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Selling online? Distance Selling Regulations explained…

Jan 6th 2011

The minute you stop dealing with your customers “face to face”, you may well be involved in “Distance Selling”, which brings with it an obligation to comply with a whole raft of regulations! We explain the basics...

Forget what politicians say about the seeds of economic recovery. For those of you working at “the coal face”, you know that business is tough. Margins are being squeezed and markets are shrinking. What to do?

For some the answer is simple.” I have a website; I have goods and services to sell. Why not start selling them over the internet?” We all know that the web can be a great tool with potential for sales to customers all over the U.K. and beyond. It seems such a simple and obvious solution!

However, the minute you stop dealing with your customers “face to face”, you may well be involved in “Distance Selling”, which brings with it an obligation to comply with a whole raft of regulations!

The reasoning behind these regulations is to give consumers confidence to buy goods and services where there is no “face to face” contact with the seller as well as ensuring that all traders meet certain business requirements.

The main, but by no means only, regulations are The Consumer Protection (Distance Selling) Regulations 2000. These relate to sales to consumers using what are referred to as “organised distance sale or service provisions schemes” via, for example, the internet, text messaging, fax or phone calls. Quite unhelpfully, the phrase is not defined and the Office of Fair Trading says that each case must be considered on its merits.

The basic advanced information that you give must include details about:
• Your business
• The goods or services you are selling
• Your payment arrangements
• Your delivery arrangements
• Consumers rights to cancel orders

In addition to the above, the regulations stipulate that you must give customers certain information before they agree to buy anything from you. These include matters such as the price of goods or services, delivery costs and detailed information about your customer’s rights to cancel. This is by no means an exhaustive list of the regulations but a mere flavour of what is required of you.

The detailed terms of business you decide upon will obviously be specific to you particular business and, to a limited extent, you are free to set out your own terms provided they comply with the relevant regulations.. However, special care needs to be taken when, for example, dealing with cancellation rights where the regulations are very prescriptive and give consumers far greater rights than were they to purchase goods in a shop.

There are limited exceptions to these regulations, for example, where you are supplying goods or services to other businesses on a B2B basis.

The simple answer is that if you are an existing “distance seller”, or are seriously considering it, you should be talking to your own solicitor or trade organisation to ensure that you are operating within the regulations. Putting a positive spin on the issue, it is always preferable to clearly set out terms and conditions which can be referred to in the event of a dispute with a customer.

If you trade outside of the U.K. then matters are even more complicated as there are EU regulations as well as the possibility of country specific ones which may be relevant to your business

The current view of the Office of Fair Trading is that any enforcement action will be proportionate and that businesses will be given a reasonable opportunity to put matters right before they take court action. Having said that, it is far better to be pro-active and take the time to comply with the regulations in an orderly way rather than wait to be forced into action.

Once your procedures are in place, contact your web designer to ensure that they are included in your website then sit back and, hopefully, wait for those orders to roll in.!

Source: Brian Scott at Max Montague Limited