For a number of years I’ve been part of the ‘Rip Off Britain’ team of experts.
It’s a consumer affairs programme on BBC1 and is usually pre-recorded. However, once a year we do five mornings of live shows from New Broadcasting House in London and this week is the week for that.
I’ve been down to London for a couple of the live shows and in one segment had the brief to tackle the thorny issue of ‘admin charges’.An admin charge is a fee charged by a company for a service outside the original contract or bargain.
So if I bought a suit and then had it altered I would expect to pay extra for the alteration. Likewise, if I bought an insurance policy and then had to alter the details, say because I moved house and had to update my address, the insurance company may claim there is an administrative cost to processing that alteration to the policy, so it would reasonable for them to charge a fee for that.
But what is a reasonable admin charge? The problem with the word ‘reasonable’ is that everyone’s definition is different. It really is a legal grey area, as there is no hard and fast legal definition.
This means that, to an extent, admin charges are unchecked by the law and those imposing them have a blank cheque and can charge what they want. There is no overarching guidance or benchmark which says what is reasonable and what isn’t.
Another issue for consumers is that admin charges crop up in all sorts of scenarios and so all kinds of different laws, regulations and consumer protections apply, or don’t, depending on the circumstances
Most people know when an admin fee or charge is fair or not and it seems to be that it is gut instinct rather than proper consumer protection which keep them in check. As a customer, if you are charged a high admin fee you tend to vote with your feet and not go back for more.
The new Consumer Rights Act 2015, which came into force on October 1, does help.
The Act improves the law for consumers where hidden charges are concerned and makes it easier for them to challenge unfair terms in contracts which give rise to hidden charges and fees.