The Competition and Markets Authority (CMA) is advising wedding and event venues to ‘play fair’, and warning that demanding large deposits and cancellation charges could breach consumer law.
The CMA is advising businesses which provide venues for events including wedding receptions, parties and anniversaries of their obligations under consumer protection law and encouraging reviews where possible.
Boutique, lifestyle and independent hotels are included in this mix.
With costs for event venue hire resulting in a substantial investment from guests, potentially unfair cancellation terms can result in a considerable loss for consumers, particularly when they have to pay a deposit upfront, which they lose if they cancel or change their plans.
The CMA warns that in order for this to be fair under consumer protection law, terms must include the following:
• A deposit is just to reserve the goods/services and is no more than a small percentage of the total price.
• Advance payments reflect the business’ expenses, and leave customers with a reasonable amount still to pay on completion.
• Customers do not lose large advance payments if they cancel, in all circumstances.
• Businesses set sliding scales of cancellation charges so they cover their likely losses directly from the cancellation.
Nisha Arora, CMA senior director, consumer, said: “Clear and fair terms benefit consumers and businesses, help to prevent disputes and provide protection should things go wrong. Unfair terms, even when a contract is signed, are not legally binding and we encourage any businesses which use advance payments and cancellation charges to review their terms to ensure they comply with consumer protection law.”
To help businesses, the CMA has produced an at-a-glance guide that offers businesses tips on setting advance payment and cancellation terms that are more likely to be fair.