Spring Budget 2017: What this means for consumer law
It was anticipated that the Chancellor of the Exchequer, Philip Hammond, would announce the government's policy on so-called 'subscription traps' in Wednesday's Spring Budget Statement.
Mr Hammond confirmed that the government will put forward a green paper proposing protections for consumers who inadvertently subscribe for paid services after agreeing to a free trial period, or otherwise end up facing unexpected payments when a subscription is renewed.
Additionally, the government put out a call for evidence last year, looking at how consumer terms and conditions can be made clearer, simpler and shorter. It is understood that it will look to build on those findings this year. Further, the government intends to legislate to allow for consumer enforcement bodies such as the Competition and Markets Authority to ask the courts to order civil fines against non-compliant businesses, in the hope that this will deter them from breaching consumer law.
Any business that offers services by subscription will need to comply with any new rules introduced by the government. However, existing consumer protection rules should prevent consumers from becoming unfairly trapped in a contract in the first place.
Under the Consumer Rights Act 2015, businesses are required to make all consumer terms both transparent and fair in order to ensure that they are enforceable. As a consequence, information about what happens on renewal of a subscription, or at the expiry of a free trial period, should be clearly conveyed to consumers at the outset. Further, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 compel businesses to make a list of pre-contract information available to consumers before they become bound into a deal including free trial offers. This list includes information relating to the duration of the contract and the conditions for terminating it, such as any applicable charges, notice period and means of notification.