08 Mar 2017

Ashley Borthwick, Associate, said:

"The government has committed in the Budget to taking steps to protect consumers from unexpected fees or unfair clauses; to simplify terms and conditions; and to give consumer bodies greater enforcement powers.

"It is not clear at this stage what this is likely to mean for businesses.  However, in respect of simplifying consumer terms, if the call for evidence launched last year is anything to go by, the proposals may result in significant changes. A requirement, for example, may be introduced for key terms to be presented "bold and upfront" in signs, leaflets or online pop-ups.  

"Subscription renewals and free trial periods are already within the scope of consumer legislation concerning, for example, unfair terms and misleading commercial practices. However, it seems likely that more robust measures will be introduced to help draw these issues to the attention of consumers. For instance, there might be stricter requirements to inform consumers when initially signing up to the service and/or requirements to notify customers coming to the end of the subscription or free trial period.

"The introduction of civil fines for businesses found to be in breach of consumer laws will provide more of an incentive to ensure compliance. However, the actual impact in practice is likely to depend upon the scope of consumer protection rules covered and how the fines are calculated. Businesses will face more of a challenge if potentially grey areas, such as unfair terms, are included within scope."