May 29, 2014

Motor dealers warned of impact of new consumer contract rules

Motor dealers are being warned not to ignore the new consumer contract regulations which come into force on June 13.

James Fawcett, partner and motor retail expert at law firm Gordons, says the new regulations, although primarily aimed at ‘off-premises’ or ‘distance’ contracts, contain some provisions which are relevant to contracts with consumers that are made on a dealer’s premises.

These include requirements to provide certain information to customers and rules relating to the use of telephone helplines.

Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, where retailers offer helplines for people to contact them about something they have bought, there should be a number available which charges no more than the basic rate.

The Department for Business Innovation & Skills’ guidance on the regulations explains that most numbers starting with the 084, 087 or 09 prefixes, which are used by many motor retailers, would not comply with the regulations.

However, the guidance asserts that not all numbers operated by retailers must be basic rate lines. It is only when consumers need to contact them about goods they have already bought that a basic rate number must be available.

Fawcett said: “Given the confusion over which numbers comply and which don’t, and in light of the fact that dealers often have separate numbers for sales, service and parts departments, the safest course of action is for dealers to use only geographic numbers – those with 01, 02 or 03 prefixes – for all their lines. Alternatively, dealers should take advice on how to best to set up their telephone systems to ensure they comply.”

Other changes being implemented by the new regulations include consumers being given an extra seven days to change their minds and cancel ‘off-premises’ or ‘distance’ contracts, extending the period to 14 days.