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Legal expert warns on new online EU laws

Legal expert warns on new online EU laws
Thursday April 3 2014

New regulations affect payment and cancellation information, pre-ticked boxes and downloadable content, but may also confound 'warbrobing' trend

A law firm is warnings retailers, merchants and any business transacting online over important changes they will have to make by 13 June 2014 in order to comply with new European Union (EU) laws.

It is on that date that the UK has to come into line with new EU-based laws on the cancellation rights of other European consumers. Put simply, consumers will now have a 14-day 'cooling off period' to replace the current seven working days. 

But if online retailers don’t make those terms clear on their website, consumers could have up to 12 months to exercise a ‘money-back’ cancellation right.

It is not just e-tailers who will be impacted by the changes: stores taking orders for ‘non day-to-day’ items (such as furniture) will have to change their paperwork too, as will car dealers and those who sell goods and services on people’s doorsteps – such as double glazing and central heating companies.

Varying levels of preparedness

“This is a potential minefield,” said Simon Bates, who heads up the commercial division of Jordans Corporate Law. “Many businesses seem unaware of the alterations they need to make, and equally we have seen plenty of examples of companies who have tried to make the changes – but not done it properly.

“It is particularly important for ‘doorstep’ sellers to comply as, in their case, they can face possible criminal prosecutions.”

He added: “This could be a bonanza time for website companies, because many retailers won’t have the access rights or technical skills to make the necessary amendments, which include everything from the terms and conditions section of the website through to the ‘order now’ button.”

There will now be a requirement to label any online order button with the words “order with obligation to pay” or similar wording. In addition, e-retailers will have to provide a standard cancellation form.

Another major change is a prohibition on practices such as the use of pre-tick boxes for payment of additional services, while the use of premium rate customer telephone helplines will also have to end.

Those selling downloads online could also be hit. The changes mean that consumers will not have a right to cancel once a download has started – provided that the retailer has informed them of this and obtained their explicit acknowledgement. However, as Bates points out, the retailer can really lose out if they fail to do this.

Refund rights affect downloads

“Once a person has downloaded an app, track or game, for instance, they could then cancel the sale and get a refund. The regulations are very explicit on this and say the customer does not have to pay,” he explained. 

A particular problem faces those selling ‘non day-to-day’ goods in shops, garages and other retail outlets. “They now have to give certain written information to customers – which is a new concept to them.

“Furthermore,” said Bates, “there is no precise definition of what a ‘day-to-day’ item is in the new regulations. In fact, it’s fair to say that the guidelines are very vague in places.”

While the new regulations represent a significant boost in consumers’ rights, the legal expert also pointed to some good news for retailers when it comes to returns: the end of ‘wardrobing’. 

“Apparently there are many people who buy clothes online, wear them once or twice and then return them,” he said. “Retailers will now have the right to reduce the refund to reflect any loss in value where goods have been used, so this might well spell the end of that particular phenomenon.

“Certainly the new regulations sound daunting. And the fact that the accompanying guidelines aren’t very detailed doesn’t help. But we are running a series of seminars around the country over the next few months to help explain the changes.”

Jordans Corporate Law is also offering an audit of websites and order acknowledgement procedures. Bates concluded: “To be honest, trying to explain in writing what changes need to be made and where can be tricky: it’s often simpler to sit with people in front of a screen and make the changes online.”

Tagged as: Online | e-commerce | website | law | legal | compliance | EU | terms | refund | guarantee | download | wardrobing | Jordans Corporate Law