A Consumer Law Report Criticises Hidden Charges

A number of legal reforms were proposed by the Law Commission and the Scottish Law Commission. The intention of these reforms is to protect consumers from unfair charges in contracts.

A report was released today due to which report, courts should have the power to rule on the fairness of prices in cases where they have been hidden away in the small print.

Courts now have the possibility to assess when the terms of the contract are fair and when they are not, but are not allowed to interfere when talking about the actual price.

The suggested reforms will give consumers the option to complain of unfair hidden costs.

These proposals will affect companies offering different kinds of services- from mobile phone contracts to airline tickets.

If prices are clear they will be able to set their own prices. The courts, however, would be allowed to intervene when they find unclear phrasing leading to additional fees or jargon which confuses consumers.

Many companies are in fact tempted to fill their contracts with hidden charges which makes them look as if they offer better deals than their competitors.

According to this report the current law makes it almost impossible for consumers to seek redress.

David Hertzell, the project’s commissioner lead for the Law Commission, said: “The current law is baffling – so much so that consumers and regulators are reluctant to challenge unfair charges.”

Both companies and customers now suffer from the unclearness of the law.

Another proposal of the Commission’s report is on the terms of purchased software. According to it there must be serious changes in the terms to which consumers agree when installing software they have recently bought.

These terms are often full of legal jargon so that consumers are almost never able to find out what exactly they are signing up for

The Legal Stop values its customers and strives to provide the highest quality legal documents and document drafting possible, without any hidden charges.


HMRC vs. the Public Accounts Committee – Round 1

HMRC needs to think about new, tougher measures for businesses, which fail to pay tax in the UK. They are called upon to do it by MPs from the Public Accounts Committee. The current line raised some concerns, due to the recent tax avoidance schemes applied by major multinational companies, such as Amazon and Google, which have paid small tax to the UK, regardless of the huge turn over they have made.

As we have already announced, tax avoidance schemes seem to be very common among multinational companies. A great example is Starbucks for example. According to the researches they have made over #400m in the UK, however as they pay royalties to a sister branch in the Netherlands, for using the brand, they paid no corporation fee in the UK, despite the huge turnover.

After revealing the schemes, a number of other big companies have come under heavy fines. HMRC was criticised for failing to manage the case and ensure the companies pay what they are required to pay in the UK.

“These global companies are making money in the UK,” said Margaret Hodge, chairwoman of the Public Accounts Committee. “All we are saying is that if you have economic activities in the UK you are making profits and tax is payable on that.”

She says that the HMRC should be more “aggressive and assertive”, when it comes to fighting tax avoidance schemes, which might hurt the UK economics.

On the other hand, the HMRC replied back that all multinational companies with UK branches, pay the tax with accordance to the current laws.

Despite this, however, Chancellor George Osborne is set to announce details of a £154m fund intended to assist in dealing with tax issues relating to the affairs of large corporations and wealthier people.