Merry Christmas from the OFT…

United Kingdom

In December, the Office of Fair Trading (OFT) published new guidance to companies that sell IT goods and services on the Internet or by phone/mail order. The guidance, available on the OFT’s website, has been designed to ensure that such companies comply with the Distance Selling Regulations (DSR) and the Unfair Terms in Consumer Contracts Regulations.

The guidance sets out the obligations placed on retailers in the regulations and also the restrictions placed on the ability of retailers to force consumers to sign up to onerous terms and conditions. Of particular focus are unclear warranty and guarantee terms and other misleading terms and conditions.

A surprisingly large number of Internet retailers fail to comply with the Distance Selling Regulations, in particular by failing to allow consumers the right to return products within the 7 day period required by the Regulations. Some charge “restocking” charges and require consumers to pay the cost of returning goods without making this clear when the purchase is made. Both of these would breach the Regulations.

Usefully, the guidance suggests terms in consumer contracts which the OFT considers will fall foul of the regulations and terms which the OFT recommends that retailers use when drafting their terms and conditions. It is hoped that the guidance will prompt small and medium sized online retailers to become compliant with the regulations.

This article first appeared in our Technology Annual Review, March 2006. To view this publication, please click here to open in a new window.