Companies don't understand the law on unfair deals: CMA

Most UK businesses do not fully understand the law on unfair customer terms such as keeping deposits and enforcing long notice periods, the competition watchdog said.

Many also are not aware that such terms cannot be enforced even if they are part of a contract, the Competition and Markets Authority (CMA) found.

It has launched a campaign to help customers know the rules and help firms avoid breaking the law.

Businesses that do not comply with the law can face enforcement action from trading standards.

The CMA polled 1,250 people representing businesses and found 54% did not fully understand the law on unfair terms.

These can include keeping all of a customer's deposit if they cancel, regardless of the amount the business loses as a result.

Another practice classed as unfair would be using excessively long notice periods tying consumers into contracts.

Companies could also fall foul of the rules by trying to exclude themselves from liability for things that are in fact its fault - such as delays or faulty goods or services.

Paul Latham, CMA director of communications, said: "Consumers have a right to be treated fairly - and businesses need to know that they can't rely on their terms and conditions if they're not fair.

"We know that the majority of businesses want to do the right thing by their customers, but it's worrying that many businesses are not familiar with the law.

"That's why we have launched this campaign to help businesses protect themselves against breaking the law, and against using contracts that they can't enforce."

The CMA is publishing simple videos and guides to explain the rules.