Selling FAQ

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• Consumer rights FAQ
• Consumer health and safety FAQ
• Sale of goods and services FAQ

Consumer rights FAQ

Can a business make credit checks on its customers?

A business can make credit checks on its customers, although the Department of Trade & Industry (DTI) advises that full credit checks are limited to larger orders and to accounts that constitute the bulk of sales. Checks can be made through several sources:

Do customers' rights apply to goods bought in private sales and auctions?

Customers have less rights buying from private vendors and auctions than they do when buying from professional traders.

According to the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982, goods sold by a trader must be of a satisfactory quality, do what they are designed to do, be as described and safe (under consumer protection legislation).

On the other hand, slightly more limited standards apply to goods sold by a private vendor, so goods must be:

Customers buying at auctions have less rights still, because auctioneers can refuse to take responsibility for the goods they sell. They can do this by having exclusion clauses in their catalogues, or by issuing notices, for example, by putting a sign on a good saying 'sold as seen'.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

Do customers' rights apply to sale goods?

A customer has full rights under the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982 when buying sale goods. However, if goods are reduced in price because of some defect and a customer is aware of this or should notice this, then there is no entitlement to a refund on the basis of that fault.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

Do customers' rights apply to second-hand goods?

Under the the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982, customers have full rights when buying second-hand goods. This means, as with new items, goods should be of satisfactory quality, do what they are designed to do, be as described and safe under consumer protection legislation.

However, the law states that customers should understand that the quality and performance of second-hand goods is usually lower than that of new ones and take account of this. Nevertheless, goods must always be as described; so, for example, it is illegal to describe a plastic coat as 'leather'. Also, if goods are faulty or a safety hazard, a consumer is protected by law and can demand a refund or compensation.

If a customer buys second-hand goods from a private vendor, different rules apply.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and ITSA, Trading Standards Central web sites.

How does the 'test of reasonableness' apply to contracts with customers?

Under the Unfair Contract Terms Act 1977, a trader can only provide an inadequate service or limit his liability for damages or loss (other than death or personal injury) resulting from negligence if he can prove that a clause excluding him from liability passes the 'test of reasonableness'. This applies to the supply of both goods and services and a trader must prove in court that the clause was reasonable, rather than a customer prove it was unreasonable.

The test of reasonableness in court covers some of the following issues:

The Act has been supplemented by the Unfair Terms in Consumer Contracts Regulations 1994 (SI No. 3159) and the Unfair Terms in Consumer Contracts Regulations 1999 (SI No. 2083).

Further Information

For further information see the Department of Trade & Industry web site.

Must a customer keep a receipt of a good or service to get statutory legal rights?

A customer does not need to keep a receipt for a good or service to get the legal rights associated with buying it, nor is it necessary for a trader to give a customer a receipt. Despite this, a shop will often ask for some proof of purchase before giving a refund for a good or service, so customers are advised to ask for one. If a customer does not have a receipt, then a cheque stub, bank statement or credit card slip proves evidence of a transaction.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

What legal rights does a customer have if there is something wrong with a good or service?

A customer buying for private rather than business use has consumer rights under the the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982.

Buying goods

If a good is not of a satisfactory quality, does not do what it is designed to do, is not as described, or is unsafe, then a customer can reject it and is entitled to their money back. A customer does not have to accept a credit note and may also be entitled to compensation for any losses or expenses incurred.

There are exceptions to the general law. A customer is not entitled to their money back if:

Buying services

If a service is not provided with reasonable care and skill, within an agreed timescale or a reasonable period and for the agreed price or a reasonable fee, then the business providing the service may be liable to refund the customer for all or part of the work, or be taken to court if proved negligent.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Institute of Trading Standards Administration (ITSA), Trading Standards Central web sites.

What legal rights does a customer always have when buying goods?

A trader selling goods to a customer enters into a contract controlled by the the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982. All goods must:

In particular, traders should be aware of these features of consumer law:

Further Information

Businesses trading online need to be additionally aware of the Consumer Protection (Distance Selling) Regulations 2000. The regulations mean suppliers must give certain ‘prior information’ to consumers:

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

A key feature of the regulations is that every consumer has a seven day cooling-off period during which time they can cancel an order without a reason.

What legal rights does a customer always have when buying services?

Under the Supply of Goods and Services Act 1982, a trader providing a service should do so:

Additionally, any goods or parts fitted as part of a service contract must be satisfactory, as described and fit for their purpose.

If work is badly done, the customer has to prove there was no benefit whatsoever from it to receive a full refund. If a business is proved negligent in its work, it usually has a chance to put the situation right, but may have to pay them compensation or charge a reduced fee. If another business contractor has to put work right, the business responsible for the original work may have to pay for this.

If a job is not completed on time, a customer can write setting a date for completion and if this date is not met then the business is in breach of contract. The customer can then use another company and the business that started the work will be legally obliged to pay for it to be completed.

A customer has up to six years to begin legal proceedings against a business for work that is badly done; onus is on the customer to find proof that the job was in fact not done properly.

Once a price is agreed between a business and customer, the customer cannot complain later if they find cheaper services elsewhere since a business can set whatever price it likes. If a customer withholds all or part of the payment for work or stops a cheque or credit transaction, a business can take the customer to court.

Contract terms for services and well as goods are controlled by the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994 No.3159).

Under the Stop Now Orders (EC Directive) Regulations, in force since 2001, traders who fail to notify customers that they can cancel work without penalty during a cooling-off period are liable to Stop Now Orders – if these are not met, a trader is in contempt of court and liable to fines or imprisonment.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

Which government agencies protect and enforce consumer rights?

There are two main government bodies responsible for protecting consumer rights and enforcing legislation in this area.

The Consumer Affairs directorate of the Department of Trade and Industry works to help consumers make informed purchases and to protect them from unsafe products and unfair business practices. It does this by enforcing the law on consumer rights and by providing information. The directorate works in partnership with government by advising ministers as well as liaising with other organisations. The Office of Fair Trading (OFT) is a government department with the job of protecting the economic welfare of consumers. It also enforces consumer legislation by providing consumers with access to information and ways of getting compensation.

At a regional level, local authorities have Trading Standards departments which enforce fair trading, consumer protection and environmental safety legislation. Trading Standards officers and departments in local government get support and information from the Institute of Trading Standards Administration (ITSA). In turn, the ITSA works closely with the OFT and liaises with central government on consumer issues.

Under the 2002 Enterprise Act, local trading standards officers have increased powers to deal with “rogue dealers” who do not adhere to the cooling-off period allowed to customers. This period allows customers to cancel work without penalty; trading standards officers can impose Stop Now Orders on traders to enforce the law. Stop Now Orders Regulations came into force in 2001 following an EC directive.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites, or contact your local authority.

What special regulations cover selling and advertising goods and services online?

A business advertising or selling goods or services online, which includes advertising or selling on the Internet, and on interactive television and mobile telephones, must comply with the Electronic Commerce Regulations 2002. These Regulations meet an EC Directive on electronic commerce.

The key feature of the regulations relates to the information a business must give a consumer.

A business dealing online must give customers:

If the business is advertising online, it must be clear who and what is being advertised, and any promotional schemes must be clearly identified.

Finally, in making an order, a customer must be made aware of:

The Regulations do limit the liability of a business which unwittingly carries or stores unlawful content.

If a business does not comply with the Regulations, then customers can cancel orders, seek court orders, or sue for damages, depending on the circumstances. Trading Standards can also apply Stop Now Orders to businesses who do not comply.

What help is there for a business in dispute with a loan or credit company?

Under the Consumer Credit Bill 2004, changes to the rules for consumer credit businesses allows consumers, including small businesses, to challenge lenders who are behaving badly through an 'Alternative Dispute Resolution' scheme. The scheme, run by the Financial Services Ombudsman, gives small businesses borrowing up to �25,000 the same rights as consumers, effectively giving them easier access to credit. The scheme is intended to allow resolution of disputes without costly court action. Businesses subject to complaints under the dispute scheme will have to pay a fee of around �360.

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Consumer health and safety FAQ

What is the law regarding toy safety?

The Toys (Safety) Regulations 1995 deal with the safety of toys. Toys are defined in the regulations as products or materials designed for play by children under 14. These regulations apply to both new and second-hand toys and affect manufacturers, importers, retailers, hirers and other suppliers of toys. The Regulations require that new toys must:

Second-hand toys must meet safety requirements but not the other requirements of the regulations.

Supplying toys that do not meet safety requirements may result in a fine and/or a prison term. Some toys are subject to additional regulations, while other products that might be considered as toys, for example toy steam engines, may not be subject to these Regulations because they do not fit the description of toys under these regulations and are covered by the General Product Safety Regulations 1994 (SI 1994 no.2328).

Further Information

For further information see the Department of Trade & Industry web site.

What are the main pieces of consumer safety legislation?

The main piece of legislation dealing with consumer safety is the Consumer Protection Act 1987, which protects consumers from defective products, that is products that do not reach a reasonable level of safety. The General Product Safety Regulations 1994 (SI 1994 no.2328) also deal with product safety and in some sections replaces the Consumer Protection Act 1987. The Consumer Protection Act 1987 gives consumers the right to sue for damages if they have been injured or suffered property damage over a certain value and compensation can also be sought if a defective product results in a death.

The following suppliers are affected by this legislation:

It is the responsibility of businesses to ensure that their products are safe and the General Product Safety Regulations 1994 outline their duties, which include providing relevant information to consumers to assess the risks of a product and the sample testing of products. The Department of Trade and Industry also provides advice on what businesses can do to monitor and control the safety of products they supply. Suppliers may be subject to fines or imprisonment if they do not meet safety regulations.

Other legislation is specific to the safety of particular products. Examples of such legislation are the Cosmetic Products (Safety) Regulations, the Fireworks (Safety) Regulations 1994 and the Furniture and Furnishings (Fire)(Safety) Regulations. These pieces of legislation may also refer to retailers and wholesalers.

Further Information

For further information see the Department of Trade & Industry and Trading Standards Central web sites.

Which products and suppliers must comply with certain fire regulations?

Under the Consumer Protection Act 1987, furniture, furnishings and nightwear are subject to fire safety regulations.

The Furniture and Furnishings (Fire)(Safety) Regulations 1988 apply to a wide range of products which contain upholstery, as well as loose and stretch covers for furniture. Some examples of these products include:

Some furnishings, such as sleeping bags, curtains and carpets, do not need to conform to the regulations. In addition, furniture made before 1950 is exempt. The relevant furniture and furnishings must pass fire safety tests and display labels detailed in the regulations.

The Nightwear (Safety) Regulations 1985 apply to nightwear and garments that are normally worn as nightwear and mean that children's nightwear must meet flammability performance standards. All other nightwear garments must have labels showing whether they meet the flammability standards.

The suppliers who are affected by both sets of regulations are:

The Furniture and Furnishings Regulations also apply to the following suppliers:

Further details of fire safety requirements are supplied in the Regulations.

Further Information

For further information see the Department of Trade & Industry web site.

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Sale of goods and services FAQ

Do different rules apply to goods and services bought with a credit card rather than cash or cheque?

Buying items worth more than �100 on a credit card gives a consumer extra protection since a card-owner is covered by credit card insurance under Section 75 of the Consumer Credit Act 1974. The Act introduced 'equal liability', meaning that a credit card company has the same responsibilities and obligations to a customer as a seller.

If a customer has a problem with goods, for example, they are faulty or do not arrive in the post, they can complain to the vendor and the credit card company and ask the credit card company to refund their money. This is the case even if the customer has only paid the deposit on their credit card, if it is more than �100. Also, if a company disappears or goes out of business and the customer has not received goods or finds that they are faulty, they can claim against their credit card company.

The law does not apply to debit cards or charge cards such as American Express or Diners Card.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

In what circumstances does a business not have to refund a customer?

Refunds to customers are governed by the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982.

Goods A business does not have to refund a customer for goods if:

Services A business does not usually have to refund a customer for services if work is badly done, unless:

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

What are the main elements of the law of contract?

When a customer buys goods or service from a trader, such as a shop or a building contractor, they are entering into a contract. Under the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982, the consumer then has automatic statutory rights.

A contract is a legally binding agreement concerning the exchange of something of value between two or more parties. A contract does not have to be in writing; verbal agreements are just as legally binding as written ones, but they are harder to prove.

The contract must contain the following three elements if it is to be legally binding:

In addition to these elements, extra terms can be written into a contract, such as a particular delivery date. Any rights that the contract gives the customer are in addition to their statutory rights.

Additional legislation relating to contracts is covered by the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994 no.3159). These laws are designed to stop traders from putting unfair terms in contracts with customers and clients.

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

What details must a business include on a sales invoice?

A limited company must include its company name and registered address on its sales invoices and its VAT number if it has one. A sole trader does not have to be registered with Companies House so does not have these details to display, but if the proprietor's name is not part of the business name, it needs to be included on invoices. To make payment easier a sales invoice should also include:

What is the law regarding the description of goods and services?

The Trade Descriptions Act 1968 ensures that descriptions of goods, prices and services are accurate and not misleading. The Act makes it illegal for a trader to give a false description to goods, to supply goods that have been misdescribed and to make false statements about services, accommodation or facilities.

The Act gives details about what constitutes a trade description, including:

A trade description can be given verbally, in writing, by illustration or by implication. A false or misleading description of a good is an offence, even if the offence was committed unintentionally. The misdescription of a service, accommodation or facility is an offence only if the description was false at the time it was made and if the trader knew that the description was false or made the description without due diligence.

The Trade Descriptions Act 1968 is enforced by Local Trading Standards authorities.

Further Information

For further information see the Department of Trade & Industry and Trading Standards Central web sites.

What is the law relating to guarantees?

A guarantee or warranty provides consumers with additional rights to their existing contractual rights set out in the the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982. They are essentially a promise to repair any faults that are due to manufacturing or material defects and can be used when the consumer's statutory rights no longer apply. Like contracts, they should be clearly and unambiguously written. They cannot legally be used to limit the seller's liability for selling defective goods or goods that do not match their description.

Guarantees fall into three categories:

If the trader or manufacturer refuses to make the repairs as specified in the guarantee, then the consumer may be able to claim against them, although there are exceptions:

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading and Trading Standards Central web sites.

What are the main pieces of legislation relating to the proper supply of goods and services?

Specific legislation and common law give customers certain rights with regard to the supply of goods and services. The main pieces of legislation that deal with the supply of goods and services are:

In addition to these acts there is criminal legislation that applies to the supply of goods and services, such as the Trade Descriptions Act 1968.

Further Information

For further information see the Department of Trade & Industry web site.

What legal rights does a customer always have when buying goods?

A trader selling goods to a customer enters into a contract controlled by the the Sale of Goods Act 1979, amended by the Sale and Supply of Goods Act 1994 and the Supply of Goods and Services Act 1982. All goods must:

In particular, traders should be aware of these features of consumer law:

Further Information

For further information see the Department of Trade & Industry, Office of Fair Trading, the ITSA (Institute of Trading Standards Administration) website Trading Standards Central or your local authority.

When does a business need a credit licence?

If a business offers credit or lends money to consumers, or allows customers time to pay for goods and services, it must be licensed with the Consumer Credit Licensing Bureau of the Office of Fair Trading (OFT) under the Consumer Credit Act 1974. The following types of business must be licensed with the OFT:

The Office of Fair Trading holds a public record of all licensed traders and of all those who have applied for a licence. The OFT can provide details to the public about its licensed businesses, such as the type of activities they cover, their authorised trading names and main business address.

The Consumer Credit Bill 2004 changes the rules under which consumer credit businesses trade. The Office of Fair Trading (OFT) has increased powers to check businesses and place special requirements on licence holders if they see fit. The Bill also allows consumers, including small businesses, to challenge lenders who are behaving badly through an 'Alternative Dispute Resolution' scheme. The scheme, run by the Financial Services Ombudsman, gives small businesses borrowing up to �25,000 the same rights as consumers, effectively giving them easier access to credit. The price of licences for sole traders is expected to double to �220 as part of the Bill; and there will be a fee of around �360 for businesses subject to complaints under the dispute scheme.

Further Information

For further information see the Office of Fair Trading web site.

What laws govern online selling of goods and services?

Consumers buying goods and services on the internet are protected by laws covering all other kinds of 'high street' shopping, such as goods being of satisfactory quality and advertisements not being misleading, as well as regulations designed especially for 'distance selling' (shopping via the internet and also by phone, mail order and digital TV). Consumers have fewer rights when buying goods privately at an internet auction.

The key rights given to consumers by the Consumer Protection (Distance Selling) Regulations 2000 are:

Clear information for customers means in practice:

The seven day cooling-off period starts seven working days after goods are received and allows a customer the unconditional right to cancel. However, there are exceptions for goods made to a customer's specification and perishables. Also, businesses are protected from consumers who cancel at the end of the period and return goods in a poor condition, in which case suppliers can seek recompense. If a supplier needs to force a customer to return goods after they have cancelled a contract, they can charge the customer for the costs of recovery.

Government departments also give advice to consumers in leaflets and on websites about 'safe internet shopping'. Advice emphasises using websites that customers know, are recommended, or have the TrustUK logo, and looking out for suppliers with secure sites showing a closed padlock at the bottom of the screen when entering personal details.

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