New consumer contract regulations for helplines 13 June 2014
What is the new legislation?
Called the 'Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013', this sets out the information that a trader must provide to a consumer before and after making a sale.
Specifically for companies providing telephone helplines, this governs the type of numbers that can be used for post-contract queries and the cost to call them.
New regulation will come into force in the UK on that enshrines the principles of the EU Consumer Rights Directive. It is being introduced in all EU member states. In the UK, this will supersede the existing Distance Selling Regulations 2000 and the Off-premises (doorstep) Regulations 2008, which will be revoked from that date.
Who is affected?
If you are a trader selling goods and services or digital content to a consumer, these regulations will apply to you. There are, however, some exemptions generally where existing sector specific regulations are in force that would overlap.
Contracts exempt from the provisions:
- Gambling as covered by the Gambling Act 2005
- Construction & sale of immovable property
- Residential letting contracts
- Package travel contracts
- Timeshare contracts
- Vending machines and other goods intended for current consumptions
- Single telecom connections for use by telephone, fax or internet
- Financial services are generally exempt, although warranties, credit agreements and insurance products that are offered in conjunction with the sale of non-financial goods will still need to meet the regulations. Please note that the Government has asked the Financial Services Conduct Authority to consider equivalent regulation.
Contracts only partly covered by regulation (telephone helplines might still be affected in some sectors):
- Passenger transport is exempt from cancellation rights and most of the information requirements.
- Low value off-premise contracts (under £42)
- Items dispensed on prescription
How will I be affected?
Unless you are in one of the sectors that are exempt, from :
All telephone numbers that you provide for post-contract queries (customer services, payments, etc.) must cost no more than local (geographic) or mobile rate.
The following number types would comply:
- Geographic numbers starting 01, 02 or 03
- Mobile numbers starting 07
- Free-to-call numbers such as 0800 or 0808
Note: 0800/0808 numbers are not generally free to call from a mobile phone but this will change mid-2015 when Ofcom introduce changes to mobile charges.
- Sole use of premium rate numbers (09) and other revenue-sharing ranges (e.g. 0844, 0871) for post-contract lines will no longer be legal.
- 0870 might be acceptable but is often charged at more than geographic rates and will become a revenue sharing range in 2015 so is best avoided.
- There might be a reduction (or complete loss) in revenue share from using 0844/0871 numbers.
- You might incur call & service charges for using 01, 02 or 03 numbers.
What options do I have?
It is not a regulation requirement to provide a telephone helpline at all, so it might be appropriate to consider moving all post-sales calls to online only for some organisations. However, for the rest, here are some of the options.
- Issue new local rate numbers for use on post-contract calls. These could be 01, 02 or 03 numbers but must be advertised as prominently as the normal ones. For many consumers, these numbers are included in-call bundles and mobile packages so might in effect be 'free'.
- Companies using numbers starting 08 can apply for an equivalent 03 number from their service provider. There's no need to remember new numbers; just replace the 8 with a 3.
- 03 numbers are widely used by charities/public bodies. 03 is used by the BBC for all listener/viewer contact and is increasingly being adopted by government and pseudo government organisations, e.g. DVLA, blood transfusion, etc.
- New local rate numbers can be run in parallel with existing 08 ones.
- Where calls are answered using Automated Attendant or IVR-type systems, messages can be played to the caller informing them of the alternative number to ring for post-contract queries.
The 6-point action plan
What action your company will need to take will depend on a number of factors, such as the type of business you are in and what number(s) you use. However, here is a simple checklist of things all businesses need to consider in order to start planning for the changes.
Confirm whether your business is in scope
Refer to the useful links section for further information. As with any new regulation, there are grey areas so some companies might not be clear as to whether the regulation applies. Unfortunately, such cases will probably need to be tested in a court of law in order to resolve this. Our recommendation is to assume you are in scope and plan for it accordingly.
Review your current inbound numbers
Confirm what numbers are in use, who supplied them and any network services that they might be attached to. If there are network services (e.g. auto attendant, IVR), are these being paid from revenue share? Confirming what numbers are used is often more complex than you might think, especially when more than one service provider is involved.
Review your options
Speak to your service provider about obtaining new numbers and what solutions and assistance they can offer. If you think you need to change numbers, ask whether they can provide a changed number announcement, whether there are any limitations on which numbers can be used with specific services, etc.
When looking at solutions, possible options might include:
- Running new local rate numbers in parallel with existing ones (but you will need to tell customers who ring the old number that there is a cheaper number available).
- Separate post-sales calls and allocate and advertise new numbers.
- Using 03 numbers might ease the changes as there might only be a single digit change, e.g. 08453301234 becomes 03453301234, etc.
- Consider using network services to separate traffic where messages can be applied at network level about any new numbers (however, you can't change the rates for a call once it is in progress so the customer would need to redial).
- Choosing 0800 numbers for post-contract calls might result in mobile customers being charged and then demanding a refund of the additional costs. This will change mid-2015 when Ofcom change the mobile rates for 0800 numbers and calls to such numbers from mobiles become free to the caller.
Timelines and processes for changing numbers
Changing numbers can take time and new numbers have to published and communicated in plenty of time ahead of the changes required for . Clearly where numbers are advertised online, these can probably be changed with relative ease but others will need to be planned.
For example, having agreed what numbers to use, you will need to confirm whether any changes are required that affect:
- Operational systems
- Business processes
- Network services
- Stationery/printed materials
- Advertising – shop and van signage
Changes to operational and network services (including testing, reconfiguration and training of new processes) do not normally happen overnight and might need to be managed carefully.
Changing details on stationery/brochures including van signage can take a long time and might have to be staggered over a significant period.
Financial impact of changing numbers
Changing numbers can impact many different aspects of a company's business including the financial cost so it's important to have a clear view of the options available.
- Do you receive revenue share from any numbers? If so, how much traffic (calls, etc.) would potentially need to move to meet the new regulation and therefore what will be the financial impact to your business?
- Will you be able to continue providing the same service (and same service levels) without that revenue? For some companies, the call centre staff who answer the calls might be funded directly from revenue share. Many customers might find they are moving from having a net income to a net cost. This might be an opportunity to review your inbound contact approach.
- There's no obligation in the regulation to subsidise services, so for some companies, the only option might be to reduce customer service levels (number of staff to handle queries, hours of operation, etc.). Clearly this would be an undesirable consequence of the regulation that is designed to improve customer confidence but one that will need careful consideration.
Keeping customers informed
You need to give customers as much notice as possible of any changes in telephone numbers and support them with additional guidance on the cost to call (typically from a BT line). All available mechanisms should be used to ensure the message is heard.
Where practical, this should include putting notices on email footers, web site contact pages and even audio messages on on-hold and queuing systems. Don't forget to update telephone directories (BT Directory, Yellow Pages, Yell, etc.) and trade and consumer listing services.
Number change checklist
Changing your numbers might have a bigger impact than you might think. Here is a brief checklist of areas you might need to review when updating your post-contract numbers.
- Companies House
- Your web site
- Comparison sites
- Business cards
- Email signatures
- Fax numbers & fax headers
- Telephone directories
- IVR systems (either internal or external)
- Greeting messages for auto attendant/voice mail
- Agent scripting
- Network services
- External signage
- Vehicle liveries
- Letter headed paper
- Compliment slips
- Product packaging and instructions
- Display stands
- Department for Business, Innovation & Skills
- UK consumer contract regulation
- Guidance on the regulations