Legal changes to online buying and selling | Business – in partnership with Grouptrader

Legal changes to online buying and selling

If you buy or sell online, recent changes to EU consumer protection law affect you. The Sneak’s legal expert, Eileen McKendry-Gray,  told us how.

In June 2014, a European directive introduced changes to the legal rights for consumers shopping online, which ensures all EU member states are now working to the same rules. Whether you buy or sell online, these are the changes you need to know. 

Right to cancel

Most are aware of the 7 day cooling off period when shopping online, but did you know that this has been extended to 14 days? This means consumers have longer to decide if they want to keep a product and still be entitled to a full refundif they change their mind. This applies to services as well as products.

If a business fails to provide information about the consumer’s cancellation and refund rights before the consumer pays at the check out, this increases the time the consumer has to change their mind by up to 12 months – so make sure your website terms are up-to-date. Businesses also have to provide a model cancellation form, although the consumer is not obliged to use it.

The new rules also stipulate that once the consumer cancels the order within the cooling off period, the business has 14 days from the order cancellation to refund the charges for services – or, if relevant, 14 days after receiving the goods back, although the business is entitled to hold onto the refund until they receive the returned goods.The refund must include the amount the consumer paid for delivery, although businesses can keep the amount paid in excess of standard delivery charges, if the consumer asked for special delivery – eg next day delivery.

Make it clear you are collecting payment at check-out

A consumer will not be obliged to pay for an order if it is not clear when they confirm the order, that they are making payment at that point. In practice, most online businesses use click-buttons which state ‘pay now’ at the check-out, and this appears to be sufficient.

When does the cancellation period start and finish?

It starts on the day the consumer confirms the order and the business confirms that it will fulfill the order. This means that online businesses should be clear about when they have accepted an order and so are contractually bound to deliver.

The cancellation period generally ends at the following points in time:

• For goods – 14 days after the consumer receives the goods, or the last of them if delivery takes place in stages, although different rules apply if the order is for things like subscription magazines. The clock starts ticking on the day after the consumer receives the goods.

• For services – 14 days after the date the contract is made for the supply, unless the consumer explicitly allows the business to start delivering the services earlier and acknowledges that they have lost the right to cancel in those circumstances. The right to cancel is then lost once the services start –eg the consumer consents to a download starting and then downloads the content.

There are some exclusions to the right to cancel, which we’ll deal with in a later article – watch this space!

Digital content

When it comes to purchasing digital content, online sellers will have to provide clearer information, for example about compatibility with hardware and software and whether it incorporates copy protection.

The new rules make it explicit that the consumer has to state clearly that they consent to the content being provided before the end of the cooling off period and at the same time acknowledge that they will lose their cancellation right. The online seller then has to acknowledge this in the order confirmation. If these steps are not taken, the consumer can download the content and then not be obliged to pay for it, so it is worth getting this procedure right! We think that most customers would consent to early delivery and waive their right to cancel.

Helpline charges

Previously, helpline phone numbers could be found with a variety of rates from basic to premium, but now, they can only be charged at a basic rate. If a trader uses premium telephone lines, they have to repay the customer call charges over the cost of a call at the basic rate.

What should online businesses do?

Carrying out an audit of internal sales processes and website terms is a good place to start. Sometimes, all that is required is a tweak to internal processes, for example ensuring order processing and confirmation is compliant. Obviously, those businesses, who previously relied on the 7-day cooling off period, will need to update their terms of business in addition to carrying out any potential tweaks to the sales process. One thing is certain – doing nothing is not an option.

Business – in partnership with Grouptrader