Press release

Supreme Court rules on right to get money back from doorstep traders

The CMA has welcomed a Supreme Court ruling today.

• From: Competition and Markets Authority
• Published: 9 September 2014

The Competition and Markets Authority (CMA) has welcomed the Supreme Court’s ruling today that a consumer who entered into a doorstep selling contract was entitled to cancel his contract and get his money back when a trader failed to tell him about his legal right to cancel.

Doorstep selling contracts are contracts entered into by consumers in their homes or other locations, away from the trader’s shop or business premises.

In this case the Court of Appeal had ruled that a consumer who paid £1,000 in advance to a removal company was not entitled to obtain a refund, because the trader had not given him any notice of his legal right to cancel the contract, and so this right had not been triggered. The CMA’s predecessor body, the Office of Fair Trading, intervened in the case in the Supreme Court because of concerns that the decision of the Court of Appeal could be misused, for example, by unscrupulous doorstep traders to take unfair advantage of consumers by not giving them notice of the right to cancel and persuading them to pay over large sums of money in advance – and then refusing to pay this back if the consumer tried to cancel.

In deciding that the consumer was entitled to cancel the contract at any time and obtain a refund, the Supreme Court’s judgment clarifies the law and fills an important gap for doorstep selling contracts entered into before 13 June 2014.

For the same type of contract entered into on or after this date, where notice of the right to cancel is not given by the trader, new legislation allows consumers to cancel the contract for up to 12 months and sets out the consumer’s rights to claim back monies paid to the trader before then.

Nisha Arora, CMA Senior Director of Consumer, said: ‘This judgment is good news for consumers and an important reminder to businesses to give their consumers notice of their cancellation rights where the law requires it.’

Notes:

1. For further information, read the judgment.

2. Details of the case of Robertson v Swift – Dr Robertson entered into a removals contract with Mr Swift’s company, to which ‘doorstep selling’ laws applied. Dr Robertson was not provided with notice of his right to cancel the contract, which was required by the law, and the Supreme Court considered whether Dr Robertson should be able to cancel the contract and recover the deposit he had paid. The court decided that Dr Robertson was able to cancel the contract and had the right to recover the deposit he had paid, and that this was the correct interpretation to give effect to the purpose of the legislation.

3. Robertson v Swift was decided under the Cancellation of Contracts Concluded in the Consumer’s Home, Place of Work Regulations 2008. These were replaced on 13 June 2014 by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Under the new rules which apply to contracts entered into on or after 13 June 2014, traders must still provide information about the right to cancel for consumers entering into contracts in their home or other non-business premises. Consumers will be able to cancel the contract within 14 days of receiving the notice or, if they are not given notice of their right to cancel, within 12 months plus 14 days from the date the cancellation period would otherwise have started from. View the Trading Standards website for further information on the new rules.

4. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the Competition Commission and the competition and certain consumer functions of the Office of Fair Trading, as amended by the Enterprise and Regulatory Reform Act 2013. For more information see the CMA’s homepage on GOV.UK.

5. For CMA updates, follow us on Twitter @CMAgovuk, Flickr and LinkedIn.

6. Enquiries should be directed to Rory Taylor on 020 3738 6798 or Kasia Reardon on 020 3738 6901.

Published 9 September 2014