Out-Law News 2 min. read

Universities getting better on consumer law issues, but work still to be done, says CMA

Awareness among universities of their responsibilities under consumer protection law is increasing, although some poor practices remain, the UK's competition watchdog has found.

The Competition and Markets Authority (CMA) has obtained specific commitments from three universities that they will improve aspects of their terms and practices, including ending the use of terms that prevent students from graduating if they owe non-academic debts.

In a letter to higher education providers, the CMA urged them to ensure that they were complying with the law. Contractual terms should be accessible to students and all course costs transparent, and avoid wording that potentially unfairly limits the provider's liability or allows a wide discretion to vary or cancel courses, the CMA said.

The CMA stressed that it had not reviewed the terms and conditions of every provider in detail as part of its review, meaning that the concerns it had uncovered as a result of its work "may be occurring more widely in the sector".

"We now expect [higher education] providers to consider whether the concerns identified in the findings report also apply to their terms and practices, and make any necessary changes to ensure compliance with consumer protection law," it said in the letter.

University law expert Rami Labib of Pinsent Masons, the law firm behind Out-Law.com, said that the CMA's work "demonstrates that sector awareness and compliance is on the up", but that "there remains work to do, as evidenced by the CMA obtaining undertakings from three universities".

"In light of this, and the government confirming that a new Office for Students will be set up with increased powers including the ability to impose financial sanctions, higher education providers should continue to review their policies and procedures to ensure compliance," he said.

The CMA published guidance in March 2015, aimed at assisting higher education providers to comply with consumer protection laws. The relevant laws are enforced through the courts and include the 2008 Consumer Protection from Unfair Trading Regulations, the 2013 Consumer Contracts (Information, Cancellation and Additional Charges) Regulations, and the 2015 Consumer Rights Act and its predecessor, the 1999 Unfair Terms in Consumer Contracts Regulations.

The guidance was published in response to potential consumer law abuses on the part of higher education providers which were highlighted during a 'call for information' by the CMA's predecessor, the Office of Fair Trading, in 2014. These included whether students were being given all the information necessary to allow them to make an informed decision as to an appropriate course or provider, the fairness and reasonableness of university terms and conditions, and the fairness of their complaints handling processes.

The CMA found many examples of improvements that universities had made in line with their consumer protection law obligations since 2014 during its review. In particular, it cited "positive examples" of "clear and upfront information" being made available to prospective students about fee changes, additional costs and possible course changes, as well as updated policies and terms ending academic sanctions for accommodation arrears, overdue library fines and other non-academic debts.

"The CMA expects all higher education providers to comply with consumer protection law and has drawn the findings of its compliance review to their attention," said Nisha Arora, the CMA's senior director of consumer enforcement.

She added that the regulator was "continuing to look at issues relating to other providers" and could take further action if it became aware of other concerns.

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