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By | OUT-LAW.COM 21st June 2007 07:38

One in four web merchants do not know web shopping laws

Most e-shoppers unaware of right to cancel

Most internet shoppers do not know about their right to cancel and 28 per cent of UK-based online traders are not aware or only slightly aware of the laws applying to internet shopping, according to a report (pdf) published by the Office of Fair Trading (OFT) yesterday.

While 56 per cent of internet shoppers surveyed did not know about their right to cancel under the Distance Selling Regulations, 29 per cent did not know where to turn to get advice on their rights.

The OFT estimates that by searching more effectively, shoppers could save £150m to £240m each year. The report also suggests that shoppers are hindered by "unexpected additional charges which are sometimes added in the latter stages of a purchase." It reckons that shoppers pay £60m to £100m a year in unexpected additional charges.

Two-thirds of UK-based traders had never sought advice on internet shopping laws, according to the OFT's research. More than one-fifth of sites examined by the OFT failed to provide an email address, a requirement of the E-commerce Regulations.

One fifth of online electrical retailers did not think that buyers had a right to cancel, and more than half wrongly thought that they could withhold the cost of outward delivery when refunding shoppers.

Twelve percent of electrical websites and 39 per cent of music retailers’ sites selling CDs did not appear to mention the cancellation period. Some sites imposed conditions that could prevent or deter consumers from exercising their cancellation rights. The OFT reported that 59 per cent of electrical sites stated at least one condition on consumers’ rights to cancel and receive a refund which may have led to a breach of regulations.

The OFT also commented on the legal regime that derives from European Directives.

"These laws appear broadly fit for purpose at present," it said. "We did, however, identify a number of areas where they may need to be revised to take account of how internet shopping is evolving. We have brought these to the attention of the European Commission, who are currently reviewing how they might need to be improved."

Its report did not specify which areas need revision.

The UK internet shopping market is estimated to be worth over £21.4bn, and last year over 20 million people shopped online with nearly a third of them spending over £1,000, according to the OFT.

The OFT said it will announce a strategy by the end of 2007 to raise awareness of shoppers' rights, as well as other issues such as effective search, risks, redress and protections.

Copyright © 2007,

OUT-LAW.COM is part of international law firm Pinsent Masons.

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