Your distance selling questions answered, by Trading Standards expert, Peter Stonely

by Peter Stonely, 05/05/2020

On last weeks webinar, we were joined by Chartered Trading Institute Specialist, Peter Stonely. We opened the floor to questions for Peter and were inundated with questions around distance selling laws. It simply wasn’t possible to answer them all live on the webinar, so we caught up with Peter afterwards to get answers to the ones we weren’t able to answer live. If you’ve got any additional questions, leave a comment in the comments section at the bottom of this page.

Q: Are 14 day cooling off periods a "no quibble" period. For example, can the customer return the car for a full refund without having a reason within the 14 days?

The consumer does not have to give any reason at all.  They simply have the right to cancel.

Q: Can we use recorded phone calls with the dealer reading out terms and conditions to customers as an off-premises contract?

No, because the consumer has to receive a document in writing or, if they agree, in a durable medium.  So, if they were happy, you could email the documentation to them.  This sounds to me that it is more likely to be a distance contract.

Q: If we take the car to the customer - then the customer calls the dealership later that day and buys the car would the 14 days still stand?

It depends where the contract was agreed. If their drive became your showroom and you agreed the contract there and then (or you went back to do so) this would be an off-premises contract with the same 14-day period. 

On the other hand if you took the car back to your premises and the deal was done over the phone or by email following on from them looking at/testing the car and speaking to your representative on their drive, this would then be an on-premises contract because the contract was not agreed on their drive and it was not agreed exclusively by means of distance selling (they had met your rep and tested the car face to face).  There would then be no 14-day cancellation period. I would suggest that it would be good practice to make this clear on your documentation if this scenario applied.

I am sorry that this sounds complicated, but this is why it is so important that you are very clear about when the contract is actually made and where that happens/what has gone on before it.

Q: Regarding 14 day cooling off period and rights to cancel, what if you are selling a product which is built to order i.e. a campervan?

There is an exemption from the right to cancel for “goods made to the consumer’s specification or which are clearly personalised”.  Most standard cars/motorhomes/caravans/motorcycles may allow a consumer to choose options, but they are standard parts off the shelf. This exemption will only apply when you are producing something unique for them. The example that I normally use, when training, is showing that I can specify my new BMW online, but that is only through standard parts, and restricted options - this is not within the exemption from cancellation. On the other hand, if I have a new Morgan made for me and I can specify every detail including my own choice of paint colour which is not chosen from a list of set colours the exemption from the right to cancel would then apply. 

So with regard to a campervan, the issue is not that they are made by hand/built to order but rather whether you are supplying something absolutely unique or whether you are supply something made up from a set list of options from the manufacturer. 

Do not use this to try and get around the law, if you think your product falls within this exemption seek advice - your local trading standards may be able to help.

Q: Is it correct if you don’t mention the 14 days, the customer has the rights for 12 months?

Yes, if you do not give that information within your documentation the period is extended by another 12 months, or until 14 days after you supply the required information whichever is the shorter of the two.

Q: Why do we have to pay for the car to be collected from their house if they cancel, why can't we write in the contract that they must return the car?

In the case of a distance or off-premises contract you can write in your contract that they have to pay the return costs or require them to arrange a return at their own expense.  If you charge, make your charge reasonable and one that you can justify, do not try to use this as a barrier to cancellation.

If you have gone to their home with the car and they have agreed to buy it there and then, so the car is left with them immediately, you would have to collect at your expense.

Q: If a customer decides to cancel during the 14 days, who's responsibility is it for 1) to return the vehicle and 2) the cost of return?

See answer to the question above.

Q: In the case of a new car sold by distance selling, what would be considered a reasonable amount of costs to recover? Also does the law differentiate between a new car and a used car?

I’m not 100% sure what you mean here but my answers regarding return costs would be relevant. The regulations also give you a right to reduce your reimbursement to reflect unreasonable use - have they driven more miles than you have specified to simply test it out, or have they damaged it whilst doing so - in which case you could deduct something to reflect this.  I am sorry but, in my opinion, you cannot deduct the depreciation reflecting the new car is now used - that is the cost/risk of the distance selling model.

Q: If I don't meet the customer at all in the process, what is their cooling off period?

I assume that you mean that the whole transaction has been carried out by phone, email or online - this would be a distance contract and the period would be 14 days from the day after they get the vehicle.

Q: Is there not a 3-month period to guarantee a vehicle in good order??  So, 14 days goes out of the window?

I am not aware of any three-month period set out in the law.  Let’s be clear, and this is also the answer to the question below:

·       If you enter into a distance or off-premises contract the consumer has 14 days, after they get the vehicle, to change their mind and they don’t have to give any reason for this

·       If there is something wrong with the car, it is not as described or not fit for any purpose made known etc, you will have not met your responsibilities under the Consumer Rights Act and consumer has 30 days in which they can reject and request a full refund, you could offer a repair or replacement in this time.  If this remedies the problem, then everyone is happy, if not they keep their right to reject for the full 30 days or for 7 days after they get the car back, whichever is the longer.  After the that the Consumer Rights Act has a range of rights and remedies depending upon what has gone wrong.  See https://www.businesscompanion.info/en/quick-guides/goods/the-sale-and-supply-of-goods

Q: I’m sure if the car is damaged then that will give you a right to cancel the 14 days like buying any product?

If you mean that there is something wrong with the car, see the answer above.

Q: If the customer collects the vehicle, the deal having been agreed over the phone, is this a distance sale?

Depends when and where the contract was agreed.  Are they coming to collect the car, having already agreed a contract with you by phone (distance contract, 14 days and make sure you get your paperwork right) or are they coming in to sign the contract and collect the car, in which case this would be a normal on-premises contract with no right to cancel.

Q: Can you opt out of the distance selling regulation, by the way of putting it on your website?

No, you cannot and in the current climate where we are seeing the Competition and Markets Authority, as well as Trading Standards, clamping down on businesses who are not giving refunds during this crisis don’t make your sector a new target by ignoring consumer rights.

Q: Can we clarify the maximum mileage allowed to be driven on a car sold under distance selling regs?

Yes, you can, by including it in your terms. This should reflect what a typical test drive might be. I would suggest looking at what some of the other online sellers are doing. 

Q: If a customer was to come into the dealership, view and test drive then go away to make decision. They confirm they'd go ahead but don't want to come in again. Documents and handover are completed off premises. Where do we stand?

If the actual contract is agreed at their home, this would be off-premises, so 14 days to cancel.

If they visited your dealership, test drove and discussed the deal with staff and then agreed the contract (including signing all the paperwork) by email then this would be an on-premises contract with no right to cancel - the initial negotiations and test drive would mean that it had not been agreed exclusively by means of distance selling.

Q: Are distance selling rules different for private and business customers?

Yes, business customers do not get these rights.

Q: If you had a face to face live video conference call with the customer at home and the employee in the showroom explaining the TCF documents, order from or invoice and the deal is concluded then, is this a distance sale?

It would be a distance contract; everything has been done virtually including a virtual handshake to seal the deal.

Q: If you haven't given distance selling info to customer in delivery, can you give them now after 10 days?

A provisional yes, but if you give the correct information now, they would have a further 14 days to cancel. I would need to know more to give a definitive answer to this one.

Q: Reasons for cancellation, can it be anything?

Yes, they don’t even have to give you a reason.

Please note:

Peter has tried to give broad answers to the questions but, if you are unsure please seek advice from a lawyer, consumer law specialist or your local trading standards.

If you are selling the vehicle on finance - HP, PCP etc. - you must seek advice from your credit provider regarding the documentation that you must use and the procedures that you must follow.

The answers to your questions show how important it is to know what type of contract you have entered into and, most important of all, where and when was the actual deal to purchase the vehicle was agreed - where and when did you actually ‘shake hands on the deal’?

The table below is a very general guide to help you, based upon your sector. It is a simple interpretation of the law. For further help and support, please visit Business Companion here: https://www.businesscompanion.info/focus/car-traders-consumer-law or contact Stonely Training here: https://stonelytraining.co.uk/

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* Exhibitions are normally seen as business premises

"If you do not offer a distance selling option but you are genuinely helping a customer out who cannot get to your premises - perhaps they are needing to shield themselves during the lockdown.  Please note, that there is a real element of risk to your business here so this really must be a genuine one-off.  DO NOT SEE THIS AS A WAY OF AVOIDING THE LAW"

Disclaimer

These notes have compiled using the law in effect on 4th May 2020. They are Peter Stonely’s interpretation of the law based upon the general information provided.  Ultimately only a Court can decide the interpretation of the law.

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