Understanding the Distance Selling Regulations

Your online business by its nature will sell goods to its consumers at a distance. As the Internet matured as a commercial space it became apparent that the rights of anyone that buys a product or service online needed to be protected. In much the same way that consumers have rights when they buy goods or services in the high street, the Distance Selling Regulations (DSR) have been developed to duplicate that consumer protection for online shoppers.

The E-commerce regulations that the DSR forms part of, came into force in 2002. This enshrines in UK law the EU E-commerce Directive that your business must comply with. If you sell goods or services online, or via mobile phone, advertise online or via mobile phone or sell goods that can be downloaded, this legislation affects your business. If your online business also uses fax, interactive TV and traditional mail order catalogue, the Distance Selling Regulations also apply.

Generally your online business must meet a number or requirements to comply with the E-Commerce Directive that include:

• Your online business’s full address, name and other contact details must be clearly shown on your website.
• The details of any register your business is contained on, and if you are part of any body that supervises your business’s activities.
• If you have one, your VAT number must be clearly shown.

Selling goods or services via your online business will mean you form a contract with your customers. You must enable them to change any details they give during their checkout process. You must also state any code of practice your online business subscribes to.

The Distance Selling Regulations

This law has been in force since 2000 and states clearly the rights of customers who shop with your online business. Note that the legislation only applies to business selling directly to customers. Business selling to other business are exempt. The DSR regulations also don’t apply to online auctions. To comply with the main requirements of the legislation your online business must:

• Display a complete and unambiguous description of the goods or services your business is selling.
• The price of the goods including any relevant taxes must be clearly shown.
• Full delivery costs of the goods.
• Your businesses full contact details.
• Details of what kind of payment types your business accepts.
• The customers right to cancel their order.
• Provide written confirmation of an order once it has been place. This can be via email, letter or fax.
• Full details of your customers right to cancel their order in accordance with the set time limits that the legislation allows.
• Give full details if your business will send substitute goods if the ones ordered are out of stock.

You can download a detailed guide to the Distance Selling Regulations from the Office of Fair Trading website: www.oft.gov.uk/shared_oft/business_leaflets/general/oft698.pdf.

Contracts of sale

The Distance Selling Regulations are designed to protect the consumer when they shop online. As such your online business must:

• Ensure that it delivers the goods ordered in the stated time up to a maximum of 30 days unless otherwise stated.
• Provide any customer on request a full set of your online business’s trading terms and conditions.
• Full details of the transaction they have entered into with your company.
• Details of the how returns can be made.

Note that consumers under the Distance Selling Regulations have a seven working days cooling off period starting when they received their goods. They can cancel at any time during this period without having to give you a reason. You must accept the returned goods, no questions asked. If you don’t state this on your website, this cooling off period is extended to three months.

Also, your online business may have to give a full refund to a customer who is unhappy with the goods or services you have provided. Your customer can withdraw from the contract you have with them and demand a full refund that your business must pay within 30 days.

Additional Regulations

The Distance Selling Regulations cover the sale of goods or services on the Internet. Your business must also ensure it is fully compliant with the regulations below as they also impact on all online businesses:

Trade Descriptions Act 1968
Supply of Goods and Services Act 1982
The Consumer Protection Act 1987
Sale of Goods Act 1979
Control of Misleading Advertisement Regulations 1988
Unfair Terms in Consumer Contract Regulations 1999
Consumer Credit Act 1974

It is important that your online business is in full compliance with the Distance Selling Regulations before it opens its website to trade. Consumers have a raft of legislation to protect them when they shop online. It is your responsibility to ensure your new online business is operating on the right side of the law.