The amendment stands in my name and that of my noble friend Lord Stevenson of Balmacara. It seeks to ensure that any binding qualifications to contracts are given equal prominence with other promises made before they become binding on the person signing up. In effect, it is an amendment about small print, about charges that people may incur but which traders may not specify prominently as being part of the cost. In one sense, it is the future-proofing of the issues which my noble friend Lady King just raised, because we are mostly talking about future charges rather than those paid on a one-off fee. Because of those future charges, we want total charges to be displayed prominently prior to the purchase, so that people know exactly what they are paying for and do not later have any nasty surprises.
The amendment states that charges should be given equal prominence. People need to know what they may find hitting them in a year’s time, on the annual renewal. Sometimes, so much information is given to the consumer that it may be there in theory but it is hidden in plain sight. In other words, it may well say that there is a renewal price, but it is in with three or four other paragraphs—but it is binding on the consumer. They need to be given prominence, up with the actual price, rather than hidden in plain sight. That is an issue about which the Financial Services Consumer Panel and others are concerned—that a substantially increased fee that the consumer could not have predicted is suddenly applied at a later date. This is very much in the area of financially complicated services. There may be things which are very obvious to the provider, but may not seem obvious or relevant at the time of the purchase. There may be the possibility of having to pay for change of address: you would not think when you are signing up to something that that meant
anything—you had not meant to move house at that point, or you did not think it would apply to you, but you could suddenly be hit by an additional charge later.
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Without our amendments, some of these add-ons could be counted as part of the advertised price. The problem then is that they cannot later be considered and judged for fairness, because they are seen as the price and therefore excluded from that. Indeed, the chair of the Financial Services Consumer Panel has suggested that, unless there is clarity on what terms and prices are acceptably prominent at the point of purchase, parts of the Bill,
“will be rendered obsolete if firms can simply make all of the main subject matter of their contracts prominent and transparent”,
without these future prices being given that extra fillip.
In the Commons, the Minister said, and we endorse what she said:
“Clearly, hidden charges that people do not know about or that are suddenly included in a contract at a later date could not be considered to have been prominent at the beginning. … If they are not transparent or prominent, they are not protected or exempt from being assessed for fairness. If an organisation hides price terms in the small print or they are not clear to consumers, those price terms would not be considered prominent and so would be assessable for fairness”.—[Official Report, Commons, Consumer Rights Bill Committee, 6/3/14; col. 495.]
We welcome that statement by the Minister in the other place, but we want the Bill to remind providers of it and we want to emphasise to them their responsibility to get this right at the start. We do not want the consumer to have to challenge it later and have it assessed as to whether it is fair. We want providers to state future prices or fees upfront, so they are known before the customer signs up. We want to outlaw bad practice, not simply provide a way of making it good after the event. Let us try to get rid of it altogether. I beg to move.