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Are ALL early closure penalties actually enforceable and lawful?

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  • callum9999
    callum9999 Posts: 4,434 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    uk1 said:
    I've completely missed the "general consumer law" that says all holidays are refundable minus provable costs. When did that become a thing? It certainly isn't reflected in the standard booking conditions of hotels, flights, bus/train tickets/package holidays etc.

    You're correct that the law does take precedent over contact terms, but it's unusual for the industry to continue using these terms as standard when it's been "firmly established" to be illegal.

    Today consumers are routinely cheated out of refunds of deposts in holiday bookings, particularly when dealing with cruise lines many of who are based in The Bahamas or Florida as well as UK ones.  And the Ts&Cs that they publish are enforceable if you are an American because as I said upthread consumers have virtually no protection in the US because politics there is all about corporate favour and there is virtually no consumer protection legislation.  The vast majority of Brits buying a cruise for example who cancel are simply told that when they bought the cruise they were told clearly of cancellation clauses and are therefore bound by them which is simply untrue because of the "unfair consumer contract clauses" enshrined in UK consumer law.  So at this stage the vast majority of consumers are unaware of these rights and give up. So an industry benefits because the majority pay and those that demand full refunds minus nominal costs are quietly dealt with so that it doesn't become a "widely known" right and an industry carries on ensuring that it's customers do not benefit from their rights.
    Basically UK consumers can ignore almost all small print in purchase contracts without in most cases the need to readthem and that are in contention with "fairness" and other general consumer laws.  The whole presumption in UK consumer law is that that contracts has an imbalance of rights intended to wrongly disadvantage consumers and therefore no clauses that do so are enforceable. Also most consumers are short-changed when holiday companies offer compensation for holidays that were not fully as advertised.  As it happens I was the first consumer in the UK to test this in a five day hearing in the 70's when I took a holiday company to court and was effectively awarded the whole cost of a very expensive vacation with a mixed award of both refund and compensation  for as the judge called it "vexation, agrravation and dissapointment" and my case is still used as a prcedent in complex travel claims.
    The consequences of recent consumer law are still very much under appreciated. 
    For example consumers no longer need to prove that the items were faulty at manufacture if they go wrong for example in the first 6 months.  There is a prsumption that if an item breaks within say six months then it is automatically presumed to have been faulty at manufacture and a consumer is entitled to either a repair or full refund - their choice - the obligation being on the merchant to prove it wasn't faulty at manufacturer and perhaps "over-used" or "abused" something almost impossible to do.  You could argue that this might be unfair to the merchant.
    It is also as we all know here enshrined in consumer law under section 75 that a credit card company is equally liable for responsibility for correcting these issues even if all of an expensive purchase wasn't made through the card.  A credit card company has little influence over promises made by holiday companies and general merchants and this might be seen as unfair to the card issuer but clearly favours the consumer.
    This is my pick of one of the most unusual rights that in my experience most merchants and most consumers do not appreciate or understand.  That is  the consquences of having a 14 day cooling off period for purchases not made in retail premises.  Most consumers and many merchants are unaware of this and those that are aware of this in generality are not aware that they need gtive no reason at all for returning an item but the merchant is obligated to provide a full and prompt refund.  Basically the law says that you can order things on line and open and try them as though you were in a shop (and even more ....) and if you decide for any reason whatsoever that you do not want to keep them they can be returned without giving any reasons whatsoever for a full and prompt refund. 
    So if Joe Public for example looks out of his patio doors and decides his patio needs a bit of a power clean, he can if he so wishes order a power washer online, clean his patio and return it used and unsaleable as new within 14 days of arrival for a full refund.  And he can repeat this as often as he wants for most items he purchases with very few exclusions.  This doesn't seem to me to be completely fair to a merchant. So Joe Public might buy and use a vacuum cleaner for a week or two and then find it being offered more cheaply elsewhere - or even see a completely different manufacturer and model he prefers the look of and return it "no questions asked" for a full refund.  In my view it seems that there is often no equivalent cooling off rights offered to consumers with all of their finance purchases.  That was an issue that interested me and I found myself wondering whether it was enforeable if tested.
    It is against this background that I found myself also wondering whether some of the practices of the finance industry are lawful and all practices enforceable and if they were to fuly reflect the realities of consumer protection elsewhere.  I intended no insults to anyone or upset anyone I just fouind the topic interesting and I thought others might also do so.
    I don't see how this remotely answers my question? Which legislation (or interpretation of legislation) allows you to cancel travel contracts without penalty and only paying "nominal costs"? That would be major news. To me, this just reads like you personally think they're unfair clauses that can therefore be struck down as opposed to there actually being any kind of precedent confirming they are.

    Claiming compensation for mis-sold holidays is a completely different thing. The 14 day cooling off period for distance selling is a completely different thing (and I don't agree with the claim that it's not understood by most retailers - it's clearly detailed in the return section of most retailers I use).


  • uk1
    uk1 Posts: 1,862 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    uk1 said:
    I've completely missed the "general consumer law" that says all holidays are refundable minus provable costs. When did that become a thing? It certainly isn't reflected in the standard booking conditions of hotels, flights, bus/train tickets/package holidays etc.

    You're correct that the law does take precedent over contact terms, but it's unusual for the industry to continue using these terms as standard when it's been "firmly established" to be illegal.

    Today consumers are routinely cheated out of refunds of deposts in holiday bookings, particularly when dealing with cruise lines many of who are based in The Bahamas or Florida as well as UK ones.  And the Ts&Cs that they publish are enforceable if you are an American because as I said upthread consumers have virtually no protection in the US because politics there is all about corporate favour and there is virtually no consumer protection legislation.  The vast majority of Brits buying a cruise for example who cancel are simply told that when they bought the cruise they were told clearly of cancellation clauses and are therefore bound by them which is simply untrue because of the "unfair consumer contract clauses" enshrined in UK consumer law.  So at this stage the vast majority of consumers are unaware of these rights and give up. So an industry benefits because the majority pay and those that demand full refunds minus nominal costs are quietly dealt with so that it doesn't become a "widely known" right and an industry carries on ensuring that it's customers do not benefit from their rights.
    Basically UK consumers can ignore almost all small print in purchase contracts without in most cases the need to readthem and that are in contention with "fairness" and other general consumer laws.  The whole presumption in UK consumer law is that that contracts has an imbalance of rights intended to wrongly disadvantage consumers and therefore no clauses that do so are enforceable. Also most consumers are short-changed when holiday companies offer compensation for holidays that were not fully as advertised.  As it happens I was the first consumer in the UK to test this in a five day hearing in the 70's when I took a holiday company to court and was effectively awarded the whole cost of a very expensive vacation with a mixed award of both refund and compensation  for as the judge called it "vexation, agrravation and dissapointment" and my case is still used as a prcedent in complex travel claims.
    The consequences of recent consumer law are still very much under appreciated. 
    For example consumers no longer need to prove that the items were faulty at manufacture if they go wrong for example in the first 6 months.  There is a prsumption that if an item breaks within say six months then it is automatically presumed to have been faulty at manufacture and a consumer is entitled to either a repair or full refund - their choice - the obligation being on the merchant to prove it wasn't faulty at manufacturer and perhaps "over-used" or "abused" something almost impossible to do.  You could argue that this might be unfair to the merchant.
    It is also as we all know here enshrined in consumer law under section 75 that a credit card company is equally liable for responsibility for correcting these issues even if all of an expensive purchase wasn't made through the card.  A credit card company has little influence over promises made by holiday companies and general merchants and this might be seen as unfair to the card issuer but clearly favours the consumer.
    This is my pick of one of the most unusual rights that in my experience most merchants and most consumers do not appreciate or understand.  That is  the consquences of having a 14 day cooling off period for purchases not made in retail premises.  Most consumers and many merchants are unaware of this and those that are aware of this in generality are not aware that they need gtive no reason at all for returning an item but the merchant is obligated to provide a full and prompt refund.  Basically the law says that you can order things on line and open and try them as though you were in a shop (and even more ....) and if you decide for any reason whatsoever that you do not want to keep them they can be returned without giving any reasons whatsoever for a full and prompt refund. 
    So if Joe Public for example looks out of his patio doors and decides his patio needs a bit of a power clean, he can if he so wishes order a power washer online, clean his patio and return it used and unsaleable as new within 14 days of arrival for a full refund.  And he can repeat this as often as he wants for most items he purchases with very few exclusions.  This doesn't seem to me to be completely fair to a merchant. So Joe Public might buy and use a vacuum cleaner for a week or two and then find it being offered more cheaply elsewhere - or even see a completely different manufacturer and model he prefers the look of and return it "no questions asked" for a full refund.  In my view it seems that there is often no equivalent cooling off rights offered to consumers with all of their finance purchases.  That was an issue that interested me and I found myself wondering whether it was enforeable if tested.
    It is against this background that I found myself also wondering whether some of the practices of the finance industry are lawful and all practices enforceable and if they were to fuly reflect the realities of consumer protection elsewhere.  I intended no insults to anyone or upset anyone I just fouind the topic interesting and I thought others might also do so.
    I don't see how this remotely answers my question? Which legislation (or interpretation of legislation) allows you to cancel travel contracts without penalty and only paying "nominal costs"? That would be major news. To me, this just reads like you personally think they're unfair clauses that can therefore be struck down as opposed to there actually being any kind of precedent confirming they are.

    Claiming compensation for mis-sold holidays is a completely different thing. The 14 day cooling off period for distance selling is a completely different thing (and I don't agree with the claim that it's not understood by most retailers - it's clearly detailed in the return section of most retailers I use).


    Yes they are two different topics.  That is exactly how I have expressed it.

    If the topic of cancellation is of genuine interest to you I suggest you spend your time researching and study the Competition and Authority’s guidance amongst several authorities on holiday cancellation penalties.  In simple essence a travel company can only claim for an actual loss not a punitive penalty. 

    In the case of a misrepresentation then you could claim for a full or partial refund and compensation for inconvenience and disappointment. 

    Two separate and different situations. 


  • uk1
    uk1 Posts: 1,862 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 13 October 2022 at 2:12PM
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    I think it even more important that ISAs should have exactly the same terms as bonds and savings accounts and vice versa
    But ISAs are governed by very specific legislation that doesn't apply to other financial products - you may object to that but that's how the law is at the moment!

    uk1 said:
    I do believe that a consumer could be penalised so that they have made no gain or earned any interest whilst they have dithered and perhaps pay an administration cost-recovery fee but they should not have what in my view is a grossly severe and unfair loss of capital as well. So there is a fair amount of loss all around.
    So are you accepting the principle that early access penalties could exceed interest earned and therefore impact on capital returned, but just contending that some (all?) providers levy charges that you feel are too high, or are you asserting that savers who change their minds should always get back no less than they paid in?
    Yes I am accepting that.

    I am very clearly asserting that penalties can be the loss of all accrued interest earned and a loss of a recoverable administration fee after a common cooling off period will eat into capital.  

    I am arguing against that this could exceed by the amount of an admin fee exceed the capital loss.  But I am also saying that I believe the admin loss is unlikely to ever be defensible much above pennies. 

    I am arguing against that the penalty should ever be greater than the total accrued interest and administration cost should then erode capital loss.  I am arguing that anything over and above this is  unbalanced and therefore unfair. If you get my drift.
    I'm not convinced that your arguments are as clear you perhaps believe, and would see 'drift' as being an appropriate word for the way that the arguments seem to be progressing, not that there's anything necessarily wrong with that in the context of an evolving debate of course!  Your edits to that post do seem to have left some inconsistent wording though.

    Anyway, to return to one of your earlier points, fairness is quite subjective, so if you're asserting that the scale of penalties is currently unfair, what is your specific proposal to resolve that unfairness?  If you're suggesting, for example, that customers should always get back no less than they paid in, that would penalise institutions in low-interest conditions (remember them?!) where the penalty might fall well short of realistic actual admin costs to enact early withdrawal, so that could be argued to be unfair.

    As with your holiday scenario, my recollection is that companies are expected to charge a genuine estimate of their losses, but of course in the real world it isn't as simple as that, and the effort required to assess such losses on a case by case basis would be prohibitive, so they all publish standardised schedules of cancellation charges (x% charged if within y days of departure, etc), which inherently will rarely correspond to the actual losses on any given transaction, so despite the understandable desire for fairness, that doesn't necessarily mean it's achievable.

    Ultimately it all comes down to the balloon-squeezing aspect discussed earlier, i.e. that if institutions have onerous terms imposed on them, they'll simply seek compensation elsewhere, e.g. via lower interest rates or whatever.
    There are various remedies short of money claim and the courts but that is the current main way of recourse.  This is normally settled before a hearing because it is in the travel companies best interest to settle individual cases than for them to go to court and potentially appearing in The Daily Mail for example where even more people will then become aware of their rights.  This approach filters and settles claims from determined consumers and allows travel companies to retain charges that have been unchallenged from the much greater majority. That sadly is real life.

  • eskbanker
    eskbanker Posts: 37,280 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    uk1 said:
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    I think it even more important that ISAs should have exactly the same terms as bonds and savings accounts and vice versa
    But ISAs are governed by very specific legislation that doesn't apply to other financial products - you may object to that but that's how the law is at the moment!

    uk1 said:
    I do believe that a consumer could be penalised so that they have made no gain or earned any interest whilst they have dithered and perhaps pay an administration cost-recovery fee but they should not have what in my view is a grossly severe and unfair loss of capital as well. So there is a fair amount of loss all around.
    So are you accepting the principle that early access penalties could exceed interest earned and therefore impact on capital returned, but just contending that some (all?) providers levy charges that you feel are too high, or are you asserting that savers who change their minds should always get back no less than they paid in?
    Yes I am accepting that.

    I am very clearly asserting that penalties can be the loss of all accrued interest earned and a loss of a recoverable administration fee after a common cooling off period will eat into capital.  

    I am arguing against that this could exceed by the amount of an admin fee exceed the capital loss.  But I am also saying that I believe the admin loss is unlikely to ever be defensible much above pennies. 

    I am arguing against that the penalty should ever be greater than the total accrued interest and administration cost should then erode capital loss.  I am arguing that anything over and above this is  unbalanced and therefore unfair. If you get my drift.
    I'm not convinced that your arguments are as clear you perhaps believe, and would see 'drift' as being an appropriate word for the way that the arguments seem to be progressing, not that there's anything necessarily wrong with that in the context of an evolving debate of course!  Your edits to that post do seem to have left some inconsistent wording though.

    Anyway, to return to one of your earlier points, fairness is quite subjective, so if you're asserting that the scale of penalties is currently unfair, what is your specific proposal to resolve that unfairness?  If you're suggesting, for example, that customers should always get back no less than they paid in, that would penalise institutions in low-interest conditions (remember them?!) where the penalty might fall well short of realistic actual admin costs to enact early withdrawal, so that could be argued to be unfair.

    As with your holiday scenario, my recollection is that companies are expected to charge a genuine estimate of their losses, but of course in the real world it isn't as simple as that, and the effort required to assess such losses on a case by case basis would be prohibitive, so they all publish standardised schedules of cancellation charges (x% charged if within y days of departure, etc), which inherently will rarely correspond to the actual losses on any given transaction, so despite the understandable desire for fairness, that doesn't necessarily mean it's achievable.

    Ultimately it all comes down to the balloon-squeezing aspect discussed earlier, i.e. that if institutions have onerous terms imposed on them, they'll simply seek compensation elsewhere, e.g. via lower interest rates or whatever.
    There are various remedies short of money claim and the courts but that is the current main way of recourse.  This is normally settled before a hearing because it is in the travel companies best interest to settle individual cases than for them to go to court and potentially appearing in The Daily Mail for example where even more people will then become aware of their rights.  This approach filters and settles claims from determined consumers and allows travel companies to retain charges that have been unchallenged from the much greater majority. That sadly is real life.
    I wasn't referring to retrospective remedies but to specific legislative or regulatory changes that you'd suggest that would proactively compel financial institutions (and/or other organisations in the wider context) to act in the way you'd be happy with, rather than having to rely on CMA guidance or other interpretations of existing legislation, i.e. a way of avoiding the subjectivity arising from the nebulous concept of 'fairness'.
  • callum9999
    callum9999 Posts: 4,434 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    uk1 said:
    uk1 said:
    I've completely missed the "general consumer law" that says all holidays are refundable minus provable costs. When did that become a thing? It certainly isn't reflected in the standard booking conditions of hotels, flights, bus/train tickets/package holidays etc.

    You're correct that the law does take precedent over contact terms, but it's unusual for the industry to continue using these terms as standard when it's been "firmly established" to be illegal.

    Today consumers are routinely cheated out of refunds of deposts in holiday bookings, particularly when dealing with cruise lines many of who are based in The Bahamas or Florida as well as UK ones.  And the Ts&Cs that they publish are enforceable if you are an American because as I said upthread consumers have virtually no protection in the US because politics there is all about corporate favour and there is virtually no consumer protection legislation.  The vast majority of Brits buying a cruise for example who cancel are simply told that when they bought the cruise they were told clearly of cancellation clauses and are therefore bound by them which is simply untrue because of the "unfair consumer contract clauses" enshrined in UK consumer law.  So at this stage the vast majority of consumers are unaware of these rights and give up. So an industry benefits because the majority pay and those that demand full refunds minus nominal costs are quietly dealt with so that it doesn't become a "widely known" right and an industry carries on ensuring that it's customers do not benefit from their rights.
    Basically UK consumers can ignore almost all small print in purchase contracts without in most cases the need to readthem and that are in contention with "fairness" and other general consumer laws.  The whole presumption in UK consumer law is that that contracts has an imbalance of rights intended to wrongly disadvantage consumers and therefore no clauses that do so are enforceable. Also most consumers are short-changed when holiday companies offer compensation for holidays that were not fully as advertised.  As it happens I was the first consumer in the UK to test this in a five day hearing in the 70's when I took a holiday company to court and was effectively awarded the whole cost of a very expensive vacation with a mixed award of both refund and compensation  for as the judge called it "vexation, agrravation and dissapointment" and my case is still used as a prcedent in complex travel claims.
    The consequences of recent consumer law are still very much under appreciated. 
    For example consumers no longer need to prove that the items were faulty at manufacture if they go wrong for example in the first 6 months.  There is a prsumption that if an item breaks within say six months then it is automatically presumed to have been faulty at manufacture and a consumer is entitled to either a repair or full refund - their choice - the obligation being on the merchant to prove it wasn't faulty at manufacturer and perhaps "over-used" or "abused" something almost impossible to do.  You could argue that this might be unfair to the merchant.
    It is also as we all know here enshrined in consumer law under section 75 that a credit card company is equally liable for responsibility for correcting these issues even if all of an expensive purchase wasn't made through the card.  A credit card company has little influence over promises made by holiday companies and general merchants and this might be seen as unfair to the card issuer but clearly favours the consumer.
    This is my pick of one of the most unusual rights that in my experience most merchants and most consumers do not appreciate or understand.  That is  the consquences of having a 14 day cooling off period for purchases not made in retail premises.  Most consumers and many merchants are unaware of this and those that are aware of this in generality are not aware that they need gtive no reason at all for returning an item but the merchant is obligated to provide a full and prompt refund.  Basically the law says that you can order things on line and open and try them as though you were in a shop (and even more ....) and if you decide for any reason whatsoever that you do not want to keep them they can be returned without giving any reasons whatsoever for a full and prompt refund. 
    So if Joe Public for example looks out of his patio doors and decides his patio needs a bit of a power clean, he can if he so wishes order a power washer online, clean his patio and return it used and unsaleable as new within 14 days of arrival for a full refund.  And he can repeat this as often as he wants for most items he purchases with very few exclusions.  This doesn't seem to me to be completely fair to a merchant. So Joe Public might buy and use a vacuum cleaner for a week or two and then find it being offered more cheaply elsewhere - or even see a completely different manufacturer and model he prefers the look of and return it "no questions asked" for a full refund.  In my view it seems that there is often no equivalent cooling off rights offered to consumers with all of their finance purchases.  That was an issue that interested me and I found myself wondering whether it was enforeable if tested.
    It is against this background that I found myself also wondering whether some of the practices of the finance industry are lawful and all practices enforceable and if they were to fuly reflect the realities of consumer protection elsewhere.  I intended no insults to anyone or upset anyone I just fouind the topic interesting and I thought others might also do so.
    I don't see how this remotely answers my question? Which legislation (or interpretation of legislation) allows you to cancel travel contracts without penalty and only paying "nominal costs"? That would be major news. To me, this just reads like you personally think they're unfair clauses that can therefore be struck down as opposed to there actually being any kind of precedent confirming they are.

    Claiming compensation for mis-sold holidays is a completely different thing. The 14 day cooling off period for distance selling is a completely different thing (and I don't agree with the claim that it's not understood by most retailers - it's clearly detailed in the return section of most retailers I use).


    Yes they are two different topics.  That is exactly how I have expressed it.

    If the topic of cancellation is of genuine interest to you I suggest you spend your time researching and study the Competition and Authority’s guidance amongst several authorities on holiday cancellation penalties.  In simple essence a travel company can only claim for an actual loss not a punitive penalty. 

    In the case of a misrepresentation then you could claim for a full or partial refund and compensation for inconvenience and disappointment. 

    Two separate and different situations. 


    I have no idea why you're adding in all this irrelevant stuff that I haven't remotely challenged and gives no weight at all to your initial claim?

    I searched for that term and found absolutely nothing. Your reluctance (refusal?) to cite your sources doesn't fill me with confidence that your interpretation is accurate!
  • uk1
    uk1 Posts: 1,862 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 13 October 2022 at 2:37PM
    uk1 said:
    uk1 said:
    I've completely missed the "general consumer law" that says all holidays are refundable minus provable costs. When did that become a thing? It certainly isn't reflected in the standard booking conditions of hotels, flights, bus/train tickets/package holidays etc.

    You're correct that the law does take precedent over contact terms, but it's unusual for the industry to continue using these terms as standard when it's been "firmly established" to be illegal.

    Today consumers are routinely cheated out of refunds of deposts in holiday bookings, particularly when dealing with cruise lines many of who are based in The Bahamas or Florida as well as UK ones.  And the Ts&Cs that they publish are enforceable if you are an American because as I said upthread consumers have virtually no protection in the US because politics there is all about corporate favour and there is virtually no consumer protection legislation.  The vast majority of Brits buying a cruise for example who cancel are simply told that when they bought the cruise they were told clearly of cancellation clauses and are therefore bound by them which is simply untrue because of the "unfair consumer contract clauses" enshrined in UK consumer law.  So at this stage the vast majority of consumers are unaware of these rights and give up. So an industry benefits because the majority pay and those that demand full refunds minus nominal costs are quietly dealt with so that it doesn't become a "widely known" right and an industry carries on ensuring that it's customers do not benefit from their rights.
    Basically UK consumers can ignore almost all small print in purchase contracts without in most cases the need to readthem and that are in contention with "fairness" and other general consumer laws.  The whole presumption in UK consumer law is that that contracts has an imbalance of rights intended to wrongly disadvantage consumers and therefore no clauses that do so are enforceable. Also most consumers are short-changed when holiday companies offer compensation for holidays that were not fully as advertised.  As it happens I was the first consumer in the UK to test this in a five day hearing in the 70's when I took a holiday company to court and was effectively awarded the whole cost of a very expensive vacation with a mixed award of both refund and compensation  for as the judge called it "vexation, agrravation and dissapointment" and my case is still used as a prcedent in complex travel claims.
    The consequences of recent consumer law are still very much under appreciated. 
    For example consumers no longer need to prove that the items were faulty at manufacture if they go wrong for example in the first 6 months.  There is a prsumption that if an item breaks within say six months then it is automatically presumed to have been faulty at manufacture and a consumer is entitled to either a repair or full refund - their choice - the obligation being on the merchant to prove it wasn't faulty at manufacturer and perhaps "over-used" or "abused" something almost impossible to do.  You could argue that this might be unfair to the merchant.
    It is also as we all know here enshrined in consumer law under section 75 that a credit card company is equally liable for responsibility for correcting these issues even if all of an expensive purchase wasn't made through the card.  A credit card company has little influence over promises made by holiday companies and general merchants and this might be seen as unfair to the card issuer but clearly favours the consumer.
    This is my pick of one of the most unusual rights that in my experience most merchants and most consumers do not appreciate or understand.  That is  the consquences of having a 14 day cooling off period for purchases not made in retail premises.  Most consumers and many merchants are unaware of this and those that are aware of this in generality are not aware that they need gtive no reason at all for returning an item but the merchant is obligated to provide a full and prompt refund.  Basically the law says that you can order things on line and open and try them as though you were in a shop (and even more ....) and if you decide for any reason whatsoever that you do not want to keep them they can be returned without giving any reasons whatsoever for a full and prompt refund. 
    So if Joe Public for example looks out of his patio doors and decides his patio needs a bit of a power clean, he can if he so wishes order a power washer online, clean his patio and return it used and unsaleable as new within 14 days of arrival for a full refund.  And he can repeat this as often as he wants for most items he purchases with very few exclusions.  This doesn't seem to me to be completely fair to a merchant. So Joe Public might buy and use a vacuum cleaner for a week or two and then find it being offered more cheaply elsewhere - or even see a completely different manufacturer and model he prefers the look of and return it "no questions asked" for a full refund.  In my view it seems that there is often no equivalent cooling off rights offered to consumers with all of their finance purchases.  That was an issue that interested me and I found myself wondering whether it was enforeable if tested.
    It is against this background that I found myself also wondering whether some of the practices of the finance industry are lawful and all practices enforceable and if they were to fuly reflect the realities of consumer protection elsewhere.  I intended no insults to anyone or upset anyone I just fouind the topic interesting and I thought others might also do so.
    I don't see how this remotely answers my question? Which legislation (or interpretation of legislation) allows you to cancel travel contracts without penalty and only paying "nominal costs"? That would be major news. To me, this just reads like you personally think they're unfair clauses that can therefore be struck down as opposed to there actually being any kind of precedent confirming they are.

    Claiming compensation for mis-sold holidays is a completely different thing. The 14 day cooling off period for distance selling is a completely different thing (and I don't agree with the claim that it's not understood by most retailers - it's clearly detailed in the return section of most retailers I use).


    Yes they are two different topics.  That is exactly how I have expressed it.

    If the topic of cancellation is of genuine interest to you I suggest you spend your time researching and study the Competition and Authority’s guidance amongst several authorities on holiday cancellation penalties.  In simple essence a travel company can only claim for an actual loss not a punitive penalty. 

    In the case of a misrepresentation then you could claim for a full or partial refund and compensation for inconvenience and disappointment. 

    Two separate and different situations. 


    I have no idea why you're adding in all this irrelevant stuff that I haven't remotely challenged and gives no weight at all to your initial claim?

    I searched for that term and found absolutely nothing. Your reluctance (refusal?) to cite your sources doesn't fill me with confidence that your interpretation is accurate!

    Fair enough, that's a dissapointment that I'll sadly have to learn to live with. :)
  • callum9999
    callum9999 Posts: 4,434 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 13 October 2022 at 2:55PM
    uk1 said:
    uk1 said:
    uk1 said:
    I've completely missed the "general consumer law" that says all holidays are refundable minus provable costs. When did that become a thing? It certainly isn't reflected in the standard booking conditions of hotels, flights, bus/train tickets/package holidays etc.

    You're correct that the law does take precedent over contact terms, but it's unusual for the industry to continue using these terms as standard when it's been "firmly established" to be illegal.

    Today consumers are routinely cheated out of refunds of deposts in holiday bookings, particularly when dealing with cruise lines many of who are based in The Bahamas or Florida as well as UK ones.  And the Ts&Cs that they publish are enforceable if you are an American because as I said upthread consumers have virtually no protection in the US because politics there is all about corporate favour and there is virtually no consumer protection legislation.  The vast majority of Brits buying a cruise for example who cancel are simply told that when they bought the cruise they were told clearly of cancellation clauses and are therefore bound by them which is simply untrue because of the "unfair consumer contract clauses" enshrined in UK consumer law.  So at this stage the vast majority of consumers are unaware of these rights and give up. So an industry benefits because the majority pay and those that demand full refunds minus nominal costs are quietly dealt with so that it doesn't become a "widely known" right and an industry carries on ensuring that it's customers do not benefit from their rights.
    Basically UK consumers can ignore almost all small print in purchase contracts without in most cases the need to readthem and that are in contention with "fairness" and other general consumer laws.  The whole presumption in UK consumer law is that that contracts has an imbalance of rights intended to wrongly disadvantage consumers and therefore no clauses that do so are enforceable. Also most consumers are short-changed when holiday companies offer compensation for holidays that were not fully as advertised.  As it happens I was the first consumer in the UK to test this in a five day hearing in the 70's when I took a holiday company to court and was effectively awarded the whole cost of a very expensive vacation with a mixed award of both refund and compensation  for as the judge called it "vexation, agrravation and dissapointment" and my case is still used as a prcedent in complex travel claims.
    The consequences of recent consumer law are still very much under appreciated. 
    For example consumers no longer need to prove that the items were faulty at manufacture if they go wrong for example in the first 6 months.  There is a prsumption that if an item breaks within say six months then it is automatically presumed to have been faulty at manufacture and a consumer is entitled to either a repair or full refund - their choice - the obligation being on the merchant to prove it wasn't faulty at manufacturer and perhaps "over-used" or "abused" something almost impossible to do.  You could argue that this might be unfair to the merchant.
    It is also as we all know here enshrined in consumer law under section 75 that a credit card company is equally liable for responsibility for correcting these issues even if all of an expensive purchase wasn't made through the card.  A credit card company has little influence over promises made by holiday companies and general merchants and this might be seen as unfair to the card issuer but clearly favours the consumer.
    This is my pick of one of the most unusual rights that in my experience most merchants and most consumers do not appreciate or understand.  That is  the consquences of having a 14 day cooling off period for purchases not made in retail premises.  Most consumers and many merchants are unaware of this and those that are aware of this in generality are not aware that they need gtive no reason at all for returning an item but the merchant is obligated to provide a full and prompt refund.  Basically the law says that you can order things on line and open and try them as though you were in a shop (and even more ....) and if you decide for any reason whatsoever that you do not want to keep them they can be returned without giving any reasons whatsoever for a full and prompt refund. 
    So if Joe Public for example looks out of his patio doors and decides his patio needs a bit of a power clean, he can if he so wishes order a power washer online, clean his patio and return it used and unsaleable as new within 14 days of arrival for a full refund.  And he can repeat this as often as he wants for most items he purchases with very few exclusions.  This doesn't seem to me to be completely fair to a merchant. So Joe Public might buy and use a vacuum cleaner for a week or two and then find it being offered more cheaply elsewhere - or even see a completely different manufacturer and model he prefers the look of and return it "no questions asked" for a full refund.  In my view it seems that there is often no equivalent cooling off rights offered to consumers with all of their finance purchases.  That was an issue that interested me and I found myself wondering whether it was enforeable if tested.
    It is against this background that I found myself also wondering whether some of the practices of the finance industry are lawful and all practices enforceable and if they were to fuly reflect the realities of consumer protection elsewhere.  I intended no insults to anyone or upset anyone I just fouind the topic interesting and I thought others might also do so.
    I don't see how this remotely answers my question? Which legislation (or interpretation of legislation) allows you to cancel travel contracts without penalty and only paying "nominal costs"? That would be major news. To me, this just reads like you personally think they're unfair clauses that can therefore be struck down as opposed to there actually being any kind of precedent confirming they are.

    Claiming compensation for mis-sold holidays is a completely different thing. The 14 day cooling off period for distance selling is a completely different thing (and I don't agree with the claim that it's not understood by most retailers - it's clearly detailed in the return section of most retailers I use).


    Yes they are two different topics.  That is exactly how I have expressed it.

    If the topic of cancellation is of genuine interest to you I suggest you spend your time researching and study the Competition and Authority’s guidance amongst several authorities on holiday cancellation penalties.  In simple essence a travel company can only claim for an actual loss not a punitive penalty. 

    In the case of a misrepresentation then you could claim for a full or partial refund and compensation for inconvenience and disappointment. 

    Two separate and different situations. 


    I have no idea why you're adding in all this irrelevant stuff that I haven't remotely challenged and gives no weight at all to your initial claim?

    I searched for that term and found absolutely nothing. Your reluctance (refusal?) to cite your sources doesn't fill me with confidence that your interpretation is accurate!

    Fair enough, that's a dissapointment that I'll sadly have to learn to live with. :)
    That's a shame. Although it was clearly made up, a demonstrable right to cancel non-refundable holidays without penalty would have been groundbreaking.
  • uk1
    uk1 Posts: 1,862 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 13 October 2022 at 2:59PM
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    I think it even more important that ISAs should have exactly the same terms as bonds and savings accounts and vice versa
    But ISAs are governed by very specific legislation that doesn't apply to other financial products - you may object to that but that's how the law is at the moment!

    uk1 said:
    I do believe that a consumer could be penalised so that they have made no gain or earned any interest whilst they have dithered and perhaps pay an administration cost-recovery fee but they should not have what in my view is a grossly severe and unfair loss of capital as well. So there is a fair amount of loss all around.
    So are you accepting the principle that early access penalties could exceed interest earned and therefore impact on capital returned, but just contending that some (all?) providers levy charges that you feel are too high, or are you asserting that savers who change their minds should always get back no less than they paid in?
    Yes I am accepting that.

    I am very clearly asserting that penalties can be the loss of all accrued interest earned and a loss of a recoverable administration fee after a common cooling off period will eat into capital.  

    I am arguing against that this could exceed by the amount of an admin fee exceed the capital loss.  But I am also saying that I believe the admin loss is unlikely to ever be defensible much above pennies. 

    I am arguing against that the penalty should ever be greater than the total accrued interest and administration cost should then erode capital loss.  I am arguing that anything over and above this is  unbalanced and therefore unfair. If you get my drift.
    I'm not convinced that your arguments are as clear you perhaps believe, and would see 'drift' as being an appropriate word for the way that the arguments seem to be progressing, not that there's anything necessarily wrong with that in the context of an evolving debate of course!  Your edits to that post do seem to have left some inconsistent wording though.

    Anyway, to return to one of your earlier points, fairness is quite subjective, so if you're asserting that the scale of penalties is currently unfair, what is your specific proposal to resolve that unfairness?  If you're suggesting, for example, that customers should always get back no less than they paid in, that would penalise institutions in low-interest conditions (remember them?!) where the penalty might fall well short of realistic actual admin costs to enact early withdrawal, so that could be argued to be unfair.

    As with your holiday scenario, my recollection is that companies are expected to charge a genuine estimate of their losses, but of course in the real world it isn't as simple as that, and the effort required to assess such losses on a case by case basis would be prohibitive, so they all publish standardised schedules of cancellation charges (x% charged if within y days of departure, etc), which inherently will rarely correspond to the actual losses on any given transaction, so despite the understandable desire for fairness, that doesn't necessarily mean it's achievable.

    Ultimately it all comes down to the balloon-squeezing aspect discussed earlier, i.e. that if institutions have onerous terms imposed on them, they'll simply seek compensation elsewhere, e.g. via lower interest rates or whatever.
    There are various remedies short of money claim and the courts but that is the current main way of recourse.  This is normally settled before a hearing because it is in the travel companies best interest to settle individual cases than for them to go to court and potentially appearing in The Daily Mail for example where even more people will then become aware of their rights.  This approach filters and settles claims from determined consumers and allows travel companies to retain charges that have been unchallenged from the much greater majority. That sadly is real life.
    I wasn't referring to retrospective remedies but to specific legislative or regulatory changes that you'd suggest that would proactively compel financial institutions (and/or other organisations in the wider context) to act in the way you'd be happy with, rather than having to rely on CMA guidance or other interpretations of existing legislation, i.e. a way of avoiding the subjectivity arising from the nebulous concept of 'fairness'.

    There isn't any that is sufficiently specific compared to general consumer law.  There should be.  In my opinion.  That was my point. 
  • eskbanker
    eskbanker Posts: 37,280 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    uk1 said:
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    I think it even more important that ISAs should have exactly the same terms as bonds and savings accounts and vice versa
    But ISAs are governed by very specific legislation that doesn't apply to other financial products - you may object to that but that's how the law is at the moment!

    uk1 said:
    I do believe that a consumer could be penalised so that they have made no gain or earned any interest whilst they have dithered and perhaps pay an administration cost-recovery fee but they should not have what in my view is a grossly severe and unfair loss of capital as well. So there is a fair amount of loss all around.
    So are you accepting the principle that early access penalties could exceed interest earned and therefore impact on capital returned, but just contending that some (all?) providers levy charges that you feel are too high, or are you asserting that savers who change their minds should always get back no less than they paid in?
    Yes I am accepting that.

    I am very clearly asserting that penalties can be the loss of all accrued interest earned and a loss of a recoverable administration fee after a common cooling off period will eat into capital.  

    I am arguing against that this could exceed by the amount of an admin fee exceed the capital loss.  But I am also saying that I believe the admin loss is unlikely to ever be defensible much above pennies. 

    I am arguing against that the penalty should ever be greater than the total accrued interest and administration cost should then erode capital loss.  I am arguing that anything over and above this is  unbalanced and therefore unfair. If you get my drift.
    I'm not convinced that your arguments are as clear you perhaps believe, and would see 'drift' as being an appropriate word for the way that the arguments seem to be progressing, not that there's anything necessarily wrong with that in the context of an evolving debate of course!  Your edits to that post do seem to have left some inconsistent wording though.

    Anyway, to return to one of your earlier points, fairness is quite subjective, so if you're asserting that the scale of penalties is currently unfair, what is your specific proposal to resolve that unfairness?  If you're suggesting, for example, that customers should always get back no less than they paid in, that would penalise institutions in low-interest conditions (remember them?!) where the penalty might fall well short of realistic actual admin costs to enact early withdrawal, so that could be argued to be unfair.

    As with your holiday scenario, my recollection is that companies are expected to charge a genuine estimate of their losses, but of course in the real world it isn't as simple as that, and the effort required to assess such losses on a case by case basis would be prohibitive, so they all publish standardised schedules of cancellation charges (x% charged if within y days of departure, etc), which inherently will rarely correspond to the actual losses on any given transaction, so despite the understandable desire for fairness, that doesn't necessarily mean it's achievable.

    Ultimately it all comes down to the balloon-squeezing aspect discussed earlier, i.e. that if institutions have onerous terms imposed on them, they'll simply seek compensation elsewhere, e.g. via lower interest rates or whatever.
    There are various remedies short of money claim and the courts but that is the current main way of recourse.  This is normally settled before a hearing because it is in the travel companies best interest to settle individual cases than for them to go to court and potentially appearing in The Daily Mail for example where even more people will then become aware of their rights.  This approach filters and settles claims from determined consumers and allows travel companies to retain charges that have been unchallenged from the much greater majority. That sadly is real life.
    I wasn't referring to retrospective remedies but to specific legislative or regulatory changes that you'd suggest that would proactively compel financial institutions (and/or other organisations in the wider context) to act in the way you'd be happy with, rather than having to rely on CMA guidance or other interpretations of existing legislation, i.e. a way of avoiding the subjectivity arising from the nebulous concept of 'fairness'.
    There isn't any that is sufficiently specific compared to general consumer law.  There should be.  In my opinion.  That was my point. 
    Yes, I know there isn't any, so my point was to ask you specifically what you'd propose to fill that gap, i.e. are you proposing removal of the financial services exemption from the cancellation legislation, or some new law or financial regulation to make everything seem fairer to you, etc?  You've described what you see as the problem, so I'm suggesting that you define your preferred solution, or are you just taking it as far as 'I don't think there should be any capital loss permissible when cancelling fixed term products'?
  • uk1
    uk1 Posts: 1,862 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 13 October 2022 at 4:08PM
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    eskbanker said:
    uk1 said:
    I think it even more important that ISAs should have exactly the same terms as bonds and savings accounts and vice versa
    But ISAs are governed by very specific legislation that doesn't apply to other financial products - you may object to that but that's how the law is at the moment!

    uk1 said:
    I do believe that a consumer could be penalised so that they have made no gain or earned any interest whilst they have dithered and perhaps pay an administration cost-recovery fee but they should not have what in my view is a grossly severe and unfair loss of capital as well. So there is a fair amount of loss all around.
    So are you accepting the principle that early access penalties could exceed interest earned and therefore impact on capital returned, but just contending that some (all?) providers levy charges that you feel are too high, or are you asserting that savers who change their minds should always get back no less than they paid in?
    Yes I am accepting that.

    I am very clearly asserting that penalties can be the loss of all accrued interest earned and a loss of a recoverable administration fee after a common cooling off period will eat into capital.  

    I am arguing against that this could exceed by the amount of an admin fee exceed the capital loss.  But I am also saying that I believe the admin loss is unlikely to ever be defensible much above pennies. 

    I am arguing against that the penalty should ever be greater than the total accrued interest and administration cost should then erode capital loss.  I am arguing that anything over and above this is  unbalanced and therefore unfair. If you get my drift.
    I'm not convinced that your arguments are as clear you perhaps believe, and would see 'drift' as being an appropriate word for the way that the arguments seem to be progressing, not that there's anything necessarily wrong with that in the context of an evolving debate of course!  Your edits to that post do seem to have left some inconsistent wording though.

    Anyway, to return to one of your earlier points, fairness is quite subjective, so if you're asserting that the scale of penalties is currently unfair, what is your specific proposal to resolve that unfairness?  If you're suggesting, for example, that customers should always get back no less than they paid in, that would penalise institutions in low-interest conditions (remember them?!) where the penalty might fall well short of realistic actual admin costs to enact early withdrawal, so that could be argued to be unfair.

    As with your holiday scenario, my recollection is that companies are expected to charge a genuine estimate of their losses, but of course in the real world it isn't as simple as that, and the effort required to assess such losses on a case by case basis would be prohibitive, so they all publish standardised schedules of cancellation charges (x% charged if within y days of departure, etc), which inherently will rarely correspond to the actual losses on any given transaction, so despite the understandable desire for fairness, that doesn't necessarily mean it's achievable.

    Ultimately it all comes down to the balloon-squeezing aspect discussed earlier, i.e. that if institutions have onerous terms imposed on them, they'll simply seek compensation elsewhere, e.g. via lower interest rates or whatever.
    There are various remedies short of money claim and the courts but that is the current main way of recourse.  This is normally settled before a hearing because it is in the travel companies best interest to settle individual cases than for them to go to court and potentially appearing in The Daily Mail for example where even more people will then become aware of their rights.  This approach filters and settles claims from determined consumers and allows travel companies to retain charges that have been unchallenged from the much greater majority. That sadly is real life.
    I wasn't referring to retrospective remedies but to specific legislative or regulatory changes that you'd suggest that would proactively compel financial institutions (and/or other organisations in the wider context) to act in the way you'd be happy with, rather than having to rely on CMA guidance or other interpretations of existing legislation, i.e. a way of avoiding the subjectivity arising from the nebulous concept of 'fairness'.
    There isn't any that is sufficiently specific compared to general consumer law.  There should be.  In my opinion.  That was my point. 
    Yes, I know there isn't any, so my point was to ask you specifically what you'd propose to fill that gap, i.e. are you proposing removal of the financial services exemption from the cancellation legislation, or some new law or financial regulation to make everything seem fairer to you, etc?  You've described what you see as the problem, so I'm suggesting that you define your preferred solution, or are you just taking it as far as 'I don't think there should be any capital loss permissible when cancelling fixed term products'?

    A perfectly reasonable question and I'm happy to give a view.   
    The solution  in my opinion should be the removal of expemption from existing consumer protection laws because I see that the effect of this exemption has had the unintended consequence of what I feel has been exploitation of the exemption to the detriment of consumers so therefore also feel very strongly that in addition should be the added acceptance that financial products need extra (not less)  protections for consumers over and above the laws that already govern buying kettles or matresses for example.  The exemptions were for what I presume were good reasons, but my point is that I think there has been detrimental unintended consequences that might now be overdue for remedy. 
    Changes always bring with them consequences.  But I think that the self-preservation instincts of corporations always finds a way through them, and if the restrictions are generally in favour of the consumer then the outcomes in the end will always favour the most genuinely customer-centric organisations that most would wish to see prosper will inevitably float to the top and those that take the *** will struggle.  And that is the way it should be in my view.
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