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Companies ‘don’t understand T&Cs law’ putting consumers at risk

Paloma Kubiak
Written By:
Paloma Kubiak

Consumers are being unfairly disadvantaged because many businesses do not understand the law on terms and conditions.

A survey by the Competition and Markets Authority (CMA) has found that 54% of British businesses don’t fully understand the rules on unfair terms, which directly impacts how they treat their customers.

The findings also revealed that some businesses think a signed contract is final, not realising they can’t enforce a term against a consumer if it’s unfair. Others may copy terms from larger businesses or competitors, assuming incorrectly that these will be automatically fair and legally binding.

Worryingly, the CMA found that 18% of firms admitted they had never heard of the ‘unfair terms’ clause in a contract and despite 67% using some form of terms and conditions, only 15% said they were familiar with the Consumer Rights Act (CRA) 2015.

Unfair terms are those that give businesses an unfair advantage over consumers, often by reducing their rights or ability to complain if things go wrong. For example, they can include:

  • keeping all of a customer’s deposit if they cancel, regardless of the amount the business is actually losing as a result
  • using excessively long notice periods that end up tying customers into a contract for longer than they want
  • excluding the business’ liability for things that are its fault (ie delays, or faulty goods or services)

The CMA’s Paul Latham said: “Consumers have a right to be treated fairly – and businesses need to know they can’t rely on their terms and conditions if they’re not fair.

“We know that the majority of businesses want to do the right thing by their customers, but it’s worrying that many businesses are not familiar with the law.

“That’s why we have launched this campaign to help businesses protect themselves against breaking the law, and against using contracts that they can’t enforce.”

To ensure your business isn’t breaking any law and your business documents are compliant with local and federal regulations, you may hire a business attorney to review them.

What to do if you think you’ve been unfairly treated

Firstly, make sure you read the terms and conditions of any contract BEFORE you sign it.

If you think you’ve been unfairly treated, write to the company and explain your grievance. If the company will not resolve the issue, you can take the case to the small claims court or contact the relevant ombudsman.

For complaints regarding larger sums of money, you might want to seek legal advice.

Click here for more information.