Financial businesses must provide contracts that are clear and fair, and can’t enforce unfair terms. Find out how to spot and report an unfair term.First published: 05/04/2016 Last updated: 20/03/2023 See all updates
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When you buy a financial service or product, you’ll need to accept the terms and conditions offered by the business. This may include a contract for:
- a credit card for personal use
- a residential mortgage
- travel insurance for a holiday
These contracts should set out what you can expect from the business and what the business can expect from you in return. The terms and conditions in these contracts must be fair and clear. If you come across a term that isn’t, you can report it to us.
We have powers to challenge unfair and unclear terms in consumer contracts.
How to spot an unfair or unclear contract term
A contract term can be unfair or unclear for many reasons.
- allow the business to change the terms of the contract without telling you or explaining why
- bind you to hidden terms
- limit your legal rights unfairly
- charge an unreasonably large sum if you don’t stick to your side of the contract
- automatically renew without giving you the right to cancel
- be read in more than one way
- use wording that isn’t clear or prominent to describe the product or service, or the costs
But just because a contract term looks like one of these examples, it doesn’t necessarily make it unfair or unclear. It will depend on the contract overall.
Contract terms we can investigate
We can only consider contracts that:
- exist between a customer and a business
- were entered into after 1 July 1995
Report a contract term
If you come across a contract term that you think is unfair or unclear, please report it to us. We really appreciate the time you spend doing this, as it could help protect others from similar terms.
But while we consider every report that's sent to us, we can’t share details of any action we take.
Answer the following questions to find out if we can consider your report. Depending on your answers, we may ask you for more information.
How we deal with unfair and unclear contract terms
Following past reports, we’ve asked businesses to stop using or change a term, and have secured compensation for consumers.
But while we can challenge a contract term, only the courts can ultimately decide if a term is unfair or unclear.