Education e-briefing: CMA publish education sector compliance review findings

• United Kingdom

• Education - Briefings

28-07-2016

In March 2015, the Competition and Markets Authority (“CMA”) published its consumer protection law advice to UK higher education providers. It also announced that it would be undertaking a compliance review of the sector in light of its advice. On 22 July 2016, the CMA published a report setting out its findings (the “Report”). In an open letter to the sector, the CMA’s senior consumer director, Nisha Arora, has summarised the findings of the Report and outlined the actions that the CMA expects higher education providers to take following the publication of the Report.

Key findings of the review

Although the Report acknowledges that good progress has been made by many institutions and that their awareness of consumer protection law obligations has increased significantly, the CMA stresses that some institutions still have work to do in order to ensure that they are complying fully with such legal obligations.

The Report identifies the following positive steps taken by many institutions:

• removal of imposition of academic sanctions for non-academic debt;

• giving clear and upfront information to students on fees and additional costs;

• dealing more clearly with possible changes to fees and programmes.

Whilst the CMA recognises that positive action is being taken on a number of areas, it also observed that many institutions may be failing to ensure their student contracts are fully compliant. In particular, the Report identified a number of contractual provisions used by institutions in their student contracts, including:

• terms allowing the institutions to have wide discretion to vary tuition fees;

• provisions giving institutions broad rights to cancel or vary courses;

• establishment of complaints processes that could deter students from raising grievances.

The CMA also expressed concern over the length of time that it is taking some institutions to complete their compliance reviews and implement any necessary changes. Given that the CMA’s 2015 advice was published over a year ago, the CMA urges institutions to ensure that all required changes are finalised and implemented as a matter of urgency.

What does all of this mean for higher education providers?

The findings of the Report and the issuance of Ms Arora’s letter are further indications of the seriousness with which the CMA is treating the issue of consumer protection law compliance within the higher education sector. It expects institutions to make any changes necessary to ensure that their terms and general practices comply with consumer protection law, and encourages institutions to engage their staff to promote greater awareness of the institution’s obligations in this regard.

The CMA has made it clear that it expects all higher education providers (which includes both higher education private providers and further education colleges) to comply with consumer protection law, and that if they are unsure of their obligations in this regard then they should take appropriate legal advice.