New regulations to govern online sales, mail order and telesales come into force on 31 October. With increasing sales on the Internet, and in the area of T-commerce - sales via the television and by telephone, there has been increasing pressure to protect the consumer in all areas of e-commerce. One of the regulations includes a hotly-debated seven day ‘cooling-off’ period which gives the consumer the automatic right to cancel the order up to seven days after the goods have been delivered, and to hold on to those goods as surety until a full refund has been received. But some have seen this as an invitation to commit online fraud.

According to John Worthy, head of e-commerce at Denton Wilde Sapte, the Consumer Protection (Distance Selling) Regulations 2000 which are designed to protect consumers, will place additional pressures on e-tailers, who need to comply with the regulations or face criminal proceedings. Worthy says: “Controversy surrounded this new regime for distance selling ever since they first emerged from Brussels several years ago. Businesses were concerned about the additional compliance burdens, while consumer groups wanted to avoid the regime being watered down. E-commerce retailers are still concerned about the ‘cooling-off period’ since the consumers can insist on a refund before sending goods back. Some view this as an invitation to engage in online fraud.”

The regulations, which stem from the European Union’s Distance Selling Directive, were expected to be implemented by 4 June this year. But a deadlock between UK industry and consumer groups over the initial draft regulations was the bases for the extension - which is rare - until 31 October this year.

The Directive applies to contracts for goods and services which are concluded at a distance, including contracts made by telephone, fax, mail order and over the Internet, and retailers could be held accountable if they do not make consumers aware of their rights. The regulations do not apply to contracts for goods and/or services concluded between businesses - B2B - on the internet. And the regulations do not apply to contracts for the provision of financial services, which will be governed separately by the proposed Financial Services Distance Selling Directive, which is currently under review by the European Union.

In practical terms, the regulations mean that a trader or retailer must provide consumers with: the supplier’s name and address, a description of the goods and services, the tax-inclusive price, the delivery cost (if any), arrangements for payment, delivery and performance, cancellation rights, the duration of the price or offer, and any cost of using that means of distancecommunication.

One of the fears from the industry side was that while many dot.coms have been undertaking major website redesigns to comply with the new regulations, online sellers' administration and service will inevitably be affected, and that may in turn affect, in the worst cases, their viability. Worthy adds: “Industry is also concerned about the potential implications of failing to comply with the regulations - contracts may be unenforceable and injunctions may be used. From the consumer lobby, the claim is that the additional protection resulting from the regulations will give consumers more confidence in e-commerce, and that will in turn promote online selling. Let us hope that this is correct.” (31/10/00)

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