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Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
You may not be aware but there are some significant changes a foot regarding consumer protections in the UK. The first major change is coming from 13 June 2014 with the Consumer Contracts Regulations 2013 (Consumer Contracts Regulations).
Consumer Contracts Regulations 2013
The current protections come under the Consumer Protection (Distance Selling) Regulations 2000 (The Distance Selling Regulations). There are some significant changes to the previous distance selling regime. The Consumer Contracts Regulations will draw more transactions into the regulations protection and therefore require traders to put in place terms and conditions dealing at a distance.
Definition of consumer
Previously a consumer had to be acting for purposes outside of their business. As such any transactions in any way related to a business purpose were not covered. The Consumer Contracts Regulations change this. Now a consumer has to be acting for purposes ‘…wholly or mainly…’ outside of their business.
Whilst we do not know how the courts will interpret this wording, it has been used in previous consumer protection legislation and it has been widely interpreted. The new regulations are highly likely to cover more transactions then the current Distance Selling Regulations.
Definition of Business/Supplier/Trader
Under the Distance Selling Regulations, the definition of ‘supplier’ required a person to be acting in their commercial or professional capacity. The Consumer Contracts Regulations instead use the concept of “Trader”. This is a wider concept as not only does it relate to a person’s trade, business, craft or profession, but it also includes a concept of the person acting for another’s behalf.
Again, as a new concept, it will take time for the courts to interpret the meanings fully. What is certain is that it is much wider and of a particular risk if you regularly sell goods online as a pay now sale, as these regulations will likely apply even if you only infrequently, but regularly, sell the odd part/car personally that has been rejected from your business; your business (and you) could still be liable under the Consumer Contracts Regulations.
Under the Distance Selling Regulations consumers had a right to cancel a contract 7 days from when the consumer received both the notification in writing of their rights under the Distance Selling Regulations and when they received the goods. If the consumer was not notified of their rights in writing at the time of receiving the goods, the time limit starts from when they are notified in writing or 3 months from receipt or the goods, whichever is earlier.
The Consumer Contracts Regulations extend this period to 14 days from when the consumer received both the notification in writing of their rights under the Distance Selling Regulations, and when they received the goods. Furthermore, if there is no notification in writing of the right to cancel then the 3 month period is extended to 12 months.
Customer Help lines
An odd and wholly new aspect to these regulations is the cost of consumer assistance and help lines. We will all be familiar with the use of customer help lines, some of which incur a premium rate. Well these regulations limit a consumer’s liability to the ‘basic rate’ for any post contract help lines. Where the cost of such calls is beyond the ‘basic rate’ the consumer will automatically be able to claim these costs back directly from the trader.
If you have a consumer helpline, you need to review the call charges or risk having to gift all your customers the increased costs for such calls.
This is not a definitive guide to the Consumer Contracts Regulations and how they apply to your business. Neither does this deal with all the changes.
This is a notice that the new regulations are coming and that they will be wider and will impact on a number of aspects of the motor trade. If you currently act under the Distance Selling Regulations you need to review your terms and processes to ensure they are fully compatible with the Consumer Contracts Regulations. If you do not currently act under the Distance Selling Regulations, but sell goods and services without meeting face to face, then you need to familiarise yourself with the changes and amend your business practices accordingly.
If these regulations apply and you do not provide the correct terms and conditions, you could face having to reimburse the full costs of the goods up to 12 months from the transaction without being able to deduct any amount for postage or the use of the goods during the time.