Learners as consumers: is the FE sector ready?

It is generally understood within the sector that FE learners are treated as consumers in law, thus benefitting from protection under the Consumer Rights Act 2015 and a number of subsidiary pieces of legislation.

However, most FE colleges do not appear to have fully taken on board the very significant changes which will be required to their learner documentation in order to comply with this new law, in contrast to the HE sector which has spent the past six months in a state of fevered preparation in time for this year’s UCAs round. This was mainly due to the very detailed guidance on students and consumer protection issued in March 2015 by the Competition & Markets Authority (CMA), which followed a previous Call for Information by the Office of Fair Trading (now part of the CMA) and a detailed investigation into the terms and conditions on which universities contract with their students.

Any FE college engaged in providing higher education is expressly caught by the CMA guidance, which is required reading. However, even where colleges do not provide higher education their learners benefit from the same consumer protection rights, and colleges should therefore be reviewing their documents and processes to ensure compliance. We are starting to see instructions from colleges to assist with this process, although it appears that it is not high on the radar for many colleges.

The key obligations

The legal duties can be divided into three main stages: pre-contract, at the point the contract is formed, and the ongoing relationship with the learner.

The contact between a college and a learner is formed when the learner accepts the college’s offer of a place on a course. For most HE courses, this process takes place via the UCAS system some months before the start of the course. For FE provision the position varies, depending on whether the offer is made by post/email or face-to-face at enrolment.

The fact that an offer is ‘conditional’ on the learner obtaining certain grades does not mean that no contract is formed. Rather, the contract is a conditional one, which becomes unconditional (confirmed) once the learner meets the conditions of offer. If the learner does not meet those conditions, the contract comes to an end.

·         Pre contract

This covers information provided to potential applicants via the college’s website and other marketing materials, and at open days.

The Consumer Protection from Unfair Trading Regulations 2008 regulate the information provided to potential applicants to ensure that it is not false or misleading. Examples might include providing (in writing or orally) untrue or misleading information about course content or accreditation, or failing to inform learners about ‘hidden’ costs such as fees for compulsory trips or equipment.

In addition, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) require colleges to provide certain information to applicants before they commit themselves to a place on a course. The rationale behind the CCRs is that applicants should be able to make an informed choice before they enter into a contract with the college.

In essence, the CCRs require the college to provide certain ‘material information’ to applicants, which includes:

·         the main characteristics of the course

·         the duration of the course

·         the total price for the course

·         key terms and conditions applicable to learners

·         details of the college’s complaints procedure

·         the right to cancel and the circumstances for exercising it

The information must be provided to the applicant before the contract is formed. In most cases, this will require the college to send some sort of ‘terms and conditions of offer’ document along with the formal offer of a place, or to provide a link in the offer letter to where the information can be found on the college’s website.

Pre-contract information must be clear and comprehensible, and in an accessible format. It cannot be changed once the offer has been accepted, except with the consent of the learner.

·         Formation of the contract

The CCRs require the college to confirm in a ‘durable medium’ the material information referred to at the offer stage. This means a medium “that allows the consumer to access information directed personally at them, in an unchangeable form, for as long as they might reasonably need it”. This does not include a link to a website that changes, but could include hard copy documents or a personalised ‘cached’ page on the college’s website.

As any information provided in accordance with these requirements becomes a term of the contract, and so it is very important that the college retains it as evidence to defend any potential claims for breach of contract.

In the case of a ‘distance contract’ i.e. one which is made away from the college’s premises, whether by post, email or via the UCAS system, the CCRs also give the learner a right to cancel the contract, without penalty, within 14 days of the day on which the offer of a place is accepted. Any payments made by the learner to the college must be refunded in full. In a case where the course is due to start before the expiry of the 14 day period (as will often be the case for short courses), the learner must make an express request for the college to start providing the course before the expiry of the cancellation period.

·         Ongoing relationship

The Consumer Rights Act 2015 (CRA) came into force last October, consolidating a number of previous pieces of consumer protection legislation including the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999.

The key principles of the CRA are:

·         The college must provide its services with reasonable skill and care and within a reasonable time. It is unlawful for the college to seek to exclude or limit liability for failing to deliver services with reasonable skill and care or within a reasonable time, or for the accuracy of information provided.

·         Anything said or written by or on behalf of the college about its services, which is taken into account by an applicant when making a decision about whether to enter into a contract with the college, will be binding. Changes to this information will be ineffective unless expressly agreed with the learner.

·         The written terms of a consumer contract must be transparent and will be subject to the requirement of ‘fairness’. This means that terms which create a significant imbalance in the rights of the learner versus the college, or which seek to remove rights which the learner would have under the general law, will be unfair. Terms must be written in plain English and any particularly onerous terms must be drawn to the learner’s attention.

The CRA introduced new remedies for consumers, including the right to a repeat performance or a discount in the fees payable. In addition, the legislation strengthened the powers of bodies such as the CMA and Trading Standards to enforce compliance with the CRA and to curb anti-competitive behaviour.

What should colleges be doing?

All colleges should be reviewing their websites and other marketing materials to ensure that they do not contain misleading or incorrect statements, and to ensure that applicants have easy access to material information about the college’s services. If possible, key information should be located in one place rather than in several sets of documents and policies.

In addition, colleges should be looking at their processes and the various interactions they have with applicants and learners throughout the applications and enrolment cycle, to ensure that they are provided with all of the necessary information. Key terms and conditions should be reviewed to ensure that they are fair and balanced.

Particular problem areas include:

·         Printed materials can go out-of-date very quickly – they should all contain a statement that applicants should consult the college’s website for the most up-to-date information

·         Course fees – it is no longer acceptable to state that course fees will be increased on an annual basis. If it is not possible to state the total price for a course, the college should state how any increase will be calculated e.g. based on the rate of inflation, or should specify the maximum increase e.g. 3%

·         Disclaimers – must be very carefully worded, as broad exclusions of liability will be unfair and therefore unenforceable. For example, a statement that the college may cancel a course should specify the circumstances in which that might occur, and a commitment to find the learner a place on an alternative course either at the college or at another provider.

·         Changes to the advertised course content should be minor and driven by necessity, not provider convenience. Learners should understand what notice they will be given of changes and what steps will be taken to minimise disruption, and should have a right to withdraw or switch providers without penalty.

·         Apprenticeships – there may be a tripartite relationship between the college, the learner and the employer, which adds an additional level of complexity when looking at contractual documents.

·         Complaints procedures – procedures should set out clear and reasonable timescales for making and responding to complaints, and should include a fair procedure which gives the learner an adequate opportunity to put forward his/her case to an unbiased decision-maker. 

Joanna Forbes

Legal Director

Education Team

DD: 0121 214 0310

E: joanna.forbes@shma.co.uk

W: www.shma.co.uk 

 

From → General Interest

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