Distance Selling Regulations and credit card refunds
I have often been asked about distance-selling contracts where payment has been made by credit card. My advice has always compared distance-selling controls with those to be found under the Consumer Credit Act 1974,
The Distance Selling Regulations (DSRs) deal with the cancellation of certain contracts, and also provide for the cancellation of any linked credit agreement. However this clearly applies only to a credit agreement taken out for the purpose of the supply contract.
For most contracts, an existing credit card will be used so the question remains – can you get a refund from the credit card provider?
The main uncertainty lies over whether Section 75 of the Consumer Credit Act 1974 applies. Section 75 only applies if there is misrepresentation or breach of contract. I am not convinced that voluntary cancellation rights provided by the DSRs could come within the concepts of misrepresentation or breach of contract. A breach of the consumer’s rights under the Regulations would presumably be a breach of statute. As they say, that must await a decision of court!
But there is another difficulty – the Consumer Credit Act 1974’s rules on cancellation rights provide that, on cancellation, the consumer is entitled to a return of any money paid, part-exchange goods etc. Even better, Section 70(3) says that there is equal liability for such refunds, or in other words, the creditor will have to pay the money if the supplier does not.
So it would have been simple for the legislators to have used the Consumer Credit protections within the DSRs, thus ensuring that consumers could get refunds on distance selling contracts. They did not, so how can we argue that consumers should get that benefit?
This page was last updated on 26/10/04 (c) Bob Imrie