Government to examine consumer protection

In the recent Spring Budget, the Chancellor of the Exchequer announced a new consumer protection ‘green paper’, which will examine markets which “are not working efficiently or fairly".
Among the measures to be covered in the green paper are:
1. Making consumer terms and conditions (T&Cs) “clearer, simpler and shorter for consumers to engage with".
2. Measures to protect consumers against “unexpected payments” arising from subscription services (for example 'on-demand' TV and music streaming services, or services offering reoccurring home delivery of things like newspapers and magazines).
3. New legislation to be introduced “at the earliest possible opportunity” to allow consumer enforcement bodies, including the Competition and Markets Authority (CMA), to ask the courts to order civil law fines against companies considered to be acting in breach of consumer law obligations.
The proposals form part of ongoing discussions around ways to strengthen existing consumer law. The Government aims to ensure a strong and effective deterrent against companies that mislead or mistreat consumers.
The Government previously published a ‘Call for Evidence’ in March 2016, seeking consultation responses as to how current legislation could be modified in order to encourage businesses to simplify consumer-facing T&Cs. This identified a number of possible proposals for further consideration, including requiring companies to present a condensed summary of their “key terms” and other measures that may increase consumers’ awareness of their rights and obligations (for example, by promoting a common format for T&Cs or giving increased prominence to non-standard terms).
The new green paper is also likely to address situations where individuals inadvertently join a subscription service, for instance by initially signing up to a free-trial which subsequently converts to a paid-for subscription after the trial period ends.
The concern is that these schemes could lead customers to make payments that they had not expected, and also that they may discourage switching behaviour. The Department for Business, Energy & Industrial Strategy want to encourage more customers to  switch suppliers where they can get a better deal, for example in banking and the energy market.
The Consumer Rights Act 2015 already provides regulators with the power to agree undertakings with businesses or seek orders from the court forcing traders to compensate consumers disadvantaged as a result of a breach of consumer law, or requiring traders to change the conduct of their business (or take other corrective steps).
The new civil fines which are now being proposed would provide an additional tool for enforcers, and would also ensure that other legal options are available when criminal prosecution is not an option (for example, in respect of unfair consumer terms).
The green paper that has just been announced is likely to develop these ideas and encourage further public discussion, before formal legislative proposals are made.
The Customer Service Blog will be presenting our views to the Government during the consultation period. We would like to know what you think, and we will happily pass on any comments you have to the Government during this process.

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