My Lords, I support my noble friend Lady Hayter on Amendment 8 to Clause 11. As we all know, consumer markets are becoming increasingly complex and more and more transactions are conducted online, but we still have the asymmetry of understanding between the trader and the consumer and the consumer’s behavioural bias—both of which we are all familiar with—which can create real incentives for traders to frame and present price information in a way that enhances their chances of a sale rather than enhancing transparency or the protection of the consumer.
For markets and trading to be fair, consumers need to have full and easily accessible knowledge of the real costs of what they are purchasing. I am sure that most people in this Room, including myself, have been attracted into purchasing a bargain only later to discover that it comes with many catches. My husband dines out on humiliating me on my inability to see some of these catches when I am swayed by the attraction of the bargain. These additional costs may be things that we did not see or realise until we were just about to pay or had just paid—or, even worse, did not see until after the event when the receipt has come in and we start noticing these little items that we did not realise were there.
I do a great deal of my purchasing online and there are three things in particular that irritate me. The first is when, just before clicking “OK” to the purchase, the purchaser is asked to confirm that they have read the associated terms and conditions, which are lengthy and dense and may require one to disengage from completing the purchase in order to go back and find them. As we know, the closer that the consumer gets to confirming the purchase, the less likely they are to walk away from it and to come out of the purchase and start again in order to read these dense and lengthy terms and conditions. I and others like me are unlikely to do so and, because we do not, we subsequently find that we have agreed to additional costs. Secondly, as one proceeds through these websites to make the purchase, the default setting may be to add extra items and charges to the purchase of the goods, and this is not made clear—one has to see and recognise that this is happening before one can even negate or delete the
additional costs from the default setting. Thirdly, the headline price that attracted the purchaser to contemplate or initiate the purchase can be significantly different to the final cost, when all the extras are added.
My noble friend mentioned a government reference to a previous National Consumer Council publication. We all know that consumers do not take in too much information when they make a purchase, but the price is so significant and so at the heart of that purchase that it is all the more reason why the trader should be required to provide full details of the total costs. It is incomprehensible that, because the consumer cannot take in too much information, that should become an argument for limiting the obligation on the trader to make sure that the full extent of the costs that can be incurred in making that purchase are made clear before it is made. In fact, the fact that people cannot take on too much information is a compelling reason for making sure that our legislation requires the party who is the trader to make clear what charges the consumer can be expected to be exposed to when they make a purchase.
I am sure that the Government will argue that requiring the visibility of such information may be burdensome to business because of the frequent price changes that they may have to incur. However, given that much of the bad practice takes place online, it is difficult to see how such a requirement can be burdensome. When a price is altered, the trader will have to change their internal processes and internal systems, so having to go that bit further to update a website to make clear what the prices are hardly seems a compelling reason why the consumer should not be protected from not knowing the exposure on costs that they can incur when they make a purchase. Presumably one has the infrastructure of the information set out regarding the additional charges; it is a question of putting the new figure in.