Distance Selling ( Jersey ) Law 200-
Report
- Introduction
The Economic Development Minister is progressing the consumer protection strategy, based on the recommendations contained in the former Industries Committee’s 2001 “Review of Consumer Protection in Jersey”. The introduction of the Distance Selling (Jersey) Law will create a minimum level of protection for consumers who purchase goods and some services using a means of distance communication such as the internet or mail order. Perhaps more importantly, it will help protect the international reputation of Jersey as a place with a well regulated fulfilment industry from which consumers can be confident they will be treated fairly.
The need for distance selling legislation has been driven by the popularity of the internet and the explosive growth of online retailing. Distance sellers in the European Union must comply with Directive 97/7/EC which protects consumers entering into distance contracts. The draft Distance Selling (Jersey) Law reflects the aims of this Directive and it removes the risk of the Island acquiring a reputation for disregarding accepted levels of protection for consumers.
- Consultation
In June 2003 a consultation was carried out into the proposed legislation which was particularly targeted at the fulfilment industry. The vast majority of responses were in favour of legislation and some of the more established businesses indicated that they had to be compliant in order to compete with UK based internet traders. It was also pointed out that it would create a level playing field if all Jersey internet traders were obliged to comply with the Distance Selling (Jersey) Law.
- Distance contracts
The example of a means of distance communication that most readily springs to mind is the internet. Other examples include telephone sales, mail order from catalogues, newspapers and magazines and recently, offering goods via television shopping channels. The common aspect to all of these transactions is that there is no simultaneous physical presence of the parties involved. This type of buying allows consumers to view goods at their leisure, at a time of their choosing and in the comfort of their own homes. The Law recognises that shopping at a distance has obvious disadvantages. For example, what happens if the goods do not turn up, do not fit or there is a change of mind once the consumer has had an opportunity to examine the goods? To overcome these disadvantages, allowance is made for a short cancellation period for most good and services. The Law also ensures that buyers are given clear information about the identity of the seller, details of the order as well as protection against credit card fraud and demands for payment for unsolicited goods.
- Distance contracts exempt and partially exempt from the Law
The Law will apply to contracts concluded for the sale of most types of goods and services, except the following:-
The sale of any interest in land
Financial services
Goods bought at auctions
Goods bought from a vending machine.
Goods bought using a public payphone.
Also, the Law only applies when dealing with a trader who is organised to conclude contracts without face to face contact with consumers. For example, a consumer seeing goods displayed in a shop window who later orders them from the shop by telephone will not be covered as this will not be considered to be buying at a distance for the purposes of the Law.
The Law applies only in part to the following:
Timeshare agreements.
Contracts for the supply of food or drink for everyday consumption.
Contracts for accommodation, transport, catering or leisure facilities for a specific time or date.
Package deals sold or offered for sale in EU member states.
- The right to clear information
Traders will be required to ensure that certain relevant information is provided to potential customers to enable them to make an informed choice about whether to purchase the goods or services on offer. The following is the minimum information prescribed:-
The name of the trader along with the postal address if payment is required in advance
An accurate description of the goods or services.
The price, along with any taxes and delivery charges, if any, and how long the price or offer remains valid if limited.
Delivery arrangements.
Payment arrangements.
The existence of a right to cancel the order, if applicable.
Information about who is responsible for the cost of returning goods if the right to cancel is exercised.
For services provided over a period of time, for example a mobile phone contract, information about the minimum duration of that contract must be given.
If a trader contacts a consumer by telephone, his/her identity and the commercial purpose of the call should be given at the beginning of the conversation.
- Information required after the conclusion of the contract
Once a consumer has made a decision to purchase and advanced through the ordering process, the trader must provide the following information after the conclusion of the contract –
Written confirmation of the order (letter, fax or e-mail)
Written information on how to cancel, a contact postal address and details of any guarantees, warranties or after-sales services, if applicable.
Details of how and when to end a contract if there is no specified finish date, or if the contract lasts for longer than a year (e.g. internet service providers)
Information on how the right to cancel a contract for the provision of a service can be affected if it is agreed to commence the service before the end of the seven working day cancellation period.
This information should be sent to the consumer by the time the goods are delivered, or, in the case of a service, before or soon after the time a service starts.
- The Consumer’s right to cancel, or the 'Cooling Off' period
The Distance Selling Law gives a consumer the right to change his or her mind for any reason and cancel an order within seven working days.(conditions apply to some goods, for example CDs or DVDs - see 10 below). This is a major statutory provision which does not exist in contracts concluded by face to face dealings with traders. If a consumer does decide to cancel, this must be put in writing, either by letter, fax or email. A telephone call is not an acceptable means of communicating cancellation, unless this was previously agreed between trader and consumer. The time limits are as follows:
Goods: Seven working days after the day on which the goods are received;
Services: Seven working days after the day on which the consumer agreed to go ahead with the contract.
If the trader has not provided the required information about the right to cancel and return the goods, but does so within three months, the cooling off period may be extended for seven working days after the information is received. If the trader has not provided the required information about the right to cancel a service, but does so within three months, the cooling off period may also be extended for seven working days after the information is received. If the consumer agrees with the trader that the service contract can start before the expiry of seven working days, the trader must give the required information before the service is performed.
- Buyer’s Duty to Take Care of Goods
If a consumer decides to exercise the right to return goods purchased, he or she must take care of goods whilst in their possession and reasonable steps must be taken to ensure that the trader receives them back in reasonable time and that they are not damaged in transit. If the goods are not adequately packaged, are incorrectly addressed or do not carry the correct postage, and become damaged as a result, the trader may have a claim against the consumer. The trader is entitled to stipulate in their terms and conditions that the buyer must pay postage and packing if they exercise their right to cancel. However, in the case of goods which are found to be defective, the consumer does not have to bear the cost of return.
Where a buyer has decided to exercise the right to cancel within the statutory time period, the trader is obliged to refund the price paid within a period of 30 days. Where the trader has arranged a credit or hire purchase agreement, this should be cancelled automatically and any deposits paid must be returned.
- Performance of the contract
Unless otherwise agreed, the trader should supply goods or perform a service within 30 days from the day after the day a consumer places an order. An exception to this is when goods are out of stock or services are not available. In these circumstances the trader is obliged to inform the consumer as soon as possible and reimburse any payment. However, the trader may, subject to fulfilling the necessary requirements on giving information, supply substitute goods and services provided the consumer is in agreement.
- Exceptions to the Right to Cancel
The requirements for a trader to provide pre-contractual information, written and additional information, the right to cancel and the obligation to carry out the contract within 30 days will not apply to the following types of contract:-
Goods made to personal requirements or specifications (e.g. specially made furniture).
Goods which will deteriorate quickly, such as fresh flowers or fresh food.
Sealed audio or video recordings, or computer software, which has been opened.
Betting, gaming or lottery services.
Purchase of newspapers, periodicals or magazines.
The supply of goods or services where the price depends on financial market fluctuations out of the control of the trader.
However, if any goods supplied to a consumer turn out to be faulty or defective then the trader will nevertheless be obliged to refund money paid for those faulty goods or, if the consumer agrees, supply replacement goods.
- Protection for credit card holders
Many distance contracts are concluded with the use of a credit card. If a consumer’s credit card is used fraudulently or dishonestly (without the card holder’s knowledge) for any kind of distance purchase, the payment may be cancelled and the card issuer is liable to provide a refund. In the event of any dispute over authorisation, it is for the card issuer to prove that any disputed transaction was in fact authorised by the card holder.
- Unsolicited goods and services
There are still occasionally instances of unsolicited goods being sent to consumers and subsequent demands for payment made. Unsolicited goods are those which have been sent 'out of the blue' and which have not been ordered. The Distance Selling Law provides that a consumer can treat such goods as an unconditional gift. If a trader demands payment without reasonable cause to believe he is entitled to such payment or threatens legal action then he commits a criminal offence and, on conviction, will be liable to a fine.
- Enforcement
Apart from the provisions for unsolicited goods, the Distance Selling (Jersey) Law has for the first time in Jersey consumer protection legislation introduced an enforcement framework which does not use the criminal courts as the ultimate sanction against non-compliant traders. Instead, it follows a growing trend seen in other jurisdictions to use injunctive action through the civil court process as a last resort. In practise, Trading Standards Officers will work with traders to enable them to achieve compliance and only when this process has been exhausted will a trader be reported to the Attorney General for possible injunctive action through the Royal Court.
- Financial and Manpower Implications
There are no financial or manpower implications for the States arising from this draft Law.
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gov.je