Consumer Rights Directive

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04 January 2012

Following 4 years of discussion and negotiation between Member States, the Consumer Rights Directive was finally adopted by the EU Council of Ministers in October 2011. It covers business to consumer sales of both goods and services and aims to simplify and harmonise existing consumer laws. This should benefit both consumers and businesses, particularly those which sell into other Member States.

The Directive grants consumers better rights to withdraw from transactions, longer return periods and prohibits surcharges on card payments and on after-sales telephone calls made to the business.

The most significant effect will be in the sphere of e-commerce. The Directive provides stringent rules on the information that must be provided to consumers prior to sale, bans the use of "pre-ticked boxes" on websites, introduces new rules on withdrawing from contracts for downloadable products and extends regulation to e-auction websites. Clear information on the compatibility and technical protections of software must also be provided prior to purchase.

Importantly, the Directive contains powerful new remedies for consumers, including the right to withhold payment in certain circumstances.

The Directive must be in force in UK law by 13 June 2014 at the latest. Interestingly, the UK Government has stated that the transposing provisions will be contained in a Consumer Rights Bill (on which consultation will begin shortly), set to be a wholesale consolidation and amendment of the 12 pieces of UK consumer legislation/regulation currently in force.

Consumer-facing businesses will therefore need to be alert to the potentially very substantial changes in the near future, particularly if those businesses conduct sales online and sell downloadable content.

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