Newsroom

Consumers buying IT equipment to get better deal

OFT also further examines the consumer IT market

232/05    15 December 2005

Guidance on selling IT goods and services at a distance (eg on the internet or by phone) and how to make IT contracts in general fairer for consumers, has been published by the OFT today.

Download IT consumer contracts made at a distance (547 kb)

The guidance, which reflects changes to the laws on distance selling in April 2005, follows a recommendation in an OFT report on the consumer IT market published in December 2002 – changes to the laws on distance selling has meant that the guidance has been delayed. The OFT has also undertaken a review of the recommendations in that report.

Download the report (336kb)

The guidance sets out the type of terms that the OFT regards as potentially open to challenge. These include ones that:

• allow suppliers to exclude or limit liability for damage to property or personal injury arising from the use of faulty goods
• require consumers to incur charges (e.g carriage charges) for rejecting faulty or mis-described goods
• exclude consumers' rights to reject faulty software
• interfere with consumers' rights to cancel contracts for purchases made at a distance
• withhold a cash refund and provide only for the issue of a credit note upon rejection of faulty goods
• do not allow consumers a reasonable opportunity to inspect the goods for damage
• allow suppliers to unilaterally increase the price of goods once an agreement has been concluded.

Christine Wade, Director of Consumer Regulation and Enforcement, said:

'The technical details of computers are not easily understood by many people. That is why it is very important that consumers have the reassurance, when buying IT equipment, that the contract is clear and that there are no hidden traps. Our guidance will help businesses comply with the law.'

The 2002 report made a number of other recommendations that have now been reviewed. They include:

• that the industry produce a test 'standard' for inkjet cartridges so that consumers would be able to compare the costs and yields of different makes - an International Standards Organisation (ISO) Standard for monochrome laser printer cartridge yield has been produced and a colour inkjet printer cartridge standard is in development
• that printer warranties be amended if they contained terms invalidating the warranty if consumers used ink cartridges not made by the printer manufacturer - most major printer manufacturers have since dropped such terms from their warranties
• that IT industry staff are trained to identify consumers' requirements and help them make appropriate purchases - some of the large retailers have advised that they have improved the technical training for their staff. In addition the OFT produced a consumer information leaflet - Buying a PC in December 2002. Complaints to Trading Standards Services about IT equipment fell by almost 50 per cent from 2001 - 2004.

Download the consumer leaflet (102 kb)

NOTES

1. The new guidance and the 2002 IT report 'Consumer IT goods and services' are available to order  from the Publications/Reports/Consumer protection area of the site. The consumer leaflet 'Buying a PC' is available from the Publications/Consumer leaflets/General area of the site.

2. The Consumer Protection (Distance Selling) Regulations 2000, commonly referred to as the Distance Selling Regulations (DSRs), came into force on 31 October 2000 (amended with effect from 6 April 2005 by The Consumer Protection (Distance Selling) (Amendment) Regulations 2005). The DSRs give additional rights to consumers in the area of home shopping (where transactions take place under an organised scheme for distance selling run by the supplier with no face to face contact up to and including the moment at which the contract is concluded, such as online sales, mail order and telesales). Under the DSRs consumers have specific rights including rights to: clear information, a cancellation period and further protection against fraudulent use of payment cards.

3. The DSRs apply to almost all distance contracts between businesses and consumers for the sale of goods or services concluded under a distance sales or service provision scheme. But there are some exceptions: including business to business contracts, certain financial services, sales concluded at an auction, contracts for the sale of land, and sales by vending machine. Some parts of the regulations do not apply to: deliveries of food, beverages or other goods intended for everyday consumption supplied by regular roundsmen, or to contracts for transport, accommodation, catering or leisure services where these are provided on specific dates or within specified periods, or to timeshare and package holidays.

4. The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs) superseding the UTCCRs 1994, apply to standard contract terms used with consumers made after 1 July 1995. The UTCCRs protect consumers against unfair standard terms in contracts they make with suppliers. The regulations say that a consumer is not bound by an unfair term. The OFT, together with certain other bodies, can take legal action to prevent the use of potentially unfair terms. A standard term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of consumers. Only a court can decide whether a term is unfair.

Back to:Press releases