There is an ever increasing need for an online presence for all businesses large or small. Utilised correctly, a company website can drive the brand of a business, offer 24 hour access for customers and act as a forum to advertise and trade.
In this modern age you don’t need to be a computer whiz to create a fully functioning company website. At the click of a button there is an abundance of low cost, online website builders which are both user-friendly and cheap.
Whether creating a website or operating one which is already up and running, businesses must ensure that the website complies with a number of UK and European laws which are specifically aimed at protecting consumers. These laws govern what information must be supplied about a business, its complaints procedures and consumer rights. This article provides an overview of the main legal obligations for UK website operators.
The law distinguishes between two distinct types of websites: those which simply advertise services and provide information and those which actively trade and conclude sales online.
Information to be supplied by all website operators
Regardless of whether or not goods and services are sold, all websites must include the following information:
| 1 | Name and address of the service provider. Where a trader is acting on behalf of another trader, the address details of the second trader must also be provided. |
| 2 | Contact details (including an email address) which are sufficient to allow the customer to make ‘direct and effective’ communication with the service provider. An enquiry form is a good way of demonstrating that direct and effective communication is achieved. |
| 3 | If the business is a corporate entity, the registered name, number and details of the registered office must be supplied. |
| 4 | If the company is a Community Interest Company or an Investment Company then this must be explicitly stated. |
| 5 | Where a business undertakes an activity that is subject to VAT, a registration number must be provided. |
| 6 | If a company has entered receivership, administration, liquidation or winding-up it must be made clear on the website and a statement detailing any appointments must be provided. |
| 7 | Where the service provider is a member of a regulated profession, such as a doctor or a vet, details of their professional title, regulatory body and reference to the specific rules applicable to them. |
Information to be supplied by trading websites to consumers
The legal obligations placed on website operators that sell goods and services to consumers are much higher than those which simply provide information. A ‘consumer’ is any person who is acting outside of their trade, business or profession. Consequently, business users do not benefit from the same protection.
Online shopping is big business and figures published earlier this year by the Centre for Retail Research predict that UK consumers will spend on average £1,174 online in 2015, which will make them the most frequent online shoppers in Europe. It follows that consumer rights law has developed to ensure that customers are not disadvantaged for choosing to shop online and e-commerce is not stifled due to lack of trust.
In addition to the information outlined above, the following must also be included where the website is used for the purchase of goods, services and digital content:
Pre contract Information for consumers
| 1 | A description of the main characteristics of the goods or services must be provided. The level of detail depends upon the complexity of the product. |
| 2 | The total price and how it is calculated (inclusive of taxes) must be provided along with delivery charges and any additional costs. Failure to include this information will result in the consumer not having to pay these charges. |
| 3 | The customer must be provided with information about their right to cancel. Most contracts concluded online allow consumers the right to cancel within 14 days. There are some exceptions to the rule, such as websites which provide financial services, package holidays and gambling. The Government has published model instructions which can be used by website operators and meet all the legal requirements. |
| 4 | Where the consumer is purchasing a subscription, the total cost per billing period or the total monthly cost must be provided. |
| 5 | Communication costs which are not ‘basic rate’ must be drawn to the customer’s attention, including premium rate telephone numbers. |
| 6 | Details of how payment will be taken must be provided, particularly if payment is made via the customer’s phone bill. |
| 7 | Estimated delivery time and options available to the customer for enhanced delivery. |
| 8 | The service provider’s complaints handling policy. |
| 9 | Details must be provided of when there is no right to cancel or the circumstances in which it can be lost. For example, if the consumer requests the supply of services before expiry of the cancellation period. |
| 10 | Reminder of the trader’s legal duty to ensure that the goods match their description. |
| 11 | Details must be provided of the duration of the contract and conditions for terminating the contract. |
Information to be provided to consumers before the contract is finalised
Before a potential customer completes their purchase, the following information must be provided in a clear, comprehensible way:
| 1 | The steps the customer must follow to complete the purchase, including details of how they can review their order to identify and correct any input errors. |
| 2 | Whether the provider will file the electronic contract and if so, whether it will be accessible to the customer. |
| 3 | The languages offered for the conclusion of the online contract. |
Modern Slavery Act 2015
Businesses with an annual turnover of £36 million or more will soon be required to publish an anti-slavery statement explaining what steps they have taken to ensure that slavery is not taking place in any part of the business or supply chain.
Commercial organisations with a financial year that ends before 31 March 2016 do not have to make a statement in respect of that financial year. It covers all organisations which do some business in the UK and therefore will catch international groups of companies, even if the UK turnover is much smaller.
Criminal sanction for failure to comply
Failure to provide basic company information without reasonable excuse, such as the
company’s name, registered number and registered office is a criminal offence. Every director in default is liable to conviction, a fine and a criminal record. In addition, the company may also be fined and continued contravention may result in a supplementary ‘daily default’ fine.
Particular care must be taken by group companies as the requirements will not be met by simply including parent company information on a subsidiary’s website. Instead, it is the subsidiary’s information which is required.
Breach of Contract
Failure to provide pre-contract information will amount to a breach of contract by the supplier. This is because the Consumer Contract Regulations effectively insert into all contracts an implied term that the supplier has complied with its obligation to provide pre-contract information.
As a result of the supplier’s breach of contract, customers will be entitled to extended rights and remedies. For example, the cancellation period may be prolonged and prevent the supplier from making a deduction for use of the product during the cancellation period. The provider may also be prevented from charging for any services already incurred.
Court Sanctions
Failure to comply can also result in court sanctions. The Office of Fair Trading is responsible for enforcing consumer interests throughout the UK and has the power to apply to the Court for a ‘Stop Now Order’ to prevent suppliers infringing the information obligations. This order could stop a company from trading via its website until such time as the information provisions have been complied with.
Ultimately, in a competitive online market consumers are far more likely to place their trust in a supplier if their website is comprehensive, logical and complies with the law.
If you need any advice in relation to website compliance or e-commerce please contact the head of our Corporate and Commercial Team, Ed Barnes, on 01244 354829 or at edward.barnes@dtmlegal.com.
