Part 1: Proposals for new initial condition C5 - Treating students fairly

36. Table 1 is an overview to explain why we are proposing to define unfair treatment with reference to these factors.

Table 1: Proposed factors for defining unfair treatment

37. The proposed condition requires a provider to treat all students fairly. We propose that the condition’s protections are:
    • informed by consumer protection legislation, but adapted for the purpose of our regulation
    • separate to the consumer protections offered by consumer law.
38. Separately to the requirements of the proposed condition we would, of course, expect all higher education providers seeking registration with the OfS to ensure they are aware of their legal obligations and are legally compliant at the point of application and on an ongoing basis.

39. We propose to consider a provider’s actions and omissions in assessing whether it treats students fairly. This means a provider may not be deemed to treat students fairly where it takes certain actions (for example, including unfair terms and conditions in its student contract) or where it fails to take particular actions (for example, failing to provide information about additional course costs in a timely way, or at all).

40. The draft condition includes ‘proposed or likely’ actions or omissions. ‘Proposed’ actions would include, for example, unfair terms and conditions even where these are not currently in use. Where a provider is not yet delivering higher education, our initial view is that this would provide an appropriate mechanism to assess its intended approach to the fair treatment of students.
41. ‘Likely’ is intended to cover circumstances where an action has not been expressly proposed but there is evidence that indicates a provider may act (or not act) in a certain way. For example, a provider’s contract with its students may be ambiguous, unclear or silent on a particular matter but its website may contain evidence of unfair treatment in relation to the same matter.

42. We propose to consider all reasonably available evidence to assess whether, in our reasonable opinion, any of the provider’s actions or omissions (including those that are proposed or likely) fall within one or more of the descriptions set out in the OfS prohibited behaviours list (Annex D). These descriptions fall into the following categories:
    1. Key documents (informed by the Consumer Rights Act 2015, schedule 2, ‘Consumer contract terms which may be regarded as unfair’, commonly known as the ‘grey list’).⁷
    2. Descriptions relating to conduct and omissions (informed by the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277), schedule 1, ‘Commercial practices which are in all circumstances considered unfair’).⁸
    3. Clarity and legibility of key documents and other information for students (informed by CMA guidance for higher education providers).⁹
    4. The provider’s policies relating to the circumstances in which it may make changes to its courses.
    5. The provider’s complaints processes (informed by CMA guidance for higher education providers).¹⁰
    6. The provider’s refund and compensation policies.
    7. Fake reviews (informed by the Digital Markets, Competition and Consumers Act 2024 c.13, schedule 20, ‘Commercial Practices which are in all circumstances considered unfair, paragraph 13 – not yet in force).¹¹
43. The approach we are proposing assumes a provider does not treat students fairly where its actions or omissions fall within one or more of these descriptions.

Creating an OfS list of prohibited behaviours that constitute unfair treatment

44. To support an efficient assessment that allows a provider that satisfies our initial requirements to be registered more quickly, we have drafted a list of OfS prohibited behaviours that offers appropriate certainty about our expectations. We expect that this would be easy to understand for all relevant stakeholders, including students, providers and interested members of the public. While some of the provisions in the proposed list are informed by legislation and CMA guidance, we propose to create an OfS definition of ‘prohibited behaviour’ that draws on our experience as a regulator and goes beyond legislation in some areas (as explained at paragraph 47).
45. We are not proposing to make findings in relation to consumer protection law: any judgement made in relation to initial condition C5 would be solely a regulatory judgement.

Informed by legislation

46. We have taken elements of consumer protection law that we consider most relevant to the higher education sector and adapted the language to this context. This does not mean, however, that we endorse behaviours not included on our list but which are covered by the legislation. For example, while they are not expressly included in our list, the OfS does not, of course, endorse pyramid schemes. We have included a list of the legislative provisions that we are not currently proposing to include in the OfS prohibited behaviours list (see Annex B: Alternative options considered, paragraph 11).
47. By drawing on legislation, many of the concepts in the list should, we suggest, be broadly familiar to providers, although we acknowledge that the effect of our regulatory provisions may differ from legislation in some areas. A provider satisfying its legal obligations may not, therefore, always satisfy the OfS’s proposed initial regulatory requirements. In particular, contract terms that may be regarded as unfair according to the Consumer Rights Act 2015 (the ‘grey list’) would always be unfair under initial condition C5 (part a. of the OfS prohibited behaviours list). We also note that the ‘key documents’ referred to in the OfS prohibited behaviours list would include its policies relating to the circumstances in which it may make changes to its courses, its refund and compensation policies and its compliance processes, as well as its contract terms and conditions. We are proposing to consider documents beyond those that may ordinarily have contractual effect and the condition therefore has a wider scope than consumer protection law. Our initial view is that this is appropriate because students may rely on a wider range of documents in practice.
48. Our approach has been to consider fairness from a student’s perspective, which means we are proposing a higher standard under our condition than in existing legislative provisions. We would particularly welcome views on any provisions we have included in the currently proposed OfS prohibited behaviours list (part a) that respondents may consider to be fair (and the particular circumstances to illustrate where this might be the case). Likewise, we would also welcome views on any provisions informed by legislation that we are not proposing to include in the OfS prohibited behaviours list but which respondents think should be included.

Informed by CMA guidance

49. We have drawn specifically from CMA guidance in relation to complaints processes, and clarity and legibility of information for students. The CMA’s guidance continues to provide a helpful and separate reference for providers in understanding their legal duties, and we are not seeking to replace or interpret this.

Alternative options considered

50. We have included alternative options that we have considered in Annex B. These are:
    1. An initial assumption that behaviour on the OfS prohibited behaviours list is evidence of unfair treatment but a provider has an opportunity to overturn this initial assumption (through the submission of additional contextual evidence).
    2. A more limited OfS prohibited behaviours list (limited to matters that are always considered unfair in law).
    3. An expanded OfS prohibited behaviours list. (Are there behaviours that should be prohibited that we are not currently proposing to include?)
    4. Model terms and conditions. (We suggest that this may be considered as well as, rather than instead of, our proposal.)

7 See Gov.UK, ‘Consumer Rights Act 2015 Schedule 2’.

8 See Gov.UK, ‘The Consumer Protection from Unfair Trading Regulations 2008 Schedule 1’.

9 See Gov.UK, ‘Higher education: Consumer law advice for providers’.

10 See Gov.UK, ‘Higher education: Consumer law advice for providers’.

11 See Gov.UK, ‘Digital Markets, Competition and Consumers Act 2024 Schedule 20’.

Question

Question 4a: What are your views on the proposed OfS prohibited behaviours list (including the way we are proposing to use consumer protection legislation and CMA guidance to inform it)?

51. The draft condition proposes that a provider would not be regarded as treating a student fairly if, in the OfS’s reasonable opinion, its actions or omissions (including those that are proposed or likely) give rise to a likelihood of detriment or actual detriment to the student, unless the OfS considers that the detriment would be reasonable in all the relevant circumstances.

Allowing flexibility for the OfS to address unforeseen circumstances

52. This element of the requirement is intended to address actions or omissions that we have not accounted for elsewhere in the condition but that may be to the detriment of students, including those elements of legislation that we have not included in the OfS prohibited behaviours list. The proposed ‘detriment test’ is designed to allow a degree of flexibility and ‘futureproofing’ in case new practices that cause concern emerge.

Allowing flexibility for a provider to explain mitigating circumstances

53. We propose that a provider may not be treating students fairly where its actions (or omissions) are to the detriment of students. However, we propose to consider this on a case-by-case basis, considering whether the detriment (or likely detriment) is reasonable in the circumstances and allowing for reasonable mitigating circumstances to be properly considered.

Factors in determining likely or actual detriment

54. Draft guidance on the proposed condition sets out the following non-exhaustive factors we propose to consider in determining whether an act or omission that gives rise to a likelihood of detriment (or actual detriment) is likely to be considered reasonable in the circumstances:
    1. Whether it is reasonable to argue that the course of action proposed or taken is, or was, necessary in the circumstances.
    2. Whether these circumstances are, or were, in the control of the provider.
    3. Whether the provider is doing, or has done, everything possible to limit the extent of the detriment.

Question

Question 4b: What are your views on the way we propose to consider detriment to students (including the non-exhaustive factors we propose to consider to determine whether detriment is ‘reasonable in all the relevant circumstances’)?

55. The OfS expects all providers to comply with the law and we propose to take as our starting position that any provider found not to have done so is unlikely to treat students fairly. Where a provider has been subject to adverse findings in relation to any of the following legislation, we propose that this would indicate it does not treat students fairly:
• Consumer protection law (findings by a UK court or competent authority)¹²
• Section 214(1) of the Education Reform Act 1988 (unrecognised degrees)¹³
• Section 76(6) of the Companies Act 2006 (failure to comply with a Secretary of State direction to change a company name)¹⁴
• Section 1198 of the Companies Act 2006 (name giving misleading indication of activities).¹⁵
56. We propose to consider findings that have been made directly or indirectly in relation to the provision of education and ancillary services (see Proposal 5 for our proposed definition of ancillary services).

Consumer protection law

57. We propose to interpret ‘consumer protection law’ broadly, including (but not limited to) the following legislation (as may be amended from time to time):
    • The Consumer Rights Act 2015¹⁶
    • The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013¹⁷
    • The Provision of Services Regulations 2009¹⁸
    • The Consumer Protection from Unfair Trading Regulations 2008¹⁹
    • Digital Markets, Competition and Consumers Act 2024²⁰
    • The Protection from Harassment Act 1997.²¹
58. We propose to include the Protection from Harassment Act 1997 to address circumstances where a provider imposes academic sanctions for non-payment of non-tuition fee debts, which it aggressively pursues and which may amount to harassment.
59. We propose that a relevant adverse finding would be one made by a UK court or other competent authority, meaning the CMA or any other body empowered to make decisions under section 182 of the Digital Markets, Competition and Consumers Act 2024.

Unrecognised degrees

60. Section 214(1) of the Education Reform Act 1988 sets out that any person who, ‘in the course of business, grants, offers to grant or issues any invitation relating to’ an unrecognised degree is guilty of an offence.
61. Only the following are recognised degrees:
    • those taught by providers with degree awarding powers²²
    • those taught by providers via a contractual arrangement with a provider that has degree awarding powers.
62. Where there is a finding of wrongdoing under section 214(1) the Education Reform Act 1988, we propose there should be a presumption that the provider does not treat students fairly.

Additional provisions in the proposed OfS prohibited behaviours list

63. Where, at the time of its application to register with the OfS, a provider claims to offer unrecognised degrees but there is no formal finding of wrongdoing, we also propose to treat this as unfair according to the OfS prohibited behaviours list. This is because we think it would be inappropriate for the OfS to register a provider in these circumstances. We have drafted specific provisions in the OfS proposed prohibited behaviours list (part b) (Annex D) to reflect activities related to the offering of unrecognised degrees.

Misleading company names (use of the term ‘university’)

64. Section 76(1) of the Companies Act 2006 allows the Secretary of State to direct a company to change its name where it gives a misleading indication of the nature of its activities. Section 76(6) states that an offence is committed where a company fails to comply with such a direction made by the Secretary of State.
65. Section 1198A(1) of the Companies Act 2006 states that a company must not carry on business in the UK under a name that it has been directed or ordered to change. Section 1198A(3) states that an offence is committed if a company uses a name in contravention of this section.
66. Where there is a finding of wrongdoing under the Companies Act in the context of the provision of education or ancillary services, we propose that this should be taken as evidence of unfair treatment, in particular to address circumstances in which a provider uses the word ‘university’ inappropriately. Inappropriate use would be in circumstances other than:
    1. Where the OfS has approved the use of the word ‘university’ in the name of a registered higher education provider.²³
    2. Where the Secretary of State has given approval for the sensitive word ‘university’ to be used in the name of a company or limited liability partnership, or in a business name.²⁴

Additional provisions in the proposed OfS prohibited behaviours list

67. Where, at the time of its application to register with the OfS, a provider uses the word ‘university’ inappropriately, we propose to treat this as evidence of unfair treatment according to the OfS prohibited behaviours list, even where the Secretary of State has not directed the provider to change its company name and there is no finding of wrongdoing. This is because we think the OfS should not register a provider in these circumstances. We have drafted specific provisions in the proposed OfS prohibited behaviours list (part b) (Annex D) to reflect activities related to the use of the word ‘university’.

Findings in relation to any form of education

68. We propose to consider as relevant any finding that directly or indirectly relates to the provision of any form of education (or ancillary services). For example, some providers that seek to register with the OfS already deliver further education and have taken a strategic decision to expand their business. Our initial view is that evidence in relation to such provision would be relevant, because of the similarities between higher education and other forms of education.

Presumption that adverse findings indicate the provider does not treat students fairly

Where there is an adverse finding

69. We propose that a provider should have an opportunity to explain the circumstances of any adverse findings. We propose that a provider would be required to submit a form to declare any findings, including a summary of the circumstances and, where relevant, any mitigations in place following the event (Proposal 6).
70. We propose to consider the following non-exhaustive factors in determining whether the provider has successfully overturned our initial presumption:
    1. The recency of the findings.
    2. Whether the findings relate to matters that were repeated or sustained.
    3. Whether the findings include a view about the deliberateness of the provider’s actions or inaction.
    4. How the provider has engaged with the issue since the finding was made.
    5. The steps it has taken to address the issue and ensure it does not happen again in future.

Where there has been no finding

71. Where there has not been a relevant finding, but the provider’s behaviour falls within one or more provisions in the OfS prohibited behaviours list, we are proposing to treat this as evidence that the provider does not treat students fairly, without an opportunity to overturn this assumption; for example, where there has not been a finding under the Education Reform Act or the Companies Act but the provider is offering unrecognised degrees or using the sensitive word ‘university’ without the necessary permissions. For the avoidance of doubt, this proposal does not remove a provider’s right to submit representations in response to any provisional decision taken by the OfS to refuse registration on the basis that the provider does not satisfy one or more of the initial conditions.²⁵

Alternative options considered

72. We have included alternative options that we have considered in Annex B. These are to:
    1. Consider findings only in the context of higher education.
    2. Consider findings in any context.
    3. Consider findings only within a given time period. (Is there a single appropriate ‘cut off’ point prior to the provider’s application register, before which the OfS should disregard findings?)
    4. Consider each case on its merits (a neutral starting position rather than an assumption that adverse findings indicate unfair treatment).

12 As set out at paragraph 57.

13 See Gov.UK, Education Reform Act 1988.

14 See Gov.UK, Companies Act 2006.

15 See Gov.UK, Companies Act 2006.

16 See Gov.UK, Consumer Rights Act 2015.

17 See Gov.UK, The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

18 See Gov.UK, The Provision of Services Regulations 2009.

19 See Gov.UK, The Consumer Protection from Unfair Trading Regulations 2008.

20 See Gov.UK, Digital Markets, Competition and Consumers Act 2024, The Digital Markets, Competition and Consumers Act 2024 is not yet in force, but the government expects the consumer protection elements to come into force in April 2025. If the OfS decides to introduce proposed initial condition C5 (including any amendments that may be made following this consultation process), we propose that references to other legislation may be removed from the above list, where the Act supersedes such legislation.

21 See Gov.UK, Protection from Harassment Act 1997.

22 See OfS, ‘Degree awarding powers’.

23 See OfS, ‘University title’.

24 See Gov.UK, ‘Use of university, polytechnic and higher education in business and company names (other than for university and university college title)’.

25 See paragraph 110 of the OfS’s Regulatory framework.

Question

Question 4c: What are your views on the adverse findings we propose to consider and the way in which we propose to consider them?

73. We propose to consider evidence that:
    1. An undertaking has been accepted by an enforcement body in connection with behaviour that relates to the provision of education or ancillary services.
    2. There is an outstanding application for an enforcement order made by an enforcement body where this relates to the provision of education or ancillary services.

Undertaking

74. An undertaking is a formal agreement by a business to comply with consumer protection law. This may be by stopping or not repeating certain behaviours. It may also include a requirement for the business to take additional measures, including providing documents or information to the enforcement body. There is no obligation on an enforcement body to accept an undertaking and it may instead apply for an enforcement order.

Enforcement order

75. An enforcement body may apply to a court for an enforcement order where it considers a business has carried out, or is carrying out, activities contrary to consumer protection law. If the court finds that the provider’s actions are not compliant with the law, it may issue an enforcement order requiring the business to comply with the law. Where a business fails to comply with an enforcement order, it would be in contempt of court.

Enforcement body

76. The draft condition defines an ‘enforcement body’ as it is set out in:
    • Schedule 6 of the Consumer Rights Act 2015
    • Part 8 of the Enterprise Act 2002
    • Section 164 of the Digital Markets, Competition and Consumers Act 2024 (where such a body is defined as an ‘enforcer’).
77. Trading Standards is an enforcement body as defined in the Enterprise Act 2002 and the Digital Markets, Competition and Consumers Act 2024.

Factor to be considered in the assessment

78. We propose that a provider would be required to make a declaration about any undertakings or applications for enforcement orders, including any information the provider considers relevant (see Proposal 6). We are not proposing to automatically conclude that the provider does not treat students fairly based on this evidence, but rather to take this into account alongside other reasonably available evidence (for example, the provider’s documents or information published on its website).

Enforcement orders issued by a court

79. For the avoidance of doubt, this proposal relates to applications for enforcement orders by enforcement bodies, and not where enforcement orders have been issued. Where an enforcement order has been issued, the court or other competent authority will also make a finding of non-compliance with consumer protection law. According to our current proposals, such a finding would be considered under C5.5a.

Behaviour that relates to any form of education

80. We are proposing to consider as relevant any undertakings or applications for enforcement orders where these relate to the provision of any form of education (or ancillary services), not just those that relate to higher education. Our initial view is that such evidence would be relevant because of the similarity between the delivery of different types of education.

Alternative options considered

81. We have included alternative options that we have considered in Annex B. These are to:
    1. Consider behaviour only in the context of higher education.
    2. Consider behaviour in any context.
    3. Disregard undertakings and applications for enforcement orders.

Question

Question 4d: What are your views on the way we propose to consider undertakings by enforcement bodies and applications for enforcement orders?

82. The draft condition sets out a presumption that, in the course of its application, where a provider removes concerning terms or information from any of its documents or published information, mere removal would not be sufficient to conclude that the provider treats student fairly. This would be relevant, for example, where a provider removes a term after the OfS has provisionally determined that it is unfair. In such circumstances, we propose that it would be for the provider to submit evidence to the OfS that it has also considered and addressed any underlying issues that led to the unfair term being included to overturn the presumption.
83. Where a provider removes concerning terms from its documents without demonstrating it has addressed underlying issues, we propose this would be insufficient.
84. We propose to consider:
    • the consequences of the removal of the term or information
    • whether the removal addresses the issues
    • whether any other related issues remain
    • whether the removal itself leads to other concerns.
85. We also propose to consider:
    • the extent to which the provider has demonstrated it understands why the term or information that it has removed was of concern
    • other actions beyond removal that the provider has taken, and the extent to which these address the concern
    • whether the provider has replaced the terms with more suitable terms.
86. We propose to take more assurance from evidence that demonstrates the provider has understood the concern and taken actions to fully address the issue. We propose to consider the nature and range of the provider’s actions relevant to the nature and extent of the original concerns.
87. We propose to consider all available reasonably evidence, including information published on the provider’s website. For example, where a provider removed an unfair term from a student contract but continued to make similar statements elsewhere on its website, our initial view is that we would be likely to conclude that our concerns had not been properly or fully addressed.

Alternative options considered

88. We have included alternative options that we have considered in Annex B. These are:
    1. A binary approach (whereby the removal of concerning terms or information would either never be, or always be, sufficient).
    2. Considering each case on its merits (a neutral starting position rather than an assumption that adverse findings indicate unfair treatment).

Question

Question 4e: What are your views on the way we propose to consider a provider’s removal of concerning terms or information from its documents?