Plans to crack down on small print

Consumers will have greater protection from unfair terms hidden in the small print under new proposals.

Fierce competition, often fuelled by price comparison websites, could be driving some traders to hide their full costs in the small print, said the Law Commission and the Scottish Law Commission.

The commissions are seeking views on proposals to protect consumers from unexpected charges and require terms to be written in plain and legible language in contracts for services ranging from utilities and financial services to mobile phones and gyms.

Under the Unfair Terms in Consumer Contracts Regulations 1999 all details in consumer contracts may be challenged for fairness unless they are specifically exempt.

The commissions are proposing that terms relating to the price or the main subject of the contract should be exempt from challenge only if they are transparent and prominent.

Law Commission spokesman David Hertzell said: "We know that the majority of consumers do not read contracts thoroughly before they sign them. They tend to focus on what appears to be the cost, expecting traders to make their money from the ticket price and not from charges that emerge later in the small print.

"We believe that it should be made clear to consumers what they are committing themselves to before they sign a contract. If they are taking out a loan, for example, they should know up front exactly what it is going to cost them. If they are signing up for a mobile phone or gym membership, it should be clear from the start what the service will cost and how long the contract will run for."

Scottish Law Commissioner Professor Hector MacQueen said: "We are proposing a new approach to unfair terms which would assist consumers and traders alike.

"First, it would protect consumers from being caught out by unpleasant surprises such as unexpected charges. Secondly, by requiring terms relating to price or the main subject matter to be in plain, intelligible language, legible and readily available to the consumer, and presented in such a way that the average consumer would be aware of them, it would help to prevent honest traders from losing out to their more unscrupulous counterparts.

"We first looked at unfair terms in contracts in 2005 and made recommendations for change that were accepted in principle by the government of the time. This consultation is an opportunity for us to make sure that our original recommendations for the reform of consumer contracts are still workable and relevant, and tackle the uncertainty that has arisen over the exemption for the main subject matter and price."