Why Should My New eCommerce Business Know About Consumer Protection Laws?

When you start an eCommerce business, there is a considerable amount to learn, including many laws you must comply with. Consumer protection laws are a significant area of law your eCommerce brand should follow. Not doing so can lead your business into problems and affect it while you try to get it fully up and running. This article will explain what consumer protection laws your new eCommerce business needs to comply with. 

Is My Business an eCommerce Business?

You may sell products online and not be an eCommerce business. If you are selling consumer to consumer, or consumer to business, you are not an eCommerce business.  For example, you may be selling your unwanted goods on sites such as:

• Vinted; 
• Facebook Marketplace, or
• Nextdoor.co.uk.

However, if you are selling goods or services as a business to a consumer, or business to business, there are specific laws that you must follow. 

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eCommerce is where you sell goods or services online, so you make sales or transactions through your website or an app. You often hear people refer to this as distance selling. You may do this through your eCommerce website or a third-party site like Amazon or eBay.

What Consumer Protection Laws Does My New eCommerce Business Need to Comply With? 

If your start-up company is an eCommerce business, you need to know some essential consumer protection laws. These apply mainly if you sell to consumers rather than business to business. 

1. The Consumer Rights Act 2015

This Act is a piece of law which details consumer protection rules you must abide by because your startup sells to consumers at a distance. These include:

• that you describe your goods as they are;
• that the goods you sell online meet a satisfactory quality and are fit for the purpose they serve;
• your legal obligations to fully refund faulty goods up to 30 days from the date your customers purchase them; and
• you usually have to fully refund faulty goods up to six months after your customer purchases them unless you can repair or replace them.

2. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCR)

This applies to most goods and services sold at a distance, such as through eCommerce. They cover, for example, your customer’s rights to cancel goods and services from you.

3. The Electronic Commerce (EC Directive) Regulations 2002 (ECR)

These regulations apply whether or not you are selling business to consumer or business to business. This applies to electronic contracts, which can include the following:

• customers who purchase on your website;
• email purchases;
• text purchases; and 
• SMS purchases.  

A summary of some of the main consumer protection rules to follow as a new eCommerce business include:

• letting customers know the exact costs and fees for what they may purchase, which they must explicitly agree to;
• a clearly labelled ’call to action’ button to purchase, which may say, for example, ‘pay now’;
• ensuring that your customers have paperwork of their purchase with you, whether in hard copy or electronic copy; and
• rules about returning goods, such as concerning refunding items. 

Getting legal advice as a start-up eCommerce brand is essential to ensure you comply with all relevant consumer protection laws. This is because, in addition to the above three sets of legal rules, there may be rules specific to your business sector that you also need to comply with in terms of consumer protection.

Why Does My Start-up eCommerce Business Need to Think About Consumer Protection Laws?

Your start-up eCommerce business must understand consumer laws and comply with them. This is because not doing so means your online business risks:

• receiving complaints;
• getting poor online reviews;
• being referred to a trading body through a complaint;
• its reputation going downhill before you have built it up; and
• being sued by an online customer.

Key Takeaways

If you are a start-up eCommerce business, it is essential to understand and comply with three primary consumer protection laws. Among the main legal rules that apply to consumers, protection as an eCommerce brand includes, for example, letting your customers know about costs in full as well as refunds and returns. It is essential that you comply with consumer protection laws; otherwise, consequences can arise, such as being sued by a customer. 

If you need help understanding what consumer protection laws your eCommerce business needs to comply with in the UK, LegalVision’s experienced eCommerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.