Consumer Rights Bill

Baroness Crawley Excerpts

Wednesday 22nd October 2014 Grand Committee

[Baroness Neville-Rolfe]

My Lords, I am afraid that you have also heard a lot of my voice. I was hoping for some Divisions to give us a rest. Perhaps the Committee would allow me first to discuss Clause 51 in general and then talk about the amendment. The right in this clause is a backstop for consumers and traders. It is an important provision but, in many cases, will not be engaged. This is because, in most cases, a contract will set out the price for the service. In many cases, the trader will do this out of good will or best practice. However, there is also a legal requirement for many traders to give this information.

For contracts covered by our old friend the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, traders must provide information about the price before the consumer is bound by the contract. If the price cannot be calculated in advance then, where the regulations apply, the trader has to provide information on how the price is to be calculated. The information requirements under these regulations may also cover delivery charges and other costs, and traders are prevented from charging any costs additional to the payment for the trader’s main obligation unless the consumer expressly agrees to that additional payment.

For services outside the scope of the regulations, other regimes apply—for example, the comprehensive system of regulation overseen by the FCA. There is a very clear principle there that all communications must be “fair, clear and not misleading”. The noble Baroness, Lady Drake, raised the question of longer-run, ongoing fees and charges. Certainly I have found that with my ISAs, which I have now had to stop, the providers have got much better in recent years at saying what the charges and costs are. Maybe that is the effect of some of these regulations.

There will also be a very small number of other cases—where the service is outside the scope of these regulations and they are not covered by other requirements—where the trader does not provide information about the price. Clause 51 protects consumers and traders in that small number of cases, in that the consumer will have to pay the trader,

“a reasonable price … and no more”.

This clause is about protecting those consumers.

Amendment 49B was debated at great length in the other place. The point was made that the information listed in this amendment is needed for the consumer to assess what is a reasonable price. I agree with that. The consumer should have this information, and possibly more, to assess what they are buying. However, this clause is a backstop for the very few cases where the price or the method of calculating it has not been agreed in advance.

The noble Baronesses, Lady Hayter and Lady Drake, talked about extra costs being added after the event. I have a graphic vision of the noble Lord, Lord Stevenson, landing safely, I hope, after his Ryanair flight. I would just add to the debate that the Advertising Standards Authority takes action on misleading prices. Firms must advertise the full price, including compulsory costs. There may be a case to be made here, although the business model of some airlines is to have low core prices, from which we benefit, and then to charge add-ons, which the very organised can avoid. However, the consumer must have agreed to the additional payment before entering into the contract. If not, the regulations are clear that the consumer does not have to pay. If the consumer does pay, the money may be reimbursed.

To conclude, our view is that there is already legislation in place to ensure that consumers have clear and accurate price information and that Clause 51 does what we are seeking to achieve. In the light of those explanations, I ask the noble Baroness to withdraw the amendment.

[Baroness Crawley (Lab)]

To go back to the Minister’s point about the fairness and the reasonableness that have to be met, given my noble friend’s example of our noble friend and his famous holiday, would it be fair on him as a consumer to have to prioritise the availability of a printer when he looks to having a holiday? Surely the priorities will be pleasure, climate and the type of hotel or holiday accommodation, and not necessarily there being a printer so that he can print out his boarding pass. That is not fair on him as a consumer.

[Baroness Neville-Rolfe]

I thank the noble Baroness, Lady Crawley, for her intervention and for bringing the whole issue to life to an even greater extent. While I am waiting for a bit of advice, I would say that there are different business models. I used to go abroad on business and I got quite frustrated when I could not print out my boarding pass. Some airlines allow you just to show the boarding pass on your phone or your iPad. That has obviously been a great step forward.

On fairness, airlines are a competitive industry. If consumers do not like the deal that the airlines are giving then, to some extent, we vote with our feet. I have explained the frustration that I have had and how I dealt with it. It is not obvious to me how you could resolve this under the general heading of fairness. There are advantages and disadvantages to the way that services are supplied, and this is perhaps something for us to contemplate.