Distance selling

The Distance Selling Regulations (DSR) and the Distance Marketing Directive (DMD) aim to provide increased protection, and greater choice, for consumers buying at a distance throughout the European Union. Its purpose is to give consumers confidence in buying goods and services where there is no face to face contact with the seller and to ensure that all traders selling at a distance meet certain basic requirements. The regulations applies to all businesses that are selling products via the internet or telephone at a distance.

Advice to members

The directives both require that certain prior information is provided before the contract is concluded and offers consumers’ a legal right to cancel. There are slight differences depending on which regulations are applicable. The following list will assist members in finding out under which regulation their product falls under;

Conditional sale – Distance Marketing Regulations - Where a consumer becomes bound to purchase the goods from the outset, but they do not own the goods until they have fulfilled all the conditions of the contract. 
Hire Purchase – Distance Marketing Regulations - Hiring of goods with an option for consumers to purchase at the end if they want to. 
Personal Contract Hire – Distance Selling Regulations - Long term hire of a vehicle to a consumer. 

Under these directives members must provide consumers with clear information so that they can make an informed choice about whether or not they wish to buy.  Your customers must be provided with particular information prior to the conclusion of a contract, including; the name of the company, a description of goods and services and notice of the right to cancel.

For further information please see our fact sheet on Financial Products Sold at a Distance.

Leasing Brokers

As leasing brokers offer two different types of contract you must be aware of which of the regulations will be applicable for that contract.

• The agency contract – An agreement between the consumer and the leasing broker. The consumer agrees the leasing broker will act on their behalf to source the vehicle.  This is a contract for the supply of services.
• The vehicle purchase contract – An agreement between the leasing company and the consumer for the purchase of the vehicle. This is a contract for the supply of goods.

If you, as the consumers agent have face-to-face contact with the leasing company for the purpose of making the contract then the regulations are not applicable for the vehicle purchase contract. If you are acting on behalf of the consumer you are obliged to pass on the requirements of the DSRs.  If you are acting on behalf of the leasing company you are legally bound to ensure compliance with the DSRs for the vehicle purchase contract.

There is an exemption from the distance selling regulations where the product has to be made to the customer’s specification or clearly personalised.  The Office of Fair Trading has stated that picking from a pre-defined list of options or registering the vehicles in the consumers name with the DVLA does not fall under this exemption.

For further information please see our fact sheet on Distance Selling for Leasing Brokers.