Consumer Protection Law and the Applicant Experience

SPA Event Wales- Cardiff University, 2 December 2015

Janet Graham, Director of SPA

What is SPA and what do we do?

SPA promotes fair admissions and access to higher education in the UK by developing and leading on good practice in the recruitment and selection of students.

We undertake, evaluate and commission research to support evidence-based good practice in HE admissions throughout the UK

SPA has core funding from UCAS and support from HEFCW and is independent and objective in the work and support it provides

We are not auditors, regulators, lawyers, a professional body, charity or membership organisation

We are a small team providing admissions expertise, advice, resources, events etc. for you, generally free at the point of use for all UK HE providers.

The CMA advice for HEPs focused on compliance with the following consumer protection legislation:Consumer Protection from Unfair Trading Regulations 2008 (CPR)Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCR)Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR)

Plus Consumer Rights Act 2015 (from October)

This is existing law

The CMA view

Consumer protection law : Why now?

Consumer protection law will generally apply to the relationship between HEPs and undergraduate students.

Consumer Protection Law has become more important because o A greater proportion of HE providers’ funding is coming

directly from students, particularly in England

AND students are in a weak consumer position because

o For most students deciding what and where to study will be a ‘one-off’ decision.

HE providers are ‘traders’ and students are ‘consumers’ for the purposes of the legislation.

The CMA view

Consumer law sets out minimum standards that apply to various aspects of an HE provider’s dealings with applicants/ students to help ensure students:o get the information they need to make informed choices

about what and where to studyo are treated fairly during their studieso are equipped to resolve problems if things go wrong

HE providers who do not meet their obligations may be in breach of consumer law and risk enforcement action

Students/applicants can take independent legal action

CMA’s enforcement powers

Consumer Protection Regulations (CPRs)

The CPRs cover ‘invitations to purchase’, most of which relates to what is referred to as ‘THE MATERIAL INFORMATION’ about the goods or services.

Unfair trading that is prohibitedadvertising goods that don't existomitting material information needed for an informed decisionproviding material information in an obscure or untimely manneraggressive sales tacticsnot following up a commitment to a code of practice.

Consumer Contracts Regulations (CCRs)

The CCRs cover the contract itself, most of which relates to what is referred to as ‘THE PRE-CONTRACT INFORMATION’.

Information requirements a description of the goods or service, including how long any commitment will last the total price of the goods or servicedetails of any right to cancel - including a cancellation form information about the seller.

Cancelling Right to cancel up to 14 days from day you receive your goods.

Unfair Terms Regulations (UTCCRs)

The UTCCRs cover the requirements of fairness in contract terms.

RequirementsNo significant imbalance in the parties’ rights and obligations to the detriment of the consumerMade in ‘good faith’Expressed in plain, intelligible language.

Information - student research and application

HE providers must give prospective students the ‘material information’ they need to make an informed decision before they apply, including:

o course content, structure and how it will be deliveredo total course costs (including any extra costs students are likely to incur)

o non-course-related information, e.g. accommodation options o any important and surprising rules and regulations o any information that is likely to affect a prospective student’s

decision.

Information - student research and application

Information must be o accurate, complete, clear, unambiguous, up front, timely and

accessible, e.g. website, prospectus, open days.

This applies whoever provides the information on behalf of the HEP and whether it is written, visual or spoken

The person providing it could be paid or unpaid e.g. student volunteer/ ambassador

It must be easily accessible before the applicant applies, i.e. not behind an applicant portal

HE providers must provide information about how to complain.

Information – examples of breaching obligations

Not providing 'material’ information and/or not providing it at the right time

information is difficult to find and access e.g. it is on a website that is hard to navigate or held in a number of different places

failing to provide information about extra course costs up front failing to make clear that certain modules must be completed for

the award to be accredited only making important information available to prospective

students after they have applied failing to make prospective students aware at the earliest

opportunity of changes to information contained in a prospectus

The recent ‘Which? Report’

Higher education: Audit of providers’ website information provision. Which? Investigation report 23 October 2015

‘Which?’ looked at a sample of 50 HEPs in September 2015

76% failed to provide at least one piece of material information

Report did not receive good press (in HEPs) for its lack of thoroughness and timing – but the Consumers Association has the right to do this

However some emerging best practice and encouraging signs that HEPs are complying or working towards complying.

Offer

When an applicant accepts an offer of a place they enter a contract with the HE provider

At this stage HEPs must:obtain applicants’ agreement to change anything stated at the information - student research and application stage

provide the pre-contract information in a ‘durable medium’o list core modules of the programmeo the duration of the programme/courseo state fees & other costs and/or how these will be calculated o how increases will be calculatedo specify number and type of contact hours Continued..

Offer

oDraw attention to your full terms and conditions, make these accessible and flag particularly important terms oMake clear what could change in the future, if you anticipate that some things might change, this should be made clear in the pre-contract information by setting out what could change, when and how.

All this to be provided in a ‘durable medium’*Give applicants notice of their 14-day right to cancel.

See SPA website: Facts from Eversheds and CMA on consumer protection and durable medium.

Full and fair terms and conditions

These include your general regulations and other regulatory documents. They must strike a balance between your rights and obligations and those of students. For example:

no wide discretion to vary course content or increase feesno limitation on liability for non-performanceno blanket assignment of intellectual property rights to the Universityno academic sanctions for accommodation debtseasily located and accessed by students and applicantsimportant or surprising terms highlightedwritten in plain and intelligible language.

Terms and Conditions

Terms should be easily located and accessible to prospective students

Important or surprising terms should be specifically brought to prospective students attention before they accept an offer

Terms should be written in plain and intelligible language Terms should strike a fair balance between the rights and

obligations of the provider and student they should not allow a wide discretion to change important

aspects of the course or fees

•Providers will not be able to enforce terms and conditions which are found to be unfair – a disclaimer does not make it fair

Complaint handling

Provide information about separate complaints procedures for applicants and current students

Ensure complaints procedures are fair, easily located, have clear timescales and are accessible to both applicants and students; for applicants they must be available before they accept an offer

Provide clear and accurate information in writing and (where applicable) verbally. e.g. where a course is in partnership with or awarded by another HEP be clear where responsibility for complaints lies

Complaints procedures are more likely to comply with consumer law where they follow any guidelines published by a third party complaint scheme (OIA for students, but doesn’t cover applicants).

Complaint handling

Ensure that your staff are trained in and follow your complaint handling procedures and timescales in practice.

See: SPA good practice statement on applicant complaints and

appeals, October 2015

QAA UK Quality Code for Higher Education - Chapter B2: Recruitment, selection and admission to higher education, October 2013

Consumer Protection – Risk AnalysisIf an HE provider failed to fulfil the terms of a contract and a cohort of 100 final year undergraduate students sought refunds of their fees and costs:

Fees for three years: 100 x 3 x £9,000 = £2,700,000Living costs for 3 x 9 months: 100 x 3 x £10,000 = £3,000,000

Total = £5,700,000

(N.B. This doesn’t include damages for time lost and impact on future career earnings.)

Inherent strategic risk: likelihood = likely? impact = moderate?Control actions required to reduce likelihoodFor Welsh students – the fee the student has a loan for could be refunded, what about the government element? (not a consumer protection issue)

Possible Strategic ControlsManaging ChangePlanning ahead e.g. 5 years for UG core curriculum (from prospectus to final year delivery = 5 years)Planning ahead: courses validated before advertise Setting and respecting deadlines for changeBeing aware of what might change and why (is it reasonable) and communicating it well internally and externally.

Marketing informationRaising awareness of corporate responsibility for what is said about your educational services offering Web governance – locating and resourcing a central authority to remove inaccurate information.

Possible New Operational Controls

Offers to include essential pre-contract information: e.g. modular content, full statement of fees and charges, contact time etc.

Reviewing ‘full terms and conditions’ and retaining cohort versions: e.g. cohort versions of general regulations, date stamped for start of course

Providing terms and conditions in ‘durable media’

Managing expectations of service levels

Mechanisms to ensure a consistency in approach among your different departments and faculties as well as the centre.

Possible New Operational Controls

Being clear about the roles of different marketing channels: prospectus, course database, departmental web pages

Cleaning up/ removing old information on the web and ensuring consistency of information across sources, one version of the truth

Management of social media: clarifying the distinction between individual accounts and institutional accounts

Staff awareness, understanding and following both the CMA advice and your own internal procedures and practices, as HEPs are responsible for the actions of their staff, who are acting in the university’s or college’s name or on its behalf.

What next?

Each HEP will need to act, you can’t ignore it: non-compliance could result in enforcement action by the CMA

The CMA is conducting a compliance check and has been since 1 October 2015

Universities UK are working with the CMA, the Academic Registrars Council, the Association of University Legal Practitioners, SPA and others to raise awareness of the issues

The new Consumer Rights Act in force from 1 October 2015, makes it easier for authorities to investigate and prosecute.

Consumer Protection Obligations

How do you ensure: You give prospective students the clear, accurate and timely information Your terms and conditions are fair, accurate and accessibleYour complaint handling processes are accessible, clear and fair?

If you are confident,

oWhat do you do?oHow did you plan/agree it?oHow are you reviewing it?

If you aren’t confident,

oWhat more could you do?oHow can you plan/agree it?oHow should you review it?

…. thank you

Risk Points - Identifying and tackling key areas of risk for institutions arising from the “new” consumer law framework

2 December 2015

Siân Jones-Davies: sianjones-davies@eversheds.comKerry Boxall: kerryboxall@eversheds.com

−CMA: UK higher education providers – advice on consumer protection law Helping you comply with your obligations 12 March 2015

−Which?: Higher education: a review of providers’ rights to change courses 5 February 2015

−Which?: Higher education: audit of providers’ website information provision October 2015

Useful references

−Fitting the consumer legal framework to the tertiary education sector

−Students as consumers - pedagogical v legal debate

−Allaying concerns (not a death knell for the sector)

−What’s new (and what isn’t!)

−Focus on areas addressed in the CMA guidance

−Consumer legal framework applies to private providers and further education colleges, too

Introductory remarks

−Essence of fairness

−Keep in mind also:• natural justice• Article 8 ECHR• Data Protection Act 1998

−A positive student experience

−QAA Quality Code – Part C and cause for concern scheme

−OIA, Welsh Ministers (cf SFA)

The wider student regulatory framework

−A changing consumer law framework…

• the Consumer Protection from Unfair Trading Regulations 2008• the Consumer Contracts Regulations 2013• the Consumer Rights Act 2015

Consumer law framework – key legislation

−Material information

−Changes to material information

−Minimum cohort numbers

−Courses subject to accreditation/validation

−Use of disclaimers

Key areas of risk (1) – marketing stage

−Accessible student terms – summary T&C’s?

−Incorporation of regulations, policies, procedures, etc.

−1 or 2 (or more) contracts (and when made)?

−Suite of contractual documents (incl. prospectus, course specification, offer letter, T&Cs, etc)

−Schedule 2 information

−What is durable medium?

−Students’ consent to changes

−Conditions of contract

−Managing communications with students

−Use of agents

Key areas of risk (2) – application stage

−A new contract?

−Students’ consent to changes

−Withdrawal or cancellation of courses – liability concerns

Key areas of risk (3) – enrolment/registration stage

−Variation clauses

−Students’ consent to changes

−Fairness of terms, including:• liability clauses• refund policies• termination provisions • international students v home students

Key areas of risk (4) – post enrolment/registration stage

−Raised awareness (and expectations!) – CMA’s review of the (HE) sector now underway!

−View holistically – how to engage your institution at every level

−A lot of this isn’t new!

−Meet head-on and proactively

Concluding remarks

eversheds.com©2015 Eversheds LLPEversheds LLP is a limited liability partnership

eversheds.com©2015 Eversheds LLPEversheds LLP is a limited liability partnership

Kerry, Siân and Janet

Consumer Protection: Cardiff University’s response - a case study

Professor Patricia Price, Pro Vice-Chancellor, Student Experience & Academic Standards, and Simon Wright, Academic Registrar

Tricia and Simon

LUNCH

Group discussion

Reflecting on what you have learnt this morning, working in small groups, please:

1. Identify at least one issue and a solution

2. Identify at least one area of good practice from around the table

These could cover•Material information in a ‘durable’ medium•T&Cs including ‘surprising’ or ‘unusual’ terms •Changes to programmes /modules•HEP staff & student ambassadors – who needs to know what?

…. thank you