Higher Education provider is referred to Trading Standards highlighting ongoing scrutiny of student contracts

In April 2024, the OfS, the independent regulator of higher education in England, referred the London School of Science and Technology (LSST) to National Trading Standards after identifying potentially unfair terms and conditions in LSST’s student contracts.

There were concerns that the terms potentially breached consumer protection laws, including a section of the Consumer Rights Act 2015 which governs unfair contract terms. Following the referral, National Trading Standards assessed LSST’s contract and agreed that some terms could be considered unfair.

LSST cooperated with National Trading Standards to revise the terms and conditions of its enrolment contract with students, including clauses relating to extra costs that could compromise students’ consumer rights. The provider notified both current and re-enrolling students of the changes. As LSST took corrective action, the OfS decided not to pursue further regulatory measures.

Rami Labib, a higher education regulatory expert at Pinsent Masons, said the case underlined the importance for all higher education providers to ensure their student contracts are fair, transparent, and compliant with consumer law. “There is no let-up in the OfS' scrutiny into the terms of student contracts,” he said. “There is a clear message that students are consumers and higher education providers must treat them as such. This case further highlights the growing scrutiny on how institutions draft their terms and conditions.”

The OfS also referred several other institutions to National Trading Standards in 2023 and 2024 over concerns over unfair or unclear contract terms. Labib said the latest referral should be a further wake-up call for higher education providers. “It’s a clear signal to the sector: compliance with consumer protection law is not optional, and the OfS will continue to act where standards fall short,’” he said.

Andrew Church, a commercial contracts specialist at Pinsent Masons, said the case highlighted the need for ongoing monitoring in this area to ensure student terms and conditions are compliant with relevant consumer law. “This should serve as a reminder to all providers that they should regularly review their student contracts to ensure they contain fair, transparent and legally compliant provisions, and that student contracts comply with all the latest feedback from National Trading Standards,” he said. “This case also demonstrates that the OfS are proactively regulating this area and will not compromise on their position of referring institutions to National Trading Standards where it decides that there is breach of consumer law.”