Consumer Rights Directive gives advantages to online shoppers

By Marianne Curphey

New regulations give added protections to online shoppers, in accordance with a European Union directive.

Before June 2014, if you shopped online, you had only a week to return the merchandise, and retailers had 30 days to give you a refund -- money you might sorely miss after paying high credit card transaction fees. consumer_rights_directive

Now, however, the Consumer Rights Directive is in place. In addition to addressing refund policies, the new rules also address how retailers inform consumers about fees.

Who is affected by the directive?
The directive applies across the European Union. Though micro-businesses (those with few employees) were formerly exempt from regulations, they, too, fall under the directive rules. However, some contracts are excluded, including financial services, package travel and gambling sites.

Why did the government implement the directive?
The European Parliament was concerned that different consumer rights in different countries were hampering fair trade and the flow of goods online.

It was also concerned that retailers were ripping off customers who used credit cards to buy tickets online, particularly for music concerts and airline flights.

"This is a significant piece of legislation, particularly because online activity and purchases are growing so significantly," says Bev Budsworth, managing director of the Debt Advisor.

What are shoppers' new rights?
"The Consumer Rights Directive will give people greater protection against rogue traders," Richard Lloyd, executive director at Which?, said in a statement.

The "cooling off" period -- the time you are allowed to return goods -- is now 14 days, compared to the previous seven days. Also, retailers must issue you a refund in 14 days if you decide to return or cancel your order. Before, you had to wait up to 30 days for a refund.

And, for the first time, the cooling off period applies to media (books, film and music), too. Before the directive, your media would download as soon as you bought it. Now, you have 14 days to cancel your purchase, as long as you haven't started the download yet.

Finally, retailers must tell you in advance if you must pay for the cost of returning goods, and an estimate of how much that cost might be.

What are the new rules on fees?
Retailers cannot charge card fees that are more than the actual cost of processing a card, and they won't be able to charge expensive call rates for helplines. Retailers must also disclose all information, including total costs, in writing; consumers must consent to any additional payments (which means boxes authorising additional payments cannot be checked for you).

"Retailers and traders now have to make it clear if there are any extra charges, and there is an onus to check and recheck that consumers understand the full terms and conditions attached when they are buying goods or services," says Budsworth

The government implemented a surcharge ban in April 2013 that prevented retailers from imposing high fees for credit and debit card transactions. The ban was to prepare for the new directive, which, despite only recently coming into action, passed legislation in 2011.

The changes give greater transparency to consumers and ensure consumers are protected from excessive charges and hidden costs, as well as enable them to better compare the prices online, said Richard Koch, head of the Card Payments Policy Unit at the UK Cards Association, in a statement.

"It is great to see that governments are increasingly on the side of the consumer," says Budsworth.

See related: More Brits shopping online, but still wary, Section 75 and what it can do for you

Published: 24 June 2014