Office of Fair Trading
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OFT launches online distance selling resource for traders
The OFT has today launched a new online resource to help businesses comply with the law when selling goods and services at a distance - such as website or mail order sales
The Distance Selling Hub is available at www.oft.gov.uk/distanceselling and provides information for businesses about the rules and regulations that apply to the sale of certain goods and services over the internet, telephone, through interactive TV, by text or by mail order.
OFT research shows that many businesses are not fully complying with the Distance Selling Regulations (DSRs), the main law that relates to shopping from a distance, with the OFT's 2010 Drivers of Compliance report estimating that only nine per cent of business respondents considered themselves to be very familiar with the DSRs.
The DSRs give shoppers specific legal protections and different cancellation rights from those buying in store, including:
An unconditional 'cooling off' period (usually seven days) during which an order can be cancelled and a full refund received (this excludes certain items such as perishable items or personalised goods).
A full refund if the goods or services are not provided by the date agreed. If a date was not agreed, then the shopper is entitled to a refund if the goods or services are not provided within 30 days.
The OFT is urging traders to review their sales and returns policies to make sure they are lawful and the launch of the Distance Selling Hub is part of the OFT's commitment help businesses understand their legal requirements.
The Hub provides a simple at-a-glance guide to the law, detailed explanations, practical examples, and training materials developed to help businesses understand their obligations.
As part of the OFT’s focus on compliance with the regulations, it has also been working closely with major retailer Next as it updated its online terms and conditions. This has resulted in Next providing greater upfront transparency about the rights its customers have when cancelling contracts and returning goods.
Jason Freeman, Director in the OFT's Goods and Consumer Group, said:
'The growth in distance selling - in particular via the internet - is bringing great benefits to consumers and the economy, but also creates new risks.
'Businesses need to check that they are treating their customers fairly so that shoppers trust them and can continue to shop confidently. We know most traders want to comply with the rules and the development of this hub is designed to help them stay on the right side of the law.'
The Distance Selling Hub has been developed in close consultation with businesses and trade associations and follows the launch last year of the OFT Sale of Goods Act Hub. Both hubs can either be used as they are or incorporated into existing staff training programmes, making them suitable for both small and large firms.
Research conducted to help with the development for the Distance Selling Hub and outlined in the Distance Selling Hub Strategy (pdf 165kb) also investigated potential levels of consumer detriment caused by non-compliance and found:
- a significant increase in levels and frequency of online shopping - 63 per cent of all adults shopped online in past year (46 per cent in 2009) with an average annual spend of over £400
- an increase in consumers' awareness of their right to cancel if they change their mind - however the majority were unaware of the seven day limit to the right (the average perception is 15 days)
- a quarter of respondents said they had experienced a problem related to the DSRs
- where problems resulted in direct monetary loss, this was on average £5.67 per online shopper, equating to some £174million in total across Great Britain each year (note these figures are central estimates - the OFT has not attempted to quantify the sampling uncertainty around them).
Details about the OFT's SOGA Hub can be found at www.oft.gov.uk/saleofgoodsact.
The OFT's report, Consumer Law and Business Practice Drivers of Compliance and Non-Compliance report (2010) indicated that round nine per cent of business respondents considered themselves to be very familiar with the DSRs.
The OFT set out its longer term national strategy for protecting consumers online and published its e-protection strategy on 9 December 2010.
The OFT can consider any complaint received for breaches of the DSRs and has powers to apply to the courts for an injunction against any person who is considered responsible for a breach of the regulations. The OFT secured a court order against Arora Tech Limited for failing to comply with the DSRs in June 2011 (press release: OFT secures refunds for internet shoppers - 23 June 2011).