The Consumer Rights Directive

The Consumer Rights Directive comes into force in the UK today (13 June 2014), with the aim of strengthening consumer rights in circumstances where contracts are made away from a business' premises. The Directive is part of an ongoing drive within the EU to strengthen the rights of consumers and the UK will see further legislative changes coming into effect in the coming months, to include the Consumer Protection (Amendment) Regulations, which will be implemented in October 2014, and the new Consumer Rights Bill, due to take effect in Autumn 2015.

The key points to note in the new Directive are as follows:

Increased price transparency - Businesses are required to set out the total cost of a product or service, including any extra fees or charges. The penalty for failing to inform consumers of these charges will be that the consumer will not have to pay them.

Increase in the cooling-off period - The period under which consumers will be able to withdraw from a sales contract is extended from 7 days to 14 calendar days. The withdrawal period will start at the point the consumer receives the goods, rather than at the time at which the contract is concluded. There will also be extra protection in circumstances where a business has not informed the consumer about the withdrawal right.

This rule will apply to all distance transactions including internet, phone and mail order sales, and also to doorstep sales.

Improved rights to a refund - Whereas businesses currently have up to 30 days to provide a refund, the Directive reduces the refund period so that businesses must now provide a refund within 14 days of a consumer's withdrawal from the contract.

Ban on pre-ticked boxes - Where additional services are being offered by businesses through so-called "pre-ticked" boxes, consumers are usually required to un-tick the boxes if they do not want to buy the extra services. Under the new Directive, consumers will have to actively opt in or tick the box, and pre-ticked boxes will be banned.

Surcharges for the use of credit cards and hotlines - Businesses will no longer be able to charge consumers more for paying by credit card than the actual cost to the business in offering that method of payment. The Directive also requires businesses to switch to lower cost "basic rate" telephone numbers for consumer enquiries, rather than charging excessive rates for consumer hotlines.

Businesses should now undertake a review of their current procedures in view of the content of the Directive so as not to fall foul of the new rules. We will continue to keep our clients informed as the legislation develops.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.