The amendments are being made to the Consumer Protection (Distance Selling) Regulations of 2000, which were based on a European Directive. The Regulations apply to sales to consumers 'at a distance' – be it over the internet, by mail order, telephone, fax or digital TV.
Consumers were given new rights in the Regulations, including a minimum period of seven working days during which they can cancel any contract concluded at a distance. The rules also specified certain information that must be given to consumers before they buy, which can be displayed on a web site or described over the telephone, and additional information that must be given before or shortly after concluding a contract in writing (which can be by e-mail).
When the contract is for services rather than goods, such as taking out a mobile phone contract, the Regulations said that the key written details must be provided prior to the conclusion of the contract, or "thereafter, in good time and in any event [...] during the performance of the contract."
They also said that, prior to the conclusion of a contract for the supply of services, "the supplier shall inform the consumer in writing [...] that, unless the parties agree otherwise, he will not be able to cancel the contract [...] once the performance of the services has begun with his agreement."
Some suppliers found this difficult. Sometimes the order would be placed over the phone, with the hire to begin the same day. The supplier could not get anything in writing to the consumer – leaving it open to the consumer to withdraw.
The main difference from today is that a supplier no longer needs to inform the consumer in writing before the contract is made that he will not be able to cancel the contract once the supply of services has begun.
Instead, the supplier must, in such cases, provide the consumer with information as to how the right to cancel may be affected if the consumer agrees to performance beginning less than seven working days after the contract was concluded. This information must be provided prior to or in good time during the performance of the contract.
There is still an incentive for suppliers of service to get the written information to consumers as soon as possible, because the longer it takes to provide this information, the longer the consumer has to cancel the contract, even after the provision of services has begun.
Gavin McGinty, an e-commerce lawyer with Pinsent Masons, the law firm behind OUT-LAW.COM, said:
"This could have serious knock-on consequences for a company's stock control and balance sheet. Smart companies, therefore, will send this information out as soon as possible after the order, which makes them seem consumer friendly, but which is also protecting their position."
Other parts of the original Regulations are amended so that:
Since the changes were agreed by the DTI some months ago their value has been significantly undermined by the European Court of Justice's ruling in the EasyCar case.
The changes to the Regulations were originally suggested in response to comments from the BVRLA, the trade association for the car hire industry. However, the European Court has recently decided that car hire companies can now take advantage of an exemption applying to "transport services", meaning that they are exempted from having to provide a cancellation period to consumers.