IP, Technology & Data

The Office of Fair Trading (OFT) has recently published the results of its annual survey of over 150 websites to check whether or not they complied with consumer protection law.

The survey, which included the 100 top online retailers and most popular clothing sites, had some interesting results.

Key areas of non-compliance
Amongst the areas of concern, the OFT noted the following:

  • 33% of sites that provided information on returns placed unreasonable restrictions on consumers. For example, by only accepting returns in their original packaging.
    The law – under the Consumer Protection (Distance Selling) Regulations (which apply to most contracts “concluded at distance – for example, over the Web or by phone/mail order) consumers have the right to inspect the goods that they have purchased and have a seven working day ‘cooling off period’ in which they can return the goods, though there are some exceptions to this, such as where the goods are perishable or customised. If goods need to be returned in their original packaging, un-opened, then it is difficult for consumers to inspect the goods to check if they are fit for purpose. It’s also important that the return period runs from the correct date, and isn’t subject to other unreasonable conditions.
  • 62% of sites had no email contact address.
    The law – the E-Commerce Regulations set out certain information that websites should contain, such as the registered or principal office of the organisation, its VAT number, if UK VAT registered, and a contact email address.
  • 24% of websites notified consumers of unexpected additional charges at checkout.
    The law – The reach of the Advertising Standards Agency (ASA)’s remit now extends to advertising and promotions on an organisation’s own website. One of the main consequences of this is that pricing information should comply with the ASA’s CAP code – in particular, pricing should be transparent and not misleading. Websites should display total prices payable – if you can’t opt out of a charge then it’s not additional. Similarly, if most of the customers of a website pay VAT then prices displayed should be VAT-inclusive.
  • Website health check
    The survey did show that the general awareness by website operators of their basic legal obligations in relation to trading online is improving.
    However, while the survey is a useful indicator of compliance with certain aspects of the law, it focussed only on the “fair trading” aspects of consumer protection law. It doesn’t look into some other key areas of legal compliance – for example what organisations do with the personal information of their customers.

Fair trading rules are just one aspect of a wider matrix of rules applying to trading online. The problem is that there are a lot of different aspects to website compliance and these will vary depending on whether or not the site is a trading website or whether it deals with consumers rather than businesses. Knowing exactly what is required can be complicated.

Brodies can help by carrying out a health check of your website, to audit its compliance with the key legal requirements and recommend changes that you should make to comply with the applicable laws. If you are interested in this, please get in touch.

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Martin Sloan

Partner at Brodies LLP
Martin is a partner in Brodies Technology, Information and Outsourcing group and has wide experience of advising clients on technology procurement and IT and business process outsourcing projects. Martin also advises on data protection (including the GDPR), and general technology and intellectual property law, and has a particular interest in the laws applying to social media and new technology such as mobile apps, contactless/mobile payments, and smart metering.
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