OFT Warning to Online Retailers

October 11, 2012

The OFT has written to 62 of the top online retailers after a sweep of 156 web sites found signs that many may not be fully complying with consumer protection law. The sweep looked for potential breaches of the Distance Selling Regulations and other consumer protection laws.

Key areas of concern that the OFT has raised with retailers include:

  • 33% of sites that provided information on cancellation appeared to impose unreasonable restrictions on customers’ rights to a refund – most common was requiring that the product must be in the original packaging or in the original condition, which can infringe on consumers’ rights to reasonably inspect/ assess the product
  • 60% provided a web contact form rather than an e-mail contact address, as required by the E-Commerce Regulations – 2% provided no electronic contact details at all
  • while 60% of sites indicated upfront that compulsory charges would be added to the first price shown, 24% of these sites went on to add further unexpected charges at the check-out.

However, the sweep also found that the majority of sites were compliant with the DSRs in providing other required information to the consumer. For example, 99% of sites provided details on when the goods would be delivered or the service would start and 95% provided a full geographical address when payment was required in advance.

Traders that do not make amendments to comply with the law risk formal enforcement action from the OFT or Local Trading Standards Services.

To support compliance with the regulations the OFT has created a web-based guidance tool for businesses, the Distance Selling Hub, which includes tips to resolve the key issues identified in the sweep. Top tips include being clear and open about cancellation rights and providing a full refund plus a refund of delivery charges when things go wrong.

The OFT has also produced a short video to help consumers understand their rights when they are shopping online. The video, ‘Buying online: know your consumer rights’ is available on YouTube.

Cavendish Elithorn, Senior Director of the Goods and Consumer Group at OFT, said:

‘The OFT recognises that most businesses want to play fair with their customers and to comply with the law. We encourage all online retailers to check their web sites so customers can be confident their rights are being respected when they shop online. Businesses can find more information on our online Distance Selling Hub.’

The OFT has not formally considered whether those subject to the sweep have breached the DSRs. Under the DSRs, enforcers can apply for a court injunction to stop breaches.

The web sweep was conducted by BDRC Continental on behalf of the OFT and looked at the web sites of a 156 online retailers. 80% of the items reviewed were described as goods, and 20% were services.