Rip-off firms face big f ines in crackdown on small print

FIRMS that mislead customers with confusing small print could face huge fines under plans to be unveiled in next week’s Budget.

It will see them targeted if they use impenetrable terms and conditions to tie consumers into long contracts or unexpected fees.

Treasury sources said they want to limit the length of conditions for services such as mobile phone contracts, which can often run to 40,000 words.

Chancellor Philip Hammond is also expected to announce a crackdown on firms that trap customers in rolling subscriptions that renew automatically. Millions are stung each year by such deals, after having been lured in with a free trial.

New rules will ensure firms give proper notice of an intention to renew a subscription, offering the chance to cancel. Mr Hammond will introduce the measures in Wednesday’s Budget among changes targeting companies that rip off or mislead consumers.

The Chancellor is expected to tighten his grip on public finances as he prepares the economy for divorce proceedings from the EU.

Treasury sources said he had ruled out a ‘giveaway’ Budget, even though forecasts are expected to show a sharp growth upgrade and lower than anticipated borrowing.

Experts predict higher tax receipts will help Mr Hammond undershoot his borrow- ing target, with analysts pencilling in a £45billion windfall in the next five years.

But the Chancellor is said to be nervous that triggering Article 50 this month could spark a slowdown. He has told MPs: ‘There is no pot of money under my desk.’

However, he is thought to be planning extra spending on the most urgent priorities, such as helping to alleviate the social care crisis; and modest progress on meeting Tory manifesto pledges to raise tax thresholds south of the Border. Powers will be given to watchdogs such as the Competition and Markets Authority to seek fines against firms that break consumer protection law.

Tory Business Secretary Greg Clark will introduce the changes in a Consumer Green Paper.

Ministers are concerned that customers can end up trapped after they sign up to a paid-for service without intending to, for example when a paid subscription starts automatically after a free trial. The Citizens Advice service estimates two million consumers each year have problems cancelling subscriptions.

Officials said terms and conditions often contain acronyms and legal or financial jargon that put people off reading them.

Gillian Guy of Citizens Advice said: ‘Subscription traps are one of the many nasty surprises that can be hidden in the small print.

‘Firms are bamboozling consumers with lengthy terms and conditions.’