e-business basics - Distance Selling Regulations

Ebusinesses in the UK are subject to the same laws as similar traditional businesses, such as Consumer Protection, Health and Safety and so on. However, they have certain characteristics that have required new laws and regulations to protect themselves and their customers. This revision note concentrates on these, additional regulations.

The best businesses have always looked after their consumers. Their service shows that they have nothing to hide and want the customers’ repeat business. A good example in the high street is Marks and Spencer, who famously will always accept any item for a refund, and whilst they know this policy does result in some abuse, the peace of mind enjoyed by the majority of honest customers far outweighs any downside.

The difficulty of course with e-business is that consumers cannot see or try physical goods before they buy. This is part of the reason why certain uniform non-perishable items (books, CDs, Videos) have been early success stories on the Internet. Nevertheless, eBusinesses have thrived selling many other kinds of product and service. The best practices of the most successful and respected traders have become the standard, which have become requirements under the Distance Selling Regulations.

The Consumer Protection (Distance Selling) Regulations 2000 (Amended 2005) are based on the Directive 97/7/EC on the protection of consumers for distance contracts. The scope of the Regulations is very broad, covering both goods and services, where the contract is made without any face-to-face contact between supplier and consumer. Many businesses already use terms and conditions that meet these regulations, but all need to check that they do comply.

The purpose of the Directive is to increase consumer confidence and so strengthen the single European market by providing an agreed minimum level of consumer protection throughout the EC.

The aim of the cooling-off period is to give consumers an opportunity to examine the goods or services being offered, as they would have when buying in a shop. The right to cancel is fundamental; however this is balanced in the Regulations by the consumer's responsibility to take care of the goods before returning them.

The Directive does not apply to business-to-business transactions, although businesses purchasing goods and services incidental to their usual trade ARE covered. One example is that of a flower shop purchasing a personal computer – clearly something outside its usual trade.

If a business sells goods or services to consumers on the Internet or digital television by mail order, including catalogue shopping by phone by fax, the Consumer Protection (Distance Selling) Regulations 2000 may apply. The key features of the regulations are that the consumer must be given clear information about the goods or services offered after making a purchase the consumer must be sent confirmation consumer has a cooling-off period of 7 working days new powers for local Trading Standards Departments and the OFT.

Author: Steve Whiteley, January 2007