STEP into most practices and it’s easy – or at least it should be – to see a merchandising area where there are ancillary products on sale to clients. Practices aren’t primarily involved in retailing, although some have an online shop, but where they do sell to clients they need to be observant of consumer law.
However, the law relating to the supply of goods and services has been getting increasingly outdated in recent years, especially with the arrival of digital content such as downloads and software.
A radical change to consumer legislation has just been implemented and there’s another in the pipeline. It is imperative that practices understand the revised requirements and act accordingly to ensure they are fully compliant.
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCR) came into force on 13th June this year. The new requirements replaced the existing legislation and quite simply will apply to any business selling to a client or consumer.
The first change relates to the provision of information. Following the introduction of CCR, more information must now be provided to clients prior to a purchase and the level of detail required depends on the method of purchase.
For in-store purchases, clients must have access to the complaints handling policy and any aftercare or guarantee information. If clients have the right to cancel, which wouldn’t apply with bespoke items (say a monogrammed dog coat) they must be provided with a cancellation form.
Alternatively, if the goods and services are being sold online, the practice must identify if it is acting on behalf of another trader and provide that trader’s contact details in addition to its own.
Implied obligation to pay
A practice must also make it clear to clients that the order implies an obligation to pay and the purchase process must ask clients to explicitly acknowledge this.
Digital content is dealt with specifically by the regulations for the first time. Information, for example, regarding the functionality of digital content and the software/hardware requirements must now be provided by the practice.
It is also important to be aware that digital content cannot be provided to clients during the cooling-off period, unless they explicitly acknowledge and consent to waive their cancellation right.
In relation to cancellation rights, the cooling-off period for clients has been extended from seven days to 14 calendar days. The cooling-off period for goods starts when the client receives the goods and if it relates to digital content and services it starts from the day on which the contract was entered into.
Practices must also be aware that if clients expressly ask for the service provision to start before the end of the cooling-off period, then they will waive their cancellation rights.
It is also important for practices to be aware that following the introduction of the regulations, if a client exercises their statutory right to a refund, then it is the responsibility of the practice to refund the price paid and the cost of the standard delivery charges.
Refunds must be made to the client within 14 days of receipt of the returned goods, or receipt of evidence that the goods have been sent back. In the case of provision of services or digital content, refunds must be made within 14 days of notice that the client wants to cancel.
Inertia selling is also covered in the legislation. In other words, clients are protected from unsolicited sales or additional charges, for example via the likes of pre-ticked boxes, which have not been agreed in advance.
The new regulations make provisions in relation to helpline charges. If a practice offers a helpline service to its clients, then they should only be charged at a basic rate.
The Consumer Rights Bill
The Consumer Contracts Regulations have far-reaching implications for practices, but it is certainly not the only change that is on the horizon. Another significant change that they must start familiarising themselves with is the Consumer Rights Bill.
This Bill is not yet law but, when in place, it will introduce new provisions which aim to ensure that clients are both better informed and protected when they buy goods, services or digital content.
Current legislation, including the Sale of Goods Act 1979 and the Unfair Contract Terms Act 1977, will be replaced with an aim of simplifying and removing inconsistencies from the current regime.
The Bill will also seek to clarify the standards a client can expect when making a purchase and the actions available if the standards are not met.
It will also provide clarity on whether terms are fair or unfair. The Bill is currently going through the parliamentary process and it is anticipated that it will become law in the second quarter of 2015.
The first relates to accurate descriptions. Goods, digital content and services must meet the descriptions given by the practice before they are sold.
For example, a Hunter wellington must be that and not a third party product. Goods and digital content must be fit for purpose and of satisfactory quality, whilst services must be provided with reasonable care and skill.
The Bill clarifies a period of 30 days for clients to reject faulty or substandard goods and to receive a full refund. This change removes the current ambiguity that exists in the current legislation which rather than providing an actual number of days, just refers to a “reasonable period of time”.
Repair or replacement
Another important change in this area relates to whether a client agrees to accept a repair or replacement. Under the new law, the practice has only one attempt to get it right, whilst under the current legislation it has an undefined number.
As with the Consumer Contracts Regulations above, the proposed Consumer Rights Bill deals with digital content for the first time. Significantly, it proposes a provision stating that the content must not harm the client’s device or any existing digital content stored. If it does, the practice by law would be obliged to repair the device and provide compensation.
There is also much-needed guidance contained within the Bill on unfair terms. The Bill proposes clarification of which contract terms can be challenged in a court so that it can decide whether or not they are fair. A useful list is provided in the draft Bill which will assist in giving clarity in this area.
Finally, from next year, businesses will receive notice of routine inspections from enforcers such as Trading Standards to allow them to make necessary arrangements.
What do practices need to do?
For a start, it is imperative that practices review their current standard terms and processes against the new requirements and ensure compliance with the Consumer Contracts Regulations.
Even though the Bill has not come into law as yet, practices should start considering the changes and planning for necessary amendments to its processes and procedures.
Where processes or procedures will need to be changed, practices should start to plan for this now.
The online experience and terms and conditions will also need to be updated to ensure the client has the right information at the right time and the business is not exposed to claims or a longer cooling-off period as information is not given at the correct time.
Training should also be completed to ensure that staff are knowledgeable of the changes.