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MILS Case Study: Distance SellingBack

MILSLogo2The Consumer Contracts Regulations (Information, Cancellation and Additional Charges) 2013 (hereinafter the ‘CCR’), have been in place for over 2 years. However, there are a number of basic problems that Motor Traders are still being caught by. We therefore take this opportunity to highlight the most common issues.

Distance contracts

You need to be familiar as to when they apply.

Just because a deposit is taken over the phone does not mean that the contract is a distance contract.  Provided the consumer meets you face to face at your business premises prior to becoming legally bound to purchase either the vehicle or the service being provided then this will not be a distance contract. Consumers will not have the cancellation or information rights of a distance sale.

Face to face contact

Face to face contact is not enough to avoid the CCR requirements.

Some members are trying to get around the CCR by either delivering vehicles to customers at their home or business to inspect, or by collecting vehicles for which services are being provided. This will not work. Whilst any face to face contact will prevent there from being a distance contract, this will be an off premises contract.

Off premises contract

Any contract entered into away from the motor trader’s permanent place of business will benefit from identical information and cancellation rights as a distance contract. Moreover, if you are not careful you will not have informed the consumers of their rights.

If you have not notified the consumer of their rights they can cancel up to 12 months from the date of the contract. Further, you may not be able to make any deduction for the use of the vehicle during that time.

Conclusion

This advice should be taken as guidance only. As already stated how these affect your business will depend on how it is run. We strongly advise that you review your terms and conditions to ensure that they comply with these regulations where you enter into contracts with consumers at a distance.

Should you have any further questions please do not hesitate to contact us at the RMI Legal Advice Line.

Paul Carroll, Solicitor, Motor Industry Legal Services

Posted by Sue Robinson on 05/08/2016