New website rules—a Q&A on telephone charges

So only 4 days to go until new e-commerce laws some into force (eg Friday 13 June).

Today we concentrate on what businesses need to know about what they can charge customers when customers phone them. 

What are the obligations to set out the basic rate cost of a telephone call?

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the Consumer Contract Regulations) set out a number of obligations on traders regarding telephone charges. The Consumer Contracts Regulations, which came into force on 13 June 2014, state at reg 41(1):

where a trader operates a telephone line for the purpose of consumers contacting the trader by telephone in relation to contracts entered into with the trader, a consumer contacting the trader must not be bound to pay more than the basic rate

In addition, the Consumer Contract Regulations, Sch 2, para (i) states there is an obligation to provide information to the consumer (under the Consumer Contract Regulations, reg 10(1) and 13(1)) where:

the cost of using the means of distance communication for the conclusion of the contract where that cost is calculated other than at the basic rate

Is the term 'basic rate' defined?

The term is not defined anywhere within the Consumer Contracts Regulations.

Do I have to operate a helpline?

The Consumer Contracts Regulations do not impose an obligation on a trader to provide a helpline; however if a trader does and if the consumer is charged more than the basic rate for the telephone calls, then the consumer can claim the excess amount back from the trader as a contractual claim under the terms of the Consumer Contract Regulations, reg 41(2).

That said, bear in mind that under the Electronic Commerce (EC Directive) Regulations 2002 reg 6(1)(c), a trader must provide the customer with a way of contacting the seller using direct and effective communication. A trader is required to supply to a customer, before the conclusion of a contract with him or her, in addition to its e-mail address, other information which allows the trader to be contacted rapidly and communicated with in a direct and effective manner. That information does not necessarily have to be a telephone number in the first instance; it may be in the form of an electronic enquiry template through which a customer can contact the trader via the internet to whom the trader replies by e-mail (except where a customer, who, after contacting the seller electronically, finds themselves without access to the electronic network, requests the trader to provide access to another, non-electronic means of communication. This is often done by way of a telephone contact number (see Bundesverband der Verbraucherzentralen und Verbraucherverbaende; Verbraucherzentrale Bundesverband eV v deutsche internet versicherung [2009] 1 All ER (Comm) 938).

websiterules

Has any guidance from the government been published?

Yes. The Department of Business, Innovation and Skills published implementing guidance in December 2013. Guidance on basic rate is set out in Section J (and is also set out below). Interestingly, given the decrease in the number of land lines, mobile numbers (which are typically more expensive to call) are regarded as basic rate numbers.

How can I comply with the basic rate requirement?

1. Where a telephone helpline is provided, the basic rate requirement means not charging more to phone a trader about something you have bought than to call a friend or relative, that is to say the simple cost of connection. This telephone number provided should not provide the trader with a contribution to their costs

2. The following numbers, if used by traders, would comply with the regulations Geographic numbers or numbers which are always set at the same rate, which usually begin with the prefix 01, 02, or 03; Calls which can be free of charge to call, for example, 0800 and 0808 numbers. In certain circumstances charges to these numbers can be applied, for example, for those ringing from a mobile. However, OFCOM's proposed reforms will mean these numbers will soon become free in all circumstances; Mobile numbers, which usually begin with the prefix 07.

3. Premium rate numbers would not comply. They begin with the prefix 09.

4. Other revenue sharing numbers would not comply. These are numbers in which a portion of the call charge can be used to either provide a service or make a small payment to the trader. These usually have the prefix 084 or 0871, 0872 or 0873

5. Numbers with the prefix 0870 are not revenue sharing numbers. However, they can be higher than a geographic cost, and will vary depending on the tariff of the consumer's telecom company. They would therefore not comply. Following OFCOM reforms in 2015 these numbers will permit revenue sharing and in any case would no longer comply with the basic rate requirements.

6. OFCOM has ensured those wishing to change from a 0845 number have access to 03 numbers where the only change will be the substitution of the digit '3'; instead of the '8' in the prefix.

The guidance continues to answer the following questions:

  • Do the regulations say that I have to provide a telephone helpline?
  • Do I have to subsidise the phone call?
  • I am a sole trader using a mobile number. Is this permitted?
  • I sell computers and offer technical phone support.
  • I use a revenue sharing arrangement with my telephone provider to fund this service. Does the number have to comply with regulation 41?

This Q&A was originally published in LexisPSL Commercial. Click here for more details. Otherwise, do feel free to let us have your thoughts in the box below.

Area of Interest