Out-Law News 3 min. read
21 Aug 2012, 2:43 pm
The Consumer Rights Directive, agreed by the European Parliament and Council in 2011, will give consumers across the trading bloc uniform rights to withdraw from online and distance purchases. It must be brought into force in individual member states by next year.
The UK will be required to apply the provisions of the Directive to all contracts between traders and consumers from 13 June 2014; however member states are free to exempt certain sectors including financial services, gambling, healthcare by regulated professionals, social services, package travel, timeshare, property transactions and most aspects of passenger transport. The consultation, open for comment on 1 November, seeks views on "areas where the UK may want to consider this carefully".
"It is our view that areas such as financial services and gambling are better covered through existing, sector specific legislation and that, therefore, we should not pursue the option of extending the [Directive] information and cancellation provisions to these sectors," the consultation document said.
Cancellation rights would not, it said, be appropriate with regards to distance selling of residential letting; however, the provisions in the Directive should be extended to other "excluded" areas including healthcare, social services, package travel and timeshare contracts.
Consumer Affairs Minister Norman Lamb said that, once in force, the Directive would help put an end to "certain bad business practices" by delivering greater clarity and transparency on consumer rights.
"This is an area where Europe can make a big impact on our day to day lives," he said. "Many people will have been ripped off at some point by hidden online charges while booking a holiday, premium rate helplines when returning a purchase or disproportionate and often unexpected charges for paying with credit or debit cards."
As well as protecting consumers, however, the new laws would also "boost business confidence" by setting out clearer rules and responsibilities and reducing compliance costs, he added.
The Consumer Rights Directive contains provisions on information that must be given to consumers before they buy goods or services either on the trader's premises or away from the trader's premises, both in cases where the trader is present - such as in the consumer's home, or at a trade fair - and online. It also contains provisions relating to delivery times, surcharges and "additional payments" for 'extras', which will now have to have the active or express consent of the consumer before they can be added to a transaction. This will prevent retailers from including "pre-ticked boxes" online.
Once in force the Directive will prevent traders from charging consumers extra for communicating with them via telephone following the conclusion of a contract. Traders will also be prevented from introducing surcharges for payment methods, such as for using credit or debit cards, above what it cost them to deliver the means of payment - a provision which will be subject to a further UK consultation later this year.
Under the Directive all EU consumers will generally be able to return goods bought online within a fortnight of receiving them in order to receive a full refund. Current laws give consumers the right to return distance-sold goods within seven days. Customer-specified or personalised products are among the goods exempt from being returned under the new provisions. Traders will generally be expected to deliver goods to consumers within 30 days of an order being placed, with consumers entitled to terminate the contract and receive a refund if the business does not deliver within an "appropriate" period of additional time.
Commercial law expert Clare Francis of Pinsent Masons, the law firm behind Out-Law.com, said that the focus of the UK Government's consultation was on those areas where the UK has "some flexibility", given the majority of the Directive was focussed on maximum harmonisation of the laws across member states.
"The implementation of the Directive will see consumer laws brought up to date but a key feature will be 'future-proofing' this to take into account future technology advances," she added. "Whilst the implementation is not a radical departure from current English law there are subtle areas that could change and increase consumer rights - the hot topic of credit card surcharges, for example, is going to be the subject of a long-awaited separate consultation to be published later this year."
The Government is also currently consulting on the introduction of a Consumer Bill of Rights, setting out clear rights for shoppers and simple, standardised remedies for when things go wrong. UK consumer law is currently laid out across 12 different Acts and sets of regulations, such as the Distance Selling Regulations and the Consumer Protection from Unfair Trading Regulations.
Editor's note 24/8/12: this story was changed to make it clear that it is the European Parliament and Council which make EU legislation, not the Commission. We are grateful to the reader who pointed this out.