The majority of businesses in the UK don't fully understand rules around 'unfair terms' in relation to consumer rights law, according to the Competition and Markets Authority (CMA).

Unfair terms are those that give businesses an unfair advantage over their customers, often by reducing their rights or ability to complain if things go wrong.

The rules surrounding them are outlined in the Consumer Rights Act 2015 and must be adhered to by all UK businesses.

Under the Consumer Rights Act, all goods and services must be of satisfactory quality, as described, fit for purpose and last a reasonable length of time.

Any terms and conditions in a contract between a business and its customers should not impact on the rights outlined in the act – if they do, they'll be classed as unfair terms.

Unfair terms can include:

  • Companies keeping all of a customer's deposit when they cancel items
  • Using excessively long notice periods that end up tying consumers into a contract for longer than they want
  • Businesses excluding themselves for liability for things that are their fault, such as delays or faulty goods

Research conducted by the CMA found that 54% of businesses in the UK fail to properly understand the rules around unfair terms – 36% said they didn't have a strong grasp of the rules and 18% hadn't heard of them at all, while just 45% claimed to know the rules on unfair terms well.

Meanwhile, despite the fact that 67% of UK businesses sell to customers, only 15% of those surveyed claimed they were familiar with the Consumer Rights Act.

With that in mind, you may want to brush up on your rights by reading our Consumer Rights guide.

To raise awareness, the CMA has launched a series of guides to help customers and businesses understand how to identify unfair terms.

Paul Latham, director of communications at the CMA, says: "Consumers have a right to be treated fairly – and businesses need to know that they can't rely on their terms and conditions if they're not fair.

"We know that the majority of businesses want to do the right thing by their customers, but it's worrying that many businesses are not familiar with the law."