New requirements for online retailers Directive 2011/83/EU on Consumer Rights (the Directive) Aim of the Directive The

new Consumer Rights Directive (the Directive) aims to strengthen consumers' rights in all 27 EU countries, particularly when shopping online. The Directive sets out a single set of core rules for B2C distance contracts (phone, post, internet) and off premises contracts (doorstep sales) so creating a level playing field and reducing transaction costs for cross border traders. Some requirements apply to any B2C sales contract. The new Directive will fully harmonise the rules and Member States cannot introduce more or less stringent provisions. In addition, it is not possible to contract out of the Directive's requirements. This will ensure a uniform level of consumer protection across the EU, and promote e-commerce in the single market. The Directive will not apply to a number of areas including financial services and package travel. Date it comes into force The Directive was published in the Official Journal on 22 November 2011. Member States must transpose the Directive by 13 December 2011 and apply the legislation from 13 June 2014. The Department for Business Innovation and Skills (BIS) announced a new Consumer Bill of Rights (to implement the Directive) on 19 September 2011. The new Bill will consolidate existing consumer rights currently found in 12 Acts or regulations together with the new Directive into one piece of legislation. BIS will consult on the new Bill in either late 2011 or early 2012. Why it is important Retailers need to be aware of the changes in the Directive which include : provision of clear and comprehensible pre contractual information to consumers in distance and off premises (doorstep) sales contracts increased price transparency total price of goods or services to be disclosed in advance if selling digital downloads, informing consumers about the functionality and relevant interoperability of digital content with hardware and software ensuring that consumers in distance contracts explicitly acknowledge the obligation to pay when placing the order. If the consumer clicks to place an order, then the order button must be labelled in an easily legible manner with wording such as "order with obligation to pay". This is intended to eliminate hidden charges and cost traps online. cooling off period for distance sales extended to 14 calendar days (from receipt of the goods) for consumers to change their minds and return goods without giving any reason or incurring any cost. This period will be increased to up to a year if cancellation information is not given at appropriate time. An easy to use standard withdrawal form has been introduced. refunding consumers who have withdrawn from a distance sales contract within 14 days (including refund of delivery costs)

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 delivery within a maximum period of 30 days and risk to pass to consumer when they take physical possession of the goods banning pre-ticked boxes on websites so consumers cannot be required to untick boxes to avoid extra services when shopping online.

Now what Retailers transacting with consumers at a distance whether online or on the phone, need to audit their website design, terms and conditions and sales processes to ensure they can comply with the new requirements when they come into force. This is all the more important given the purpose of the Directive is to encourage cross border e-commerce. If changes are required then businesses are advised to start planning these now. Retailers have shorter time periods e.g. for refunding consumers, and, if necessary, must ensure that they can speed up their systems. Retailers may also wish to respond to the forthcoming BIS Consultation on the new Consumer Rights Bill. We will be tracking the developments in this area and keep you up to date with developments.

For further information please contact : Andrew Shufflebotham, Head of Retail & Consumer, 0207 160 3049 / Andrew.shufflebotham@addleshawgoddard.com

2011 Addleshaw Goddard LLP. All rights reserved. Addleshaw Goddard LLP is a limited liability partnership registered in England and Wales (with registered number OC318149) and is regulated by the Solicitors Regulation Authority. Ref. 440721. Extracts may be copied with prior permission and provided their source is acknowledged. This document is for general information only. It is not legal advice and should not be acted or relied on as being so. It does not create a solicitor-client relationship between Addleshaw Goddard LLP and any other person. Legal advice should be taken before applying any information in this document to any facts and circumstances.

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