Virgin Wines and the Distance Selling rules

The OFT announced yesterday that Virgin Wine Online Ltd has changed its conditions following the OFT's concerns that it did not meet the rules on delivery and cancellation rights and attempted to limit its liability to consumers in unfair and unlawful ways.

The OFT had concerns that certain terms did not comply with the Distance Selling Regulations including those that:

• allowed delivery to be delayed for certain products beyond the statutory 30 days or the date agreed without refund;
• prevented reimbursement of delivery charges when a consumer cancelled. The DSRs state that the full sum paid must be refunded;
• prevented re-imbursement following cancellation until certain conditions had been met. The Distance Selling Regulations give consumers an unconditional right to a refund following cancellation;
• allowed cancellation to be made only by telephone or e-mail. The Distance Selling Regulations allow other methods too.

The terms have all been revised in accordance with the regulations.

The OFT also had concerns that a number of terms were potentially unfair under the Unfair Terms in Consumer Contracts Regulations including those that:

• excluded liability for defective or misdescribed goods. One term has been deleted and another revised to accept liability in circumstances when the supplier is in breach;
• excluded or restricted liability for delay. This has been amended to allow limitations only in situations clearly beyond the supplier's control;
• limited time for notification of broken or spoiled bottles to 30 days from delivery. This has been extended to 90 days;
• allowed cancellation of an order for any reason, other than breakages on delivery, only if notified within 7 days, only in exceptional circumstances and at the absolute discretion of the supplier. The term has been deleted;
• allowed the supplier the unrestricted right to change the structure and benefits of the Virgin Wine Club. This has been amended so that changes will not affect orders already placed at the time;
• allowed the supplier to cancel membership of the club without notice. This has been amended to provide for 30 days notice; and
• excluded or restricted liability for death or injury. Terms have been revised to remove the financial limitation and to accept liability for 'foreseeable loss or damage'.

Welcoming the revised terms and conditions John Vickers, OFT Chairman, said:

"The internet is a valuable and expanding resource for consumers. This case illustrates the rights of online shoppers which suppliers must respect, and we are pleased that it has been resolved by agreement."

However, Rowan Gormley, CEO of Virgin Wines, told OUT-LAW.COM:

"Virgin Wines was not forced to change its terms and conditions. We were approached by the OFT and it was the OFT's opinion that our conditions needed changed. We agreed to co-operate. However, the OFT's comments were not a reflection on how we deal with customers."

The Distance Selling Regulations came into force on 31st October 2000 and gave new rights to consumers in the area of home shopping.

Under the Regulations, consumers shopping for goods and services by telephone, mail order, fax, digital television, the internet and other types of distance communication have additional rights including rights to clear information, a cooling-off period and further protection against fraudulent use of a credit card.

The Unfair Terms in Consumer Contracts Regulations came into force on 1st October 1999 and replaced regulations of 1994.

The current rules apply to standard contract terms used with consumers in contracts made after July 1995 and state that a consumer is not bound by a standard term in a contract with a seller or supplier if that term is unfair. They give the OFT powers to stop the use of unfair terms, if necessary by obtaining a court injunction. Ultimately, however, only a court can decide whether a term is unfair.