Crackdown on Unfair Terms & Conditions


by EasyEditor Newswire

Firms have been warned to make sure their terms and conditions are clearly defined after the Office of Fair Trading announced a crackdown on contracts which are detrimental to customers or breach consumer protection laws.

Currently around 70 per cent of enforcement cases handled by the OFT relate to terms and conditions with at least a fifth of consumers claiming to have had a problem with the small print in contracts over the last 12 months.

Research carried out by the OFT found many contracts contained small print terms that altered the deal consumers believed it to be, or had made it difficult to understand by hiding unfair terms in plain view. At least 80 per cent of cases investigated found people who had experienced a problem said that they had been caught out by a surprise.

Examples of unfair conditions were a football club selling season tickets without guaranteeing seats, extended warranties offering limited cover and an increasing number of sale and rentback deals where the tenancy offered was much less secure than many people realised.

The OFT has also raised concerns about complex, deferred or contingent charges that exceed costs such as businesses which include small print charges that don’t correspond to any service provided or which include obstructions to consumer switching such as imposing onerous cancellation terms.

“The recent economic difficulties have resulted in a lot of companies trying to tighten up on their terms and conditions but great care needs to be taken that any small print cannot be deemed unfair to customers,”

said David Reilly, Commercial Director of Create Ts and Cs, a company specialising in creating tailor made terms and conditions. “A set of Terms and Conditions drafted in plain English, can help a company to differentiate themselves by communicating clearly and openly with their client in mind”

“The OFT will take a dim view of any firm which deliberately or not tries to tie down consumers to unfair contracts.

“Every business needs to review their contracts to make sure their customers are treated properly. Creating fair and transparent terms and conditions is good business sense as it not only offers protection for both parties but builds trust with customers and encourages repeat business.”

However, the use of small print clauses are not automatically unlawful as it depends on the specifics of each contract and a number of other factors.

“On the one hand, we all know that people don’t read the small print of contracts. On the other, small print is a necessary fact of life and consumer law isn’t there to protect the careless or the over-hasty,”

said Heather Clayton, Senior Director of the OFT’s Consumer Group which is calling for the need for small print to be reconciled with the real life behaviour of consumers.

“Consumers should be free to focus on the main elements of the deal, confident that there will be no unwelcome surprises in the small print.”