Firms 'must stop' hiding conditions in the small print

The Office of Fair Trading (OFT) has today sent a clear warning to firms as it reveals one in five people experienced problems with contract small print in the last year, with 80% saying it came as a surprise.

The watchdog singles out parts of the housing market and the gym industry for criticism.

It found terms can cause harm when exclusions or fees are hidden from view, while the absence of some key conditions can make it difficult for consumers to understand a deal.

A huge 70% of OFT consumer enforcement cases relate to contract terms and conditions.

Heather Clayton, from the OFT, says: "We all know people don't read the small print of contracts.

"On the other hand, small print is a necessary fact of life and consumer law isn't there to protect the careless or the over-hasty.

"This report reconciles the need for small print with the real life behaviour of consumers and sets out the OFT's expectation that consumers should be free to focus on the main elements of the deal, confident there will be no unwelcome surprises in the small print."

How firms catch you out

The OFT has had to take action against some sectors of the housing market in the past.

Terms offered by firms that buy your home and rent it back to you, aimed at those threatened with repossession, sometimes exposed sellers to unexpected risks, while letting agent charges didn't always correspond to the service provided.

The watchdog recently intervened when gym contracts contained onerous cancellation terms.

MoneySavingExpert.com frequently sees examples of consumers being caught out by hidden conditions.

These include energy contracts that lock users into a new deal soon after an old one expires.

Sometimes, even when they exist, terms are difficult to understand.

When we recently asked the Post Office and Yorkshire Building Society for penalties for withdrawing cash early on their inflation-linked savings even the firms' official spokespeople couldn't give an answer as the charges were so complicated.

MoneySavingExpert.com money analyst Wendy Alcock says: "Although we're often warned to read the small print, the terms can be so unclear that we wouldn't realise if they are going to cause harm, so reading them doesn’t help anyway!

"Terms that may cause detriment should be a prominent part of a deal rather than hidden away."

Further reading/Key links

Fight back: Consumer Rights, Your Financial Rights