Many UK small businesses with ecommerce web sites are failing to meet the legal requirements of the following acts and directives:

• Ecommerce Directive 2002
• Data Protection Act 1998
• Distance Selling Act 2000

This is often due to misunderstanding their responsibilities or simply lack of resources. However, failing to comply with these legal requirements may seriously damage your web site and your business.

By promoting compliance with these legal obligations, your web site will gain more credibility and increase customer's confidence.

Useful Resources

The following links provide essential information related to the UK ecommerce regulations.

• The Data Protection Act 1998
• The Consumer Protection (Distance Selling) Regulations 2000
• The Electronic Commerce (EC Directive) Regulations 2002

Data Protection

(a)  You must register under the Data Protection Act if you collect information about people (for example, employees, customers and visitors). This information can include names, addresses, telephone numbers and email addresses.

(b)  You must state what you do with your subject's data and not deviate from that statement.

(c)  The Act is applicable to businesses of any size.

(d)  You must not export the personal data outside the EC (European Community) without permission from the people you are collecting data on.

(e)  You must ensure that all information is held securely and must be revealed or deleted upon request from the subjects of the information.

(f)  You must only record pertinent data to your prime business needs.

Consumer Protection (Distance Selling) Regulations

The Consumer Protection (Distance Selling) Regulations 2000 apply to many ecommerce sites. However, they are not applicable to ‘business-to-business’ transactions.

(a)  You must provide clear information about your products and services before purchase.

(b)  You must be clear about postage and packing costs and whether VAT is included in the prices shown on your website.

(c)  You must provide a written confirmation of order following purchase, e.g., via email.

(d)  You must allow a "cooling off" period of 7 working days for most goods. Certain exclusions do apply and include perishable and digital goods.

(e)  You must inform your customers of their right to cancel their order with no loss other than return postage and packing.

Ecommerce Directive

(a)  You must display the name of your business, the company registration number (or proprietor's name), geographical address (not PO Box number), contact information e.g., telephone number and email address, VAT registration number (if registered).

(b)  You may refer to trade or professional schemes if applicable.

(c)  You must provide clear information on price, tax and delivery to buyers.

(d)  You must clearly display your site’s Terms and Conditions.

(e)  You must acknowledge all orders.

(f)  In commercial communication with your customers, you must clearly identify any electronic communication designed to promote your goods or services.

(g)  You must clearly identify the sender of all electronic communication.

(h)  You must clearly define any promotional offers and the qualifying conditions regarding these offers.

(i)  If you send unsolicited emails, you must clearly identify them as unsolicited.

Other means of increasing Ecommerce Credibility

In addition to ensuring that you satisfy the ecommerce regulations, you can gain extra credibility by:

(a)  Including verifiable testimonials.

(b)  Allowing payment via other means than online, e.g. via telephone or mail order.

(c)  Ensuring that all transactions that involve the transfer of personal and payment details are secure (via SSL).

(d)  Ensuring that your shopping cart does not make the following common mistakes:

  • Call a shopping cart something else!
  • Use a ‘Buy Now’ button instead of a ‘Add to Cart’ button
  • Give no feedback that an item has been added to the cart
  • Force the user to view the cart after each added item
  • Make the user register before adding items to a cart
  • Not provide a ‘Remove Item’ button