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Moneysupermarket.com Financial Group Limited - The Office of Fair Trading
5: Exclusions of liability 1(b)2c Restrictions on liability (as to type, amount etc) :
Fairness A term is deemed to be unfair under Regulation 5 if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We were concerned that the term was significantly imbalanced and had the potential to cause consumer detriment by inappropriately excluding or limiting the firm’s liability for losses. For example: • Even if a loss suffered by a consumer may have been wholly or partially the responsibility of the firm, paragraph two of the term implied that it was the consumer who incurred the loss, provided the law permitted the firm to exclude liability. • As consumers do not have a choice in the technology that the firm uses, we took the view that paragraph four of the term that excluded the firm’s liability for errors caused by its own technology had the potential to cause significant consumer detriment. • Paragraph six of the term limited the firm’s liability to a maximum amount of £100, which we thought was potentially unfair under the Regulations, as it may not adequately compensate consumers for losses incurred that the firm was liable for.
Reg 7 Plain and intelligible language :
Plainness and intelligibility Regulation 7 requires firms to ensure that terms are expressed in plain, intelligible language. We take the view that contract terms should be drafted clearly so that the consumer is able to understand them and make an informed choice about whether to enter into the contract. In our view, the term that allowed the firm to exclude its liability to the extent permitted by law was likely to be unclear under the Regulations. We took the view that it was not reasonable to expect consumers to understand wording such as ‘is excluded to the fullest extent permissible by law’. The Office of Fair Trading, the primary enforcer of the Regulations, has indicated similar concerns regarding the use of exclusions ‘so far as the law permits’ in paragraph 1.7 of their Unfair Contract Terms Guidance 2008. This also states that such terms are ‘objectionable as being unclear to those without legal knowledge’. In our view, terms that are so unclear that they leave the consumer not understanding what the firm is and is not liable for, may be unfair under Regulation 5 if they cause a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We believed consumers might not understand what the responsibilities and liabilities of the firm were, and as such the term had the potential to cause detriment to consumers.
Other undertakings in Dec 09 for comparison sites -
USwitch
1(b)2c Restrictions on liability (as to type, amount etc) :
A term is deemed to be unfair under Regulation 5 if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We were concerned that the term was significantly imbalanced and had the potential to cause consumer detriment by inappropriately excluding and limiting the firm’s liability for losses. For example: • Clause 8.3 implied that even if a loss suffered by a consumer may have been wholly or partially the responsibility of the firm, such as in relation to ‘the accuracy, completeness, fitness for purpose or legality of any information accessed using the Services’, it was the consumer who incurred the loss. • As consumers do not have a choice in the technology that the firm uses, we took the view that the second part of clause 8.3, which excluded the firm’s liability for errors caused by its own technology, also had the potential to cause significant consumer detriment. • Clause 8.1.2 had the potential to inappropriately exclude the firm’s liability, as it implied that it was the consumer who incurred the loss, provided the law permitted the firm to exclude liability. • Clause 8.2 limited the scope of the firm’s duties to only exercising reasonable care and skill, and therefore did not take into account the firm’s wider obligations under the Regulations, which guard against unfair imbalances in consumer contracts.
Gocompare
1(b)2c Restrictions on liability (as to type, amount etc) :
Fairness A term is deemed to be unfair under Regulation 5 if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We were concerned that the term was significantly imbalanced and had the potential to cause consumer detriment by inappropriately excluding the firm’s liability for losses. For example: • Even if a loss suffered by a consumer may have been wholly or partially the responsibility of the firm, paragraph three of the term implied that it was the consumer who incurred the loss, provided the law permitted the firm to exclude liability. • As consumers do not have a choice in the technology that the firm uses, we took the view that the exclusion of the firm’s liability for errors caused by its own technology had the potential to cause consumer detriment.
5: Exclusions of liability 1(b)2c Restrictions on liability (as to type, amount etc) :
Fairness A term is deemed to be unfair under Regulation 5 if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We were concerned that the term was significantly imbalanced and had the potential to cause consumer detriment by inappropriately excluding or limiting the firm’s liability for losses. For example: • Even if a loss suffered by a consumer may have been wholly or partially the responsibility of the firm, paragraph two of the term implied that it was the consumer who incurred the loss, provided the law permitted the firm to exclude liability. • As consumers do not have a choice in the technology that the firm uses, we took the view that paragraph four of the term that excluded the firm’s liability for errors caused by its own technology had the potential to cause significant consumer detriment. • Paragraph six of the term limited the firm’s liability to a maximum amount of £100, which we thought was potentially unfair under the Regulations, as it may not adequately compensate consumers for losses incurred that the firm was liable for.
Reg 7 Plain and intelligible language :
Plainness and intelligibility Regulation 7 requires firms to ensure that terms are expressed in plain, intelligible language. We take the view that contract terms should be drafted clearly so that the consumer is able to understand them and make an informed choice about whether to enter into the contract. In our view, the term that allowed the firm to exclude its liability to the extent permitted by law was likely to be unclear under the Regulations. We took the view that it was not reasonable to expect consumers to understand wording such as ‘is excluded to the fullest extent permissible by law’. The Office of Fair Trading, the primary enforcer of the Regulations, has indicated similar concerns regarding the use of exclusions ‘so far as the law permits’ in paragraph 1.7 of their Unfair Contract Terms Guidance 2008. This also states that such terms are ‘objectionable as being unclear to those without legal knowledge’. In our view, terms that are so unclear that they leave the consumer not understanding what the firm is and is not liable for, may be unfair under Regulation 5 if they cause a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We believed consumers might not understand what the responsibilities and liabilities of the firm were, and as such the term had the potential to cause detriment to consumers.
Other undertakings in Dec 09 for comparison sites -
- Gocompare.com Limited (Formal Undertaking Obtained effective 15/12/2009)
- Insurancewide.com Services Limited (Formal Undertaking Obtained effective 15/12/2009)
- Moneysupermarket.com Financial Group Limited (Formal Undertaking Obtained effective 15/12/2009)
- uSwitch Limited (Formal Undertaking Obtained effective 15/12/2009)
USwitch
1(b)2c Restrictions on liability (as to type, amount etc) :
A term is deemed to be unfair under Regulation 5 if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We were concerned that the term was significantly imbalanced and had the potential to cause consumer detriment by inappropriately excluding and limiting the firm’s liability for losses. For example: • Clause 8.3 implied that even if a loss suffered by a consumer may have been wholly or partially the responsibility of the firm, such as in relation to ‘the accuracy, completeness, fitness for purpose or legality of any information accessed using the Services’, it was the consumer who incurred the loss. • As consumers do not have a choice in the technology that the firm uses, we took the view that the second part of clause 8.3, which excluded the firm’s liability for errors caused by its own technology, also had the potential to cause significant consumer detriment. • Clause 8.1.2 had the potential to inappropriately exclude the firm’s liability, as it implied that it was the consumer who incurred the loss, provided the law permitted the firm to exclude liability. • Clause 8.2 limited the scope of the firm’s duties to only exercising reasonable care and skill, and therefore did not take into account the firm’s wider obligations under the Regulations, which guard against unfair imbalances in consumer contracts.
Gocompare
1(b)2c Restrictions on liability (as to type, amount etc) :
Fairness A term is deemed to be unfair under Regulation 5 if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract, to the detriment of the consumer. We were concerned that the term was significantly imbalanced and had the potential to cause consumer detriment by inappropriately excluding the firm’s liability for losses. For example: • Even if a loss suffered by a consumer may have been wholly or partially the responsibility of the firm, paragraph three of the term implied that it was the consumer who incurred the loss, provided the law permitted the firm to exclude liability. • As consumers do not have a choice in the technology that the firm uses, we took the view that the exclusion of the firm’s liability for errors caused by its own technology had the potential to cause consumer detriment.
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