In the EU now consumers must have a period of 14 days to change their minds and receive a full refund after buying goods or contracting services online. This replaces the previous 7 day cooling off period and extends it to more types of contracts. This is a “maximum harmonisation” measure, leaving Member States only very defined scope for deviating in any way from the protections laid down.
This stems from the 2011 EU Directive on Consumer Rights which replaced existing EU legislation on distance selling (though not other consumer legislation e.g. on guarantees or unfair contract terms) and national implementing laws had to be in effect by 13 June 2014. The UK implementing regulations neatly summarise in their title three of the main areas where changes were made: “The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013”.
The Directive applies to contracts between a “traders” (acting in their trade, business, craft or profession) and a consumer (acting outside of those areas). It sets out requirements for information to be given to consumers before making any contracts (online or offline) as well as for contracts at a distance (e.g. online or by telephone) or away from commercial premises. Other items covered include delivery and passing of risk, limiting of fees for payment methods to actual cost, and preventing the use of pre-ticked boxes for additional services and products when purchasing online.
As regards the 14 days right of withdrawal or cancellation, traders must inform consumers of this right and provide a standard withdrawal form. The consequences of failing to do so are penal – the withdrawal period can be extended to one year…
Let’s look at this in some more detail as it applies to digital business:
- expiry of the right of withdrawal: the standard is 14 days counting from receipt of the goods or in the case of services the day the contract was made.
- services: services should not automatically start during the withdrawal period; but if the services have been carried out or commenced with the consumer’s consent (acknowledging that the right of withdrawal will be lost) then the consumer has to pay for the services used.
- digital content (i.e. data streaming or downloads): there is still a right of withdrawal but, provided the consumer is made aware of this, only up until the moment that the download or streaming starts, so no additional 14 day period after delivery applies. The other side of the coin is that better advance descriptions of digital products will be required – so clear information should be given regarding their functionality (including any user tracking), technical protection measures e.g. anti-copying protection, regional coding, and known compatibility with hardware and software. Guidance issued to explain the new rules includes an optional scheme for provision of this information including suggested standardised icons.
- digital media: digital content supplied on a disk is considered as a supply of goods so the normal 14 days period applies – but if supplied sealed then up until it is unsealed after delivery (so in practice you will want to make sure it is sealed).
- online auctions: yes, the rules do apply – but only against professional sellers and not individuals not in business.
- exclusions: various sectors are not subject to the new rules, generally being subject to their own sector specific rules, including gambling (e.g. games of chance, lotteries, casino games and betting, which Member States may be at liberty to regulate more strictly); financial services; package travel; timeshares; travel services (except for the pre-contractual information, additional fees and pre-ticked boxes rules); and one-off telephone services (e.g. payphones and internet cafés). Also – logically – personalised or perishable goods can’t be returned for no reason.
- withdrawal form: traders must provide the withdrawal form but must also accept any other clear statement of cancellation sent during the cancellation period (however, the burden of proof for showing that cancellation was communicated is on the consumer).
So the main changes for digital business are: (i) clear pre-contractual, including technical, information to be provided; (ii) the 14 days period for cancellation including the standard withdrawal form (subject to exceptions referred to above), and (iii) “opt in” i.e. no pre-ticked boxes for additional payments. Refunds must be given within 14 days from cancellation and would include normal shipping charges.
At least, these rights will now be very similar in all EU Member States which may be welcome to traders and may encourage consumers to purchase online and across national borders. Time to review the website and purchase process – and those standard terms and conditions.