The Office of Fair Trading (OFT) has said consumers should be able to expect “no unwelcome surprises” in the small print of contracts.
Some 20% of people experienced a problem with misleading contracts over the past year, accounting for 70% of the OFT’s enforcement cases.
The trade watchdog said problems arose when a term buried in the small print of a contract substantially altered the overall deal as understood by the consumer or complicated language made deals hard to understand.
An investigation by the OFT found that misleading contracts led to customers losing £3 billion over the past twelve months with telecoms and internet service providers causing the most problems. One fifth of all consumer problems are thought to be related to goods and services sold via contracts.
Mary Starks, the author of the report, said: “People should be able to concentrate on the main elements of the deal, not worry about small print traps.”
The OFT study found that only 23% of consumers read their contracts in full. The poll of 4,000 people found the over-55s experienced marginally fewer problems than the under-35s, suggesting that older consumers are more likely to scrutinise contracts they sign.
The OFT stopped short of naming any companies that may have flouted the law but said that, aside from the telecoms and internet sector, problems were found in contracts relating to mobile phones, home entertainment, home improvement, home deliveries, travel, and in-home services and repair.
The regulator also identified shortcomings in deals relating to football season tickets that did not guarantee seats, extended warranties that offer limited cover, complicated cancellation terms used by gyms and contracts with deferred charges.
Heather Clayton, a spokesperson for the OFT, said: “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.
“This report reconciles the need for small print with the real life behaviour of consumers and sets out the OFT’s expectation that 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.
“This report gives clear guidance to businesses and it will help them to assess whether their contracts need reviewing to make sure that their customers are treated properly. Transparent business practices build trust in markets, allow people to shop around to find the best deal for them, stimulating effective competition and strengthening innovation and growth.”
The OFT report said the point-size small print is written in does not deter consumers from reading the finer details of a contract but the quality of the paper it is written on does. The thinner the paper a contract is printed on, the less likely consumers are to read it in full.
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