James Daley

By James Daley

A few months ago, Fairer Finance launched a campaign to get rid of unwieldy and undigestable terms and conditions documents in the world of personal finance. When we kicked off our Spare us the Small Print campaign, we carried out a snap survey to find out how many people actually read the Ts &Cs - and from our poll of 2,000 individuals, as many as 73% claimed they don't bother. Today, the Money Advice Service went one better, launching a similar survey in which as many as 84% of people said they don't read the small print.

While the results didn't come as much of a surprise, they did leave me with some pity for the significant minority of people who still diligently read the Ts & Cs every time they're prompted to. Although the Money Advice Service claim that failure to read the small print is costing consumers an average of £428 a year, the truth is that if this is money that they really lost because of a nasty trap which was buried in the Ts & Cs, then they can probably make a valid claim against their provider and get it back.

Fortunately, while banks and insurers are moving very slowly when it comes to providing consumer-friendly, transparent literature, consumer protection has stayed ahead of the curve.

Ombudsman is on your side

If a company rejects your insurance claim and points to the small print, there's every chance that the Financial Ombudsman Service will take your side if you appeal. By and large, the burden is still on companies to show that they did everything they could to flag the main snags and catches with their product at the time it was bought. Burying traps in the small print is - rightly - not considered by the Ombudsman to be treating your customer fairly.

Since we launched our campaign, I've spent a lot of time talking to companies about this issue - and am beginning to get a few interested in a new way of thinking about Ts&Cs. Terms and conditions should be considered a manual. When a customer needs to understand the detail of how to use their product, they should be able to turn to their manual, and find a neatly indexed document, written in plain english, and clearly laid out. But it's unreasonable for a company to expect a customer to read this from cover to cover when they take out a product.

When you buy a car, you don’t read the manual first. But when you need to know what the tyre pressure is, it’s helpful if the info is easy to find.

Of course there’s plenty that you need to think about before you buy a financial product - and the key information should all be available in various different short-forms, maybe in video or audio format as well as a PDF document, so that the customer is given all the key facts before they complete their purchase. For first or second time purchases - a student buying home insurance for the first time, for example - there should be a greater level of support and information.

Good for companies and their customers

Tackling this challenge is actually in the interest of companies - not just consumers. The unwieldy nature of terms and conditions today - mean that few people read them and they carry very little significance when it comes to disputes.

The Money Advice Service are right to highlight the fact that people are losing out because of lack of transparency. But don't be mistaken into believing that the answer is for all of us to be more diligent about reading Ts&Cs. Make sure you understand the key fees, charges and exclusions of the product you're buying - which should be available in a summary document. And if a company turns down your claim because of a trap hidden on page 34 of the small print, complain all the way to the Ombudsman. You’ll probably win.