The Competition and Markets Authority (CMA) has published its findings from research into businesses’ behaviours regarding unfair terms in contracts with consumers. The research shows that 54% of the UK businesses surveyed do not fully understand the rules on unfair terms, which directly impacts how they treat their customers. In response, the CMA has launched a series of guides to inform businesses on what makes a term unfair.
The guidance assists businesses with understanding what makes terms and notices unfair, what risks they can face from using unfair wording and top tips on how to ensure terms and notices are fair and clear.
There are 3 levels of guidance – short (2 pages), expanded (28 pages) and full (144 pages), so that different users can access what is most appropriate to their needs. It includes an at-a-glance flowchart explaining how to apply the law on unfair contract terms.
The guidance identifies key things that businesses should do to ensure that they communicate clearly with consumers and avoid disputes arising from unfair terms. Alongside specific advice such as avoiding using legal jargon in contracts, the guide urges businesses to deal ‘openly and fairly’ with consumers and not to use terms you ‘would not like to sign up to yourself’.
There is a significant investment in trading online so it’s prudent to make efficient sales to maximise the return on investment.
Your terms of business are crucially important. This means they need to be clear, enforceable and don’t leave room for things to come back to bite you.
There are legal requirements including:
- information you need to put on your website;
- consumer protection legislation (if you are selling to non-business customers);
- industry specific requirements; and
- data protection and privacy considerations.
It is also worth remembering that scrutinising a website is easy for regulators such as:
- Local Authority Regulatory Services (Environmental Health, Trading Standards and Licensing);
- The Competition and Markets Authority;
- The Advertising Standards Authority; and
- The Information Commissioners Office.
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The 5p plastic bag charge: All you need to know – http://www.bbc.co.uk/news/uk-34346309
The UK’s consumer protection and competition authority, the CMA, is going to look at the way businesses use online reviews and endorsements after concerns were raised about their “trustworthiness” and “impartiality”.
It will include those on web blogs, video blogs, social media, specialist review sites, trusted trader sites, retail platforms, and retailers’ own websites.
The roles that media companies, online reputation managers and search engine optimisers play in helping businesses to promote their products/services and manage their reputations in relation to these sites, will be included.
A spokesperson said “While the growth in the use of online reviews and endorsements has the potential to empower consumers to make more informed purchasing decisions, businesses can benefit too. Recommendations from reviews or bloggers can pull in new customers, feedback from consumers can help suppliers to improve customer services, and blogs and social media provide new opportunities to advertise and promote products and services. Conversely, false or misleading reviews or endorsements have the potential to mislead consumers and harm businesses.”
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013
These rules are relevant for any business that sells goods, services or digital content to a consumer, i.e. an individual acting for purposes which are wholly or mainly outside their trade, business, craft or profession.
They apply to all sales including those made from a retail premises, those made at a distance (e.g. on-line) and those made away from trade premises.
On Friday 13th June, the distance selling regulations 2000 and off-premises (doorstep) regulations 2008 are revoked and these regulations apply instead to consumer contracts.
They specify the information which must be given before and after making a sale and how it should be given.
- Certain specified information must be given to consumers and includes for example on what systems or hardware digital content will work with.
- Schedule 1 lists the information to be provided for on-premises contracts
- Schedule 2 lists the information to be provided for distance and off-premises contracts
- Where cancellation rights exist, all distance and off-premises sellers covered by the regulations will need to provide the cancellation form set out in the regulations
- The on-line trader will need to make absolutely clear, through for instance a labelled ‘pay now’ button, where there is an obligation to pay
They give consumers the right to change their mind when buying at a distance or off-trade premises. This does not change the rules when goods received are faulty, not fit for purpose or not as described. Where this is the case consumers have different rights which are covered by separate legislation.
- Cancellation rights apply to off-premises and distance contracts only. The cancellation period is 14 calendar days.
- Consumers should return items within 14 days of cancellation
- On-line and other distance or off-premises traders can withhold refunds until goods are returned (or evidence of return is provided) and they can reduce the amount of money refunded for goods returned which show evidence of use beyond the handling necessary to see whether the goods are as expected.
- You must make the refund within 14 days of cancellation of a service contract or receipt of goods (or of evidence of the consumer returning them).
- Where the consumer cancels a contract, any ancillary contract (such as a warranty or credit agreement) is automatically cancelled.
They set out rules on delivery times and passing of risk.
- Unless the trader and consumer agree otherwise, delivery of goods should be without undue delay and within 30 days.
- Risk passes from the trader to the consumer when the goods are delivered unless the courier is one not offered or named by the trader as an option, but chosen and arranged by the consumer. In this case risk passes to the consumer when the item is delivered to the courier.
There are prohibitions on additional payments appearing as a default option and on having to pay more than the basic rate for post-contract helplines.
- You will need the active consent of the consumer for all payments – pre-ticked boxes for additional payments are not permitted.
- Consumers will not be liable for any costs which they have not been told about, pre-contract.
- Where you offer a telephone helpline for consumers to contact you about something they have bought, there should be a number available on which the consumer can call for this purpose at no more than the basic rate.
If you need any help All You Have To Do Is Ask, alternatively a “Crab Sheet” containing detailed guidance plus information check lists and model forms is available from Crimson Crab. Reputation Academy Members can obtain a free copy.