The Distance Selling Regulations are an important set of rules applying to any business that sells goods or services at a distance – for example, by mail order, over the internet, by phone, or via digital television.
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Tens of thousands of businesses fall within the remit of the Distance Selling Regulations (DSRs), and compliance is a legal obligation. Yet many firms do not understand their requirements.
A recent investigation by the BBC illustrated this problem particularly clearly. The probe found that the retailer Next had been failing to refund delivery charges in cases where products were promptly returned – in contravention of the DSRs.
The fact that such a large retailer had been unfamiliar with its obligations under the Regulations suggests that many other firms may also be non-compliant without realising it. If you sell goods or services at a distance, it is important that you understand the DSRs, and make your business compliant.
What are the Distance Selling Regulations?
The Consumer Protection (Distance Selling) Regulations 2000 came about as a result of a European Directive on consumer rights. The purpose of the Directive, and of the Regulations, was to help ensure that consumers are properly protected when buying goods at a distance.
This method of shopping has grown in popularity as the number of online retailers has increased. The Regulations recognise that consumers shopping in this way generally cannot inspect goods before they make a purchase, and that extra steps must be taken to help these individuals.
What do I need to do to comply with them?
There is a range of important requirements outlined in the Regulations.
Provision of information
You must provide consumers with a certain amount of ‘pre-contractual’ information – that is, you must make certain things known before a purchase is made.
Consumers must be able to determine the identity of your business. You must provide a description of the “main characteristics” of the goods or services you are selling, along with their price – including all relevant taxes.
You must also clearly explain the delivery charges, and the acceptable methods of payment. If payment is required in advance, you must give your full address.
You must give details of delivery arrangements, or of the date on which the service will be performed. Contracts must be fulfilled within 30 days unless the consumer agrees to a different arrangement.
You are also obliged to give consumers a range of information once they make a purchase, including information regarding guarantees and after-sales service, as well as a full geographic address. If the pre-contraction information was provided in ‘non-durable’ form (for example over the phone), you must also provide durable copies once a purchase has been made.
Unless other arrangements have been made and agreed to by both parties, contracts must be completed within 30 days. If you cannot accomplish this, you must inform the customer within the 30 day period.
If you fail to complete the contract within 30 days you can try to negotiate a new timetable for delivery – but the customer is not obliged to agree. If you cannot come to an agreement, you must refund all money paid – including postage and packing. The refund must be made as quickly as possible, and must be completed within a maximum of 30 days.
You may not charge a customer the cost of insuring items in shipping. The items are legally under your ownership until the customer accepts them.
You should also remember that delivery charges must be refunded if a customer returns goods within seven days.
Distance consumers have more generous cancellation rights than those who purchase in a store. Cancellation periods depend on the point at which you provide the consumer with the durable information detailed above.
If you are selling goods (rather than services), and you provide the information no later than the time at which the goods are delivered, the consumer has seven working days in which to cancel. If you provide the information within three months of the date of delivery, the consumer can cancel within seven days of receiving the information. If you provide the information after three months, or fail to provide it at all, the consumer can cancel at any time up to three months and seven days following the day after the goods were delivered.
If you are providing services (rather than goods), and you provide the information on or before the day the contract is concluded, the consumer has seven days from the day after the contract is concluded in which to cancel. If you provide the information within three days of the date on which the contract is concluded, the consumer can cancel at any time within seven days of the date on which the information is received.
These are some of the key provisions contained in the DSRs – but there are many others not listed here. You should read the Regulations in order to ensure that you are compliant.
It is important that you understand the Distance Selling Regulations if you sell goods or services at a distance. Failure to comply with the rules could lead to action in the small claims court, or an investigation by the Office of Fair Trading or Trading Standards Services.