The fee increases problem is about adverts as well as contracts

This isn’t just an issue for home undergraduates in England. Providers levying fee increases between academic years by relying on potentially unlawful contractual clauses elsewhere in the UK are covered by the same laws – and wherever the provider, this matters in relation to uncapped fees too.

As I explained here, there’s two things going on. First, the contract (which can consist of other information than the thing called “contract” or “terms and conditions”) has to enable a fee increase. But that contract has to be in and of itself be lawful.

If it turns out that the University of Placechester’s vague “we reserve the right to increase your fees in subsequent years” term wasn’t good enough yet it relied on it to extract an increase from international UGs unlikely to be able to exercise a right of exit in practice (having signed for accommodation well before they knew the following year’s price), they may well be due a refund.

And it’s not just about contract terms. It’s also about advertising.

Earlier this year the Advertising Standards Authority (ASA) ruled against a raft of UK telecoms providers for failing to clearly disclose mid-contract price increases in adverts, which it found caused consumer confusion and potential financial harm.

The key rule is Rule 3: Misleading Advertising of the CAP Code. It imposes obligations to prevent adverts from misleading consumers through false information, omissions, or ambiguous presentations.

BT advertised fixed monthly prices without clearly indicating that prices could increase mid-contract – so consumers believed that their prices would remain constant throughout the contract. EE only used small print to disclose price increases, which contradicted the main price claims – so consumers couldn’t understand the true cost of their contracts.

Virgin Media misled consumers by implying fixed prices that were actually subject to change, O2 and TalkTalk failed to make the terms of price increases sufficiently prominent, and PlusNet failed to clearly communicate the conditions under which prices could rise.

That PlusNet ruling is worth a look. A Plusnet webpage in May 2024 advertised “Cash-saving Full Fibre broadband deals” starting at £24.99/month with no activation fee, alongside a note, “Increases 31 March.” Smaller text stated prices rise annually on 31 March by the Consumer Price Index (CPI) rate plus 3.9%. After entering a postcode, a page displayed various broadband packages with details on speed, cost, contract length, and price increase information. At the bottom, under “Here’s the legal bit,” the page clarified that prices would increase annually by CPI + 3.9% and provided hyperlinks to full terms and a guide.

That is a hell of a lot more detail on when, and how, a mid-contract price hike would apply than most universities I’ve seen. But the ASA still found against.

A complainant questioned whether Plusnet’s presentation of mid-contract price increases was misleading. Plusnet said they had immediately clarified the price increase on the postcode checker webpage and included detailed qualifications in the same panel. They argued ASA guidance supported linking to price rise information below pricing claims but chose instead to place the information above the broadband package details for better visibility. Plusnet thought this approach made the text sufficiently prominent and complied with ASA guidance, negating the need for an asterisk link.

Guidance says that information about mid-contract price increases is essential for consumers to make informed decisions, requiring it to be presented clearly and prominently in advertising. The guidance advised against using asterisks or links leading to information more than one step removed from the price claim. The ASA assessed an ad featuring the claim “Award winning packages from just £24.99 a month” on the postcode checker webpage, followed by broadband package details and price increase notices on the next page. While the ads indicated prices were fixed until 31 March, they did not clarify how or by what means charges would change afterwards.

Mid-contract price increases of inflation plus 3.9% each March was material information for consumers – and while both webpages mentioned the 31 March price increase, the text did not clarify the nature of the increase, and the statement “increases 31 March” was unclear in context. Although further information about the price rise was included on the pages, the details on the postcode checker webpage were in significantly smaller text, placed away from the headline price, and positioned beneath the postcode input box, making it easily overlooked. As a result, the information was not presented clearly or prominently.

The ASA also reviewed the qualification at the bottom of the broadband packages webpage under “Here’s the legal bit,” which detailed that prices would increase each March from 2025 by inflation plus 3.9%. The ASA found that this material information was not included in the package listings and was not given equal prominence to the price claims, making it unclear. Its placement at the bottom of the page also risked being overlooked by consumers who did not scroll down. As the mid-contract price increases were not presented clearly, it found the ad was misleading and in breach of CAP Code rules 3.1, 3.3, 3.10, 3.17, and 3.18.

I wouldn’t panic too much. The ASA can order the removal or amendment of misleading or non-compliant adverts, it can request search engines to remove or restrict the visibility of ads that breach regulations, or offenders can face sanctions such as referral to Trading Standards for legal action.

It does all pose a classic little tactics conundrum this. If a university now takes steps to tidy up its Ts and Cs and advertising, that does make it look like it knows there’s a problem with what it’s doing now. If it leaves it as is in order to front out “we think we’re compliant”, if it’s not that prolongs and extends risks.

Full marks, by the way, to the university that says “it is vital that you budget for fee increases in subsequent years” and then doesn’t say on that webpage what the scale of those increases is likely to be. Even if they were to find the Ts and Cs that point to inflation (without specifying RPI, RPIX or CPI, OBR projections of any of those or a month that the measure will be taken from) is it really reasonable to ask anyone student to predict inflation 3-4 years out?