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The online implications of new consumer rights legislation

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New consumer rights legislation comes into force today, with far-reaching implications for online traders.

The EU Consumer Rights Directive, implemented in the UK by the Consumer Contracts Regulations, brings into force changes including the extension of the cooling off period from seven to 14 days, and the obligation to make refunds within two weeks of receiving goods, including the cost of delivery.

Order buttons will have to show the consumer is entering into a contract with an obligation to pay. Instead of using terms such as ‘confirm’ and ‘buy,’ they’ll need to say ‘order with obligation to pay,’ or ‘order and pay now’.

They’ll also have to remove automatically-ticked boxes to charge for extra services, such as insurance.

“Today Europe is putting an end to consumer rip-offs online,” said vice-president Viviane Reding, the EU’s justice commissioner. “As of today every consumer in the European Union can claim his or her rights under the Consumer Rights Directive meaning: no more pre-ticked boxes when you buy a plane ticket, no more extra charges for paying with your credit card online and no more traders telling you that you can’t return a good you bought online.

“A confident consumer is the best possible news for our single market. Putting consumers in the driving seat by boosting their confidence is the cheapest stimulus package that Europe can put in place.” She said the European Commission would be checking rigorously to make sure all member states put the measures into place.

Phillip Smith, UK country manager of Trusted Shops, which operates a pan-European seal of approval for online shops, said: “The EU Consumer Rights Directive is the black swan of retail legislation.

“On the one hand, it will provide a welcome measure to safeguard consumers when ordering goods online, providing transparency and enabling people to buy with confidence. But, with changes to the order buttons, ticking of boxes, right to cancel and refunds policy, for some online retailers, this could cause a major headache.”

He added: “As a result it’s vital that retailers re-train staff and re-write their contracts in accordance with the regulations to ensure they stay on the right side of the law. Ultimately, whether a shop is based just around the corner or elsewhere in Europe, it is not important – what matters is whether people trust it and whether it is trustworthy – and this is what the legislation hopes to achieve.”

Louise Taylor, senior counsel at international law firm Taylor Wessing, said: “For most traders, there are some easy wins and clear ways to get compliant. However, there are also some grey areas which traders will either need to grapple with now or wait for further regulatory guidance. The main challenge will be striking the balance between strict compliance and maintaining the user experience for consumers, and in doing so businesses will need to be prepared to demonstrate that they are taking all reasonable steps to comply. Businesses will need to find creative solutions to minimise any interruption of consumers’ interactions with brands during sales.”

She said that the new regulations aimed to increase consumer confidence and therefore their spending. But nonetheless there would be an increase in costs to retailers as a result of the move towards compliance.

Taylor also flagged up the new category of digital content, saying it “aims to bring consumer legislation into the 21st century.” But she added: “However, at the same time, they add a layer of complexity which, whilst offering new consumer rights, may add a barrier to the instant access consumers now demand.”

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