Right to cancel, changes to consumer rights

Posted 09/04/2014

If your business sells goods or services away from its usual business premises or if you sell via the telephone or internet then, from 13 June, you need to be aware of the following:

• Consumers will now get a 14 day period (rather than the current 7 days) to cancel the contract without needing to give a reason. This is often known as the ‘cooling off’ period and starts to run from the day after the goods are received or the service contract is entered into. If you are providing services to a consumer which are to begin within the cooling off period, you will need to gain their explicit written consent to this and advise them that if they cancel the contract within the cooling off period, they will need to pay for any services already delivered.

• The consumer’s right to cancel a contract during the cooling off period also extends to any ancillary contracts they have entered into. This means that any agreement (such as a warranty, insurance or credit agreement) provided or arranged by you will be automatically cancelled and it is your responsibility to contact any relevant third party provider to make them aware of the cancellation.

• If a consumer does decide to cancel a contract during the cooling off period, it is his/her responsibility to return the goods within 14 days of cancellation and you are not obliged to issue a refund until you have received the goods, or have evidence that the goods have been sent. Once you have this, you should issue a refund within 14 days. If the contract was for services, you should refund the consumer within 14 days of cancellation. If goods were delivered to the consumer, he/she will only be entitled to a refund for the cheapest standard delivery option. If the goods are capable of being returned to you by post, it will only be the consumer’s responsibility to pay the postage costs if you made them aware of this when the contract was entered into.

• Remember, a consumer is allowed to remove packaging to enable them to inspect the goods to the same extent as they would be able to in a shop. However, you are entitled to deduct from the consumer’s refund any evidence of use or the removal of additional packaging that did not need to be removed.

None of the above affects a consumer’s right to return goods that are faulty or not of satisfactory quality.

In light of the forthcoming changes, it may now be an appropriate time for many businesses to dust-off their existing terms and conditions of sale, ensuring that they are adequately protected and not operating outside of the law.

For advice on changes to consumer rights and how this will affect your business, please contact Ashtons Legal’s Corporate & Commercial team.