New OfS enforcement deal raises consumer law compliance pressure on universities

The OfS’ partnership with National Trading Standards is a sign that the higher education regulator is moving into “regulatory compliance mode”, according to Rami Labib of Pinsent Masons.

Under the agreement, the OfS will refer cases that raise consumer protection concerns to National Trading Standards, which in turn will investigate each case and provide the OfS with advice on the application of consumer protection law, including The Consumer Rights Act (2015), in the context of the higher education sector. National Trading Standards is a national and regional consumer protection enforcement body, acting on behalf of consumers and businesses and enforcing laws that govern the way goods and services are bought, sold and rented. 

“The deal between the OfS and National Trading Standards illustrates both the OfS’ commitment to sector wide consumer law compliance, but also perhaps its lack of internal resource to regulate. The commitment from the National Trading Standards that they will examine each notification of potential breach of consumer protection legislation is significant,” said Labib.

The agreement also sets out three priority areas for the joint enforcement efforts between the two bodies. They will focus on targeting organisations that wrongly claim to have degree awarding powers or university title; unfair terms and conditions in student contracts; and misleading advertising by essay mills. By joining forces with National Trading Standards, the OfS is able to improve its ability to tackle these cases and strengthen its ability to protect students and the reputation of the English higher education sector, said the OfS director of quality Jean Arnold in a statement.

“It remains to be seen as to whether non-compliant higher education providers are subject to dual or parallel investigation and action, but what this arrangement brings into sharp focus is providers must continue to have due regard to compliance with consumer law given the OfS’ move into “regulatory compliance mode”. The OfS has already borne its teeth in relation to compliance with Condition C1 and will no doubt continue to do so, with the support of National Trading Standards following this significant tie up,” said Labib.

The OfS has been ramping up its effort on consumer protection since the start of the Covid-19 pandemic. In June 2020, the regulator issued new guidance to address issues of student and consumer protection during the coronavirus pandemic. It contained the ongoing conditions of registration relating to student protection, which all registered higher education providers in the UK are subject to. The first of such conditions, known as Condition C1, requires providers to demonstrate that in developing and implementing its policies, procedures and terms and conditions it has given due regard to relevant guidance about how to comply with consumer protection law.

In February 2021, the regulator required the institutions to undertake a review of their compliance with consumer law and to assure the OfS of their ongoing compliance with the guidance on consumer protection law it issued in the previous year.

According to the OfS, its agreement with National Trading Standards is a backstop that will operate until 31 March 2024. It will then review its effectiveness towards the end of the agreement.