Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008

rose to move, That the Grand Committee do report to the House that it has considered the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008. The noble Baroness said: We propose that these new regulations shall replace the current regulations, the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987 under the vires of the Consumers, Estate Agents and Redress Act 2007 and Section 2(2) of the European Communities Act 1972. The purpose of the proposed new regulations is to extend to solicited visits the cooling-off period and cancellation rights that currently apply to contracts made during unsolicited visits by traders; and to require that a notice of the right to cancel the contract be prominently and clearly displayed in the same document where the contract is completed wholly or partly in writing. As in the current regulations, the proposed regulations apply to contracts made during visits by a trader to the consumer’s home; to his place of work; to the home of another person; or on an excursion organised by the trader away from his business premises. There are certain contracts to which the proposed regulations do not apply. These include contracts made during solicited visits and relate to consumer credit and home purchase sales, where current regulation under the Consumer Credit Act 1974 and the Financial Services and Markets Act 2000 is considered adequate and satisfactory. As before, under the proposed regulations the consumer will have the right to cancel the contract at any time during a cooling-off period of seven calendar days starting from the date of receipt by the consumer of a notice of a right to cancel. The regulations apply to contracts with a total payment value of £35 or more. The proposed regulations will now require that the notice of the right to cancel must be prominently displayed in a contract that is completed wholly or partly in writing. The notice must be easily legible and where incorporated in a contract must be set out in a separate box with the heading ““notice of the right to cancel””. For certain types of contract, for example the sale of perishable goods, where a consumer has agreed to performance of the contract beginning before the end of the cooling-off period, we propose that the trader must include in the notice of the right to cancel a statement that payment may be required if the contract is subsequently cancelled, and the consumer must record their agreement in writing to performance of the contract beginning before the end of the cooling-off period, if that is what the consumer wishes. These proposals will give the consumer and the trader more certainty in what has been agreed and when performance of the contract can begin. In the event of a dispute, it will provide the enforcement bodies with a much clearer audit trail. The OFT in its 2004 report on the doorstep selling market estimated that a substantial proportion of complaints, around 44 per cent, are generated by home maintenance, improvements, repairs and doubling glazing sales. The potential for consumer loss is high in relation to these types of sales because of the value of the goods or services provided. For example, in 2007, the value of contracts for which complaints were made in relation to the construction or repair of conservatories alone was in excess of £20 million. We therefore propose that the new regulations should now apply to contracts for the construction or repair of extensions, conservatories, patios and driveways. We believe it is right that these types of contract should fall within the scope of the regulations. As in the current regulations, the new regulations make it clear that failure to provide a written notice of the right to cancel a contract or to provide the information required, or failure to do so in accordance with the regulations, would make a contract unenforceable against a consumer. In addition, the new regulations would allow a maximum level 5 fine, which is up to £5,000, to be imposed on a trader. I commend the regulations to the Committee. Moved, That the Grand Committee do report to the House that it has considered the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc. Regulations 2008. 21st Report from the Joint Committee on Statutory Instruments.—(Baroness Vadera).