Increased Regulatory Focus on Consumer Law and Fee Transparency in Higher Education
I. Recent developments underscore the need for higher education providers to ensure compliance with consumer protection legislation, particularly in relation to the clarity and presentation of tuition fees and associated costs.
II. Many institutions face challenges when seeking to increase fees for continuing students. Legal advice in this area frequently reveals deficiencies in contract formation, including instances where absolute clear provisions are either not effectively copied into student contracts and/or are drafted with insufficient precision. Importantly, consumer law obligations are engaged from the outset of your student journey, well before an offer is accepted and/or a contract is formed. Therefore, all pre contractual information whether presented online and/or in printed materials must be accurate, unambiguous, and not misleading through omission. This is especially important in relation to tuition fees, the potential for fee increases, and any other compulsory charges.
III. These obligations will become more strict under the Digital Markets, Competition and Consumers Act 2024 [DMCCA], which introduces new requirements for pricing transparency. The Competition and Markets Authority’s [CMA] draft guidance, if adopted in its current form, would apply these standards to all costs placed upon students including tuition, accommodation, and other mandatory costs. There have been proposed a prohibition of partitioned pricing, where component costs are disclosed without stating a total. This may require institutions to disclose the full cost of any course, instead of providing figures on a per annual basis.
IV. The DMCCA also introduces a strict liability offence for failure to comply with certain pricing transparency requirements, thus increasing institutional risk. The obligations particularly relate to invitations to purchase, a term the CMA has previously interpreted widely to include course advertisements, web pages, and prospectuses.
V From these developments, higher education providers are suggested to review both their contractual documentation and all pre contractual communications to ensure alignment with evolving consumer protection standards.
Consumer Law Update [Part 1]
Increased Regulatory Focus on Consumer Law and Fee Transparency in Higher Education
I. Recent developments underscore the need for higher education providers to ensure compliance with consumer protection legislation, particularly in relation to the clarity and presentation of tuition fees and associated costs.
II. Many institutions face challenges when seeking to increase fees for continuing students. Legal advice in this area frequently reveals deficiencies in contract formation, including instances where absolute clear provisions are either not effectively copied into student contracts and/or are drafted with insufficient precision. Importantly, consumer law obligations are engaged from the outset of your student journey, well before an offer is accepted and/or a contract is formed. Therefore, all pre contractual information whether presented online and/or in printed materials must be accurate, unambiguous, and not misleading through omission. This is especially important in relation to tuition fees, the potential for fee increases, and any other compulsory charges.
III. These obligations will become more strict under the Digital Markets, Competition and Consumers Act 2024 [DMCCA], which introduces new requirements for pricing transparency. The Competition and Markets Authority’s [CMA] draft guidance, if adopted in its current form, would apply these standards to all costs placed upon students including tuition, accommodation, and other mandatory costs. There have been proposed a prohibition of partitioned pricing, where component costs are disclosed without stating a total. This may require institutions to disclose the full cost of any course, instead of providing figures on a per annual basis.
IV. The DMCCA also introduces a strict liability offence for failure to comply with certain pricing transparency requirements, thus increasing institutional risk. The obligations particularly relate to invitations to purchase, a term the CMA has previously interpreted widely to include course advertisements, web pages, and prospectuses.
V From these developments, higher education providers are suggested to review both their contractual documentation and all pre contractual communications to ensure alignment with evolving consumer protection standards.
Clear Costs - Informed Choices - Compliant Contracts