THE Office of Fair Trading has singled out 60 package holiday companies which are breaching European Commission and English law through the use of unfair contract terms in their brochures.
The OFT’s head of unfair contract terms unit Ray Woolley said that so far half had been contacted and asked to change their brochure conditions and the remainder will have been contacted by the end of May.
Woolley said other travel companies under scrutiny included 10 travel agencies and five charter airlines.
The travel industry is the latest sector to come under the OFT spotlight as part of its move to see that UK companies are complying with the Unfair Terms in Consumer Contracts Regulations 1994.
These are the laws enacted by the UK Government in order to implement EC directive 93/13 on Unfair Terms in Consumer Contracts.
The OFT is currently the only body charged with enforcement of the regulations, though moves are underway to allow consumer groups such as the Consumers Association to also take action against any companies falling foul of the legislation.
Speaking at the ABTA-organised seminar, Travel Law – avoiding the pitfalls, at the association’s Newman Street headquarters last week, Woolley urged companies to take note of the obligations imposed on them by the regulations.
He explained that even though the regulations had already been part of English law for over three years, up to now the OFT had been focusing on other sectors such as the mobile phone industry.
Among the most common offending brochure terms were those which attempt to exclude an operator’s liability for ‘minor’ changes to the holiday.
Woolley said operators appeared to believe that if a flight change caused a delay of less than 12hrs, then they were covered, but he warned: “What may be minor to you may be significant to your client.”
He said the OFT was also dissatisfied with the way operators sought to retain pre-payments if a holidaymaker cancelled.
According to Woolley, the test of whether a term is unfair is if it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.
“If a term says that ‘we can do more or less what we like’, it is the first in line for scrutiny.
“We appreciate that operators are dependent on others like hotels or chauffeur companies, but you are the person most in control and we are liable to consider unfair any clause that attempts to reduce your responsibility for the actions of your agents,” he added.