Experts urge universities to review student terms and conditions ahead of new consumer protection drive

The significant outlays that students are required to make in today's market for higher education means that greater emphasis is being placed on ensuring that students get what they are paying for and are being treated fairly. Increased fees mean that students are more likely to see themselves as consumers, and some may feel that their courses are poor value in the context of these increased fees.

The Competition and Markets Authority (CMA) recently published guidance aimed at assisting HE providers to comply with consumer protection laws following the 'call for information' conducted by its predecessor, the Office of Fair Trading (OFT) in 2014. It will be conducting a compliance review in October 2015, and failure to respond to or cooperate with the CMA may result in court enforcement action.

Students are in a vulnerable position in that once they have enrolled on and commenced a course of study, it is difficult for them to switch to an alternative institution. Regulators are therefore emphasising the importance of universities being clear on exactly what they are going to provide to a student and, as far as reasonably possible, sticking with it.

The scale of the problem

The OFT's call for information highlighted potential consumer law abuses across the HE sector in relation to:

• information provision and students 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 terms and conditions used by universities and their accessibility;
• the complaints handling procedures and processes of universities.

During a recent investigation, consumer organisation Which? reinforced the OFT's views that HE providers were failing to comply with consumer law in their engagement with students. In its report, Which? found that over half of HE providers currently use terms and conditions that give them a wide discretion to vary contractual arrangements with students: a practice that, in its guidance, the CMA rightly highlights may be unfair, unreasonable and unlawful.

In particular, Which? found:

• one in five HE providers used terms that Which? considered to be unlawful and in contravention of the 1999 Unfair Terms in Consumer Contracts Regulations (UTCCRs);
• three in ten HE providers used terms that Which? considered to be bad practice and that are, in Which's opinion, likely to be unlawful in contravention of the UTCCRs;
• only 5% of providers used terms or polices that Which? considered to be good practice.

Next steps for providers

In light of the CMA's guidance, we strongly recommend that HE institutions review their policies, procedures and student terms to ensure that they are in compliance ahead of the CMA's planned compliance review. If the CMA or local authority trading standards services conclude that a HE provider is still breaching consumer protection law, there is a risk that it will take enforcement action with the associated risk of significant reputational damage.

Whilst undoubtedly the impact of compliance is likely to be diminished autonomy for HE institutions, the key for HE institutions will be ensuring compliance whilst retaining enough flexibility to allow them to effectively deal with changes within their own institutions and the remit of the law.

Rami Labib and Richard Snape are universities law experts at Pinsent Masons, the law firm behind Out-Law.com.