Consumer law on campus, from a student perspective

Increased student fees have come with increased student scrutiny, and rightfully so. This change comes as the national student body slowly metamorphoses into a mass of consumers demanding value for money.

The rapid privatization of the sector and the changes brought with new regulation could have brought student empowerment, but the reality is less hopeful. Throughout the course of an ongoing project looking at the university regulatory regime and where universities place themselves within it, we have identified discrepancies between regulatory guidance and university practice; the extent of the divergence is so severe that perhaps only the laborious fact-finding power of litigation could prevent us losing sight of the forest for the trees. Yet it’s obvious that the old regulatory system – a hangover from the halcyon days of higher education when regulation was inextricable from disbursement of public funds – wasn’t prepared for change, and the new one does little to address any legacy issues.

Inflationary fee rises

At least 39 universities increased tuition fees in line with inflation for the 2017-18 academic year, when the cap was raised to £9,250. Considerable confusion around the precise mechanism for that fee raise existed as early as 2016. The press widely reported that universities were prospectively advertising increased fees before Parliament finalised the Higher Education and Research Act 2017, despite the existence of ministerial authority to raise fees in line with inflation (pinned to RPI-X) since 2004. But as much as the quirks of higher education law and policy are an obstacle for the press, they can also impede certainty on the institutional level, especially where policy-making meets consumer protection law. When determining the duration of contracts between students and universities, for example, a number of institutions raised the idea – swiftly defeated by the regulator – that fresh contracts might be created every time a student re-enrolls for successive years of study.

On the other hand, the Competition and Markets Authority (CMA) is quite explicit about its expectations of universities in communicating information about fees and course delivery. Yet students are bound by contracts confected from documents such as a university’s terms and conditions through to its prospectuses. The breadth of variance between these documents can make them somewhat incomparable. With the plethora of approaches taken, one has to wonder whether every university has followed the law, or if their contracts are fair. The same can be said of regulation. During the course of our work, we found the avenues open to students for challenging potentially unfair practices amongst this mélange of approaches opaque and difficult, and certainly not as “textbook” as some of the received wisdom in higher education policy makes out.

What follows is an exploration of murky waters occupied by several regulators, a quasi-judicial body, and a government department, none of whom can offer a clear path for students seeking vindication of their rights as consumers.

The regulatory circle

In an attempt to find out how students might find recourse from any practices that they deem incorrect or unfair, the Office of the Independent Adjudicator for Higher Education (OIA) was approached. It was asked how a complaint about the way in which a university raised its fees could be brought forward. Upon initial contact OIA stated that this is an issue outside of its remit. It also requires that a student exhaust a university’s legally required internal complaints procedure before the adjudicator can step in. There is a degree of technical and legal knowledge required here to even begin, though we will return to that. One might think that the CMA, as the competent consumer protection regulator, is responsible for looking at any such complaints. However, the CMA said that it takes a more general approach to markets and doesn’t deal with single complaints, but only “multiple sources of intelligence”. The CMA directed us towards the Consumer Service Helpline. After a long conversation, the advisor admitted that they could not assist us, though a complaint to Trading Standards was sent off. Trading Standards takes the same market-level approach as the CMA. It has also failed to reply or take any action. Finally, a Department for Education (DfE) advisor pointed to the OIA as the body that should be responsible for such complaints.

The DfE advisor noted that they were not trained to deal with such complex inquiries, and instructed us to contact them via an online form. Their reply stated that higher education institutions “are independent and autonomous bodies, they are responsible for the management of their own internal affairs, complying with any relevant legislation, the terms and conditions they offer, and addressing student complaints. If a student is unhappy about any aspect of their experience at that institution, they should formally raise their concerns with their institution direct”, before moving on to the OIA.

Should students try to find formal recourse from the OIA, time is not on their side. A complainant can expect to wait 6 months for a non-binding decision, in addition to time spent exhausting their university’s internal complaints procedure. the OIA’s governing documents and practice indicate that it also uses CMA guidance to make determinations about consumer protection law. The application of that guidance in the sector is inconsistent at best.

As higher education expert David Palfreyman has noted, the absence of standardised contracts between universities and students is a significant barrier to both understanding and enforcing rights across the sector. This fragmentation by institutional discretion is especially curious given the sheer number of professional associations whose aims center on promoting “best practice” and “good governance“. The absence of standardised contracts, although crucial to a regrettable information imbalance in the sector, is a symptom of wider institutional and regulatory mischief.

Compliance or complacence…?

In 2015, Which? undertook an ambitious project to survey compliance in the HE sector, with particular concern for the fairness of course variations including fee rises for continuing students. Its analysis found that 51% of HEIs used terms that are certainly, or likely to be, unfair. Troublingly, 37% of HEIs lacked adequate or clear information. The view from the institution is the opposite: Universities UK’s survey of its members indicated that 98% of institutions are fairly or very confident of compliance with consumer protection law.

UUK’s survey was conducted partially in response to publication of new guidance by the CMA in March 2015. In July 2016, following on from the guidance, the CMA successfully sought undertakings from three universities to refrain from using terms it considered unfair in relation to non-academic debt and tuition fees. These enforcement actions are evidence of how exacting the regulator can be in relation to standards of contractual clarity. Fee rise terms that link future increases to inflation without specifying a verifiable index such as RPI, for example, were determined to be unfair. On the other hand, this high degree of regulatory precision must be accompanied by consistent enforcement scrutiny to achieve sectoral compliance.

Understanding the legacy of non-compliance and changes students have been exposed to, Palfreyman’s article, “unpicking strikes, tuition fees, and (possible) refunds” seems somewhat out of touch with law on the ground as opposed to in the books. To some extent he is correct, but there is a utopian air to his rulebook for the sector. For example, a single aggrieved student cannot simply “go to the local trading standards department”. As outlined, the OIA does not seem prepared to deal with such technicalities either. The resulting gap is unsurprising given that OfS has opted for a hands-off approach to compliance; the nascent regulator confirmed in its regulatory framework that it will require only a self-assessment on consumer protection law compliance.

The Office for Students is billed as the “sole HE regulator in England”, but there is still a variety of other bodies responsible for dealing with peripheral issues with which interested students must become acquainted with if they want to challenge what they see as unfair consumer practices. If the authorial experience of being shuffled between authorities is indicative, students will encounter substantial procedural hurdles in seeking relief.

…or court?

This does of course leave the option of going to court. Case law would influence the approach of all the aforementioned bodies and therefore enhance legal certainty, but litigation is not feasible for the average student. It may therefore be to the good of the many for an interested party with suitable resources to bring a test case concerning fee rises. This would serve two purposes: (1) legitimating or destabilising the CMA’s approach to consumer protection law in the sector and (2) clarifying the scope of institutional discretion around the language used for terms varying tuition fees and course content. A suit related to teaching time lost to strikes would further lend a numerical basis to how teaching is costed in HE. Of course, this supposes an optimistic view of the lawsuit as a regulatory tool: a judgment may breed as much darkness as it dispels.

Although OfS has a broader range of enforcement powers than its predecessors, the points raised above show how its remit is not all encompassing. The goods are not comparable, the information is asymmetric, and our research shows the market is regulated to the extent that students are disempowered consumers navigating an almost Kafkaesque policy frontier. Consumer protection in the HE sector, with its peculiar mix of regulatory overlap and inaction, could be called a kind of “jungle law”.Much work remains to be done by the CMA, OfS, and universities themselves to sustain any hope that clarity will emerge from the thicket.