OFT wants 'no surprises' in small print of contracts
Consumers should expect "no unwelcome surprises" in the small print of contracts, a regulator has said.
One in five people experienced a problem with contracts in the past year, the Office of Fair Trading (OFT) found during an investigation into the clarity of contracts and small print.
It said 70% of its consumer workload related to contracts.
Contracts for telecoms and internet access caused the most problems, the OFT found.
"Consumer law is not there to protect the careless or the over-hasty," said Heather Clayton, of the OFT's consumer group.
"This report reconciles the need for small print with the real-life behaviour of consumers [who] should be free to focus on the main elements of the deal, confident that there will be no unwelcome surprises in the small print."
The OFT has not named and shamed any companies flouting the law at this stage.
The investigation, which began in February 2010, studied how well people understood typical contracts and small print.
It also looked into the differences in contracts being offered to people buying online, on the doorstep after a sales pitch, or on the telephone.
The regulator estimated that "a few billion pounds" was lost to consumers every year as a result of unclear or misleading contracts.
It could not "legislate away" small print, according to Ms Clayton, but it stressed that small print should not hide things that affected the headline price.
The OFT's Mary Starks, who was the author of the report, said: "People should be able to concentrate on the main elements of the deal, not worry about small print traps."
However, it was clear that many people did not read the small print. The survey, of 4,000 people, found that only quarter of those asked did so in detail.
"Many rely on the reputation of the business they deal with for good treatment," Ms Starks said.
Among the 32 sectors studied in the investigation, telecoms and internet access were the most problematic.
This was followed by contracts about home entertainment deals, deliveries, home improvement, travel and mobile phones.
The OFT has previously studied contracts in the following cases:
- The guarantee of seats for games for those holding a season ticket for a football club
- Letting agents' fees, payable if a tenant renews a contract, which highlighted the issue of businesses profiting from small print charges
- Cancellation terms on gym contracts
The regulator hopes to use these examples as a blueprint for other businesses. This could mean that information from the small print is transferred into the body of a contract, or more explanation is given about certain words or phrases.
Businesses should also make clear the length of any fixed-term deal - such as for a mobile phone contract - and how easy it was for customers to break this contract, the OFT said.
The Plain English Campaign has previously said that it is a consumer's right to be offered a contract that can be read, understood and acted upon after the first time of reading.
Other consumer groups have also called for contracts - including small print - to be clearer, especially for the vulnerable and those who have difficulty seeing.
However, the OFT's investigation did not conclude that small print was generally written in a typeface that was too small to read.
Those aged under 30 had more problems with contracts than the over 50s, it found.
It did discover that the quality of the paper a contract was printed on was important. The thinner the paper, the less likely people were to read the contract in detail.
Financial companies, such as those offering loans, have regularly faced criticism for terms and conditions being "hidden" in small print.
However, this sector was not covered in detail during the investigation.