer Contracts Regulations.)

When you advertise or sell, you must provide information including:

  • your business name, geographical address and contact details
  • details of trade organisations or professional bodies you belong to
  • information on any authorisation scheme (eg for financial services)
  • your VAT number
  • prices and whether they include taxes and delivery costs

Any commercial communications (such as emails) must:

  • be clearly identifiable as a commercial communication from you
  • clearly identify any promotional offers, competitions or games and any conditions

If you have automated systems allowing contracts to be made electronically (eg through your website), you must also provide additional information, including details of how contracts are made, how errors can be corrected. You must also provide prompt confirmation of any orders placed electronically.

If in doubt, take legal advice.

Requirement

Exceptions

Prior or pre-contract information to be given before a sale is made

  • Your business name and, if you require payment in advance, your postal address
  • A description of the goods or services and, if you are supplying them on a continuing basis, the minimum term
  • 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
  • The arrangements for delivery (or performance of the service)
  • Information about cancellation rights
  • Whether you may supply a substitute if the goods or services are not available (and, if so that you will meet the cost of returning unwanted substitutes).
  • If the sale is of digital content, additional information about, for example, its functionality and compatibility.
  • Accommodation, transport, catering or leisure services to be provided on a specific date or within a specified period
  • Everyday food and drink delivered by a regular roundsman (such as a milkman)
  • Package travel or timeshare sales (covered by separate regulations)
  • Premium rate telephone services (covered by separate regulations)     

Cancellation rights

Customers have the right to cancel a purchase within 14 calendar days of receiving goods or the durable confirmation (see below), whichever is later. This ‘cooling off’ period extends to a maximum of three months and seven working days after delivery if the customer is not given written (‘durable’) confirmation of the required information, and written confirmation of their right to cancel.

You must make a model cancellation form available for distance and door-step sales. If you provide digital downloads eg of music or films, 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.

Similar rules apply for services.

The Regulations do not require customers who cancel to return your goods, but they must take reasonable care of them and make them available for you to collect. You must refund the customer as soon as possible but in any case within 14 calendar days of receipt of cancelled goods.

The exception is if your contract requires the customer to return your goods if they cancel. In that case, if they do not return them, they must pay your costs incurred in collecting them

As for prior information (see above), plus:

  • Goods made to a customer’s specification (but not standard upgrades or variations)
  • Perishable goods
  • Goods that cannot be returned
  • 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.

Prior and other information to be provided in writing (‘durable’ confirmation)

  • The prior information (see above)
  • How the customer can exercise their cancellation rights, including whether the contract requires them to return unwanted goods if they cancel, and who will pay the costs of returning those goods
  • 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 the contract can be cancelled

The confirmation information must be provided in good time  at the latest, when the goods are delivered or the service performed. Information can be provided by letter, fax or email, or in the original mail order advertisement or catalogue.

As for prior information (see above)