The unfair contract terms library sets out our past undertakings, agreements and other publications regarding unfair contract terms. We also use this section of our website to update firms about the work we are doing in this area.
Latest update
We have published a statement about changes made by four Buy Now, Pay Later (BNPL) firms to their contract terms. The 4 firms are Clearpay, Klarna, Laybuy and Openpay. The statement also contains guidance for firms in this sector offering unregulated BNPL products. The statement covers the following types of terms:
- terms setting out what happens if a consumer cancels the contract for purchases funded by a BNPL loan
- terms enabling firms to terminate and/or suspend a consumer’s account or access to services
- right of set-off
- continuous payment authority terms
Library
We expect firms to have regard to the material published on this page. In particular, as part of their risk management, firms should remain alert to undertakings or court decisions about other firms, since these will be of potential value in indicating the likely attitude of the courts, the FCA, the CMA or other bodies to similar terms or notices or those intended to have similar effects.
This page lists undertakings given to the FCA but does not list undertakings given to the CMA, which can be found on their website, or court decisions.
In addition, we encourage firms to read the CMA’s guidance on the unfair terms provisions of the CRA. The CMA has a leadership role in relation to the enforcement of unfair terms legislation and their guidance is intended to apply to all businesses, including those in the financial services sector, which use contract terms and notices with consumers. The guidance sets out the CMA's views on how the law is intended to operate.
Firms may also wish to seek their own legal advice on unfair contract terms to take account of developments in legislation and relevant case law.
It is ultimately for the courts to apply and interpret the unfair terms provisions of the CRA. Reading the material cannot be a substitute for taking independent legal advice.
Unfair Contract Terms Regulatory Guide (UNFCOG)
UNFCOG sets out our approach to assessing the fairness of a contract term. In UNFCOG 1.3.4(2), we state that, in deciding whether to ask a firm to undertake to stop including a term in new contracts and/or to stop relying on it in concluded contracts, we will consider the full circumstances of each case, this may include:
- whether we are satisfied that the contract term may properly be regarded as unfair within the meaning of the CRA
- the extent and nature of the detriment to consumers resulting from the term or the potential harm which could result from the term
- whether the firm has fully cooperated with the FCA in resolving our concerns about the fairness of the particular contract term
Read the full text of UNFCOG.
Publications
- Undertakings
- Agreements
- Statements from firms and industry bodies
- Consultation papers
- Discussion papers
- Finalised guidance
- Policy statements
- Speeches
- Other publications
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As well as complying with an undertaking given for a contract for a particular financial product or service, we expect firms to take an outcomes-focused approach by assessing whether the concerns identified in that undertaking also apply to their other regulated contracts and, if so, removing the same unfair terms or terms with similar effects from those contracts as well. This is because, although an undertaking reflects our concerns with the terms in a certain contract for a particular financial product or service, it may also provide a useful guide to our views generally on the fairness of terms in standard consumer contracts. While a term may not necessarily be unfair in every type of consumer contract, firms need to satisfy themselves that all their contracts terms are fair. |
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Trading sector - Banking |
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RBS Group |
March 2011 |
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Skipton Building Society |
November 2003 |
| Trading Sector - Consumer Credit | |
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Capital Financial Management Limited |
May 2019 |
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Trading Sector - Insurance |
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ETA Services Ltd |
June 2019 |
| London General Insurance Company Limited Nationwide FlexPlus account extended warranty protection policy |
July 2017 |
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Undertaking from esure Insurance Ltd |
September 2013 |
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BISL Limited |
February 2013 |
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Card Protection Plan Ltd |
November 2012 |
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AXA Insurance UK plc |
February 2012 |
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Undertaking from National House-Building Council |
January 2012 |
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Legal & General Insurance |
December 2011 |
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RBS Insurance |
November 2011 |
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Gocompare.com Limited |
December 2009 |
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Insurancewide.com Services Limited |
December 2009 |
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Moneysupermarket.com Financial Group Limited |
December 2009 |
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uSwitch Limited |
December 2009 |
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UK Insurance Limited |
September 2008 |
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Homecare Insurance Limited |
July 2008 |
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UK Underwriting Limited |
May 2008 |
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May 2008 |
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HSA / Simplyhealth Access |
November 2006 |
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DAS Legal Expenses Insurance Company The ECJ ruling clarified that when recourse is had to a lawyer in any inquiry or proceedings, or whenever there is a conflict of interest, then freedom to choose a lawyer is guaranteed, and so any provisions of a contract that detract from, or qualify in any way, that freedom to choose a lawyer, would not comply with the Council Directive 87/344/EEC of 22 June 1987 on Legal Expenses Insurance (Directive) (transposed into UK law by the Insurance Companies (Legal Expenses Insurance) Regulations 1990 (Regulations)). Removing this undertaking from our website does not detract from our requirement that all firms should have fair terms in their standard contracts with consumers. We have sent a letter to firms reminding them of the requirement to comply with the Directive and Regulations. |
July 2010 |
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July 2006 |
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Norwich Union Insurance |
June 2006 |
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Amtrust International Underwriters Ltd |
June 2006 |
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Prudential International Assurance plc |
December 2004 - Withdrawn 2 June 2016 |
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AXA Insurance |
March 2004 |
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PPP lifetime care plc, part of the AXA group of insurers |
March 2004 - Withdrawn 2 June 2016 |
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Trading Sector - Investment |
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James Brearley & Sons Limited |
May 2019 |
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Clerical Medical Investment Group Limited |
May 2013 |
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Equitable Life Assurance Society |
May 2013 |
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Investec Bank plc |
February 2013 |
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Morgan Stanley & Co International plc |
February 2013 - Withdrawn 2 March 2015 |
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Royal London Mutual Insurance Society Limited |
December 2012 - Withdrawn 2 March 2015 |
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Jarvis Investment Management Plc |
February 2009 - Withdrawn 2 March 2015 |
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Abbey Life Assurance Company Limited |
November 2008 |
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Absolute Assigned Policies |
December 2006 |
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Skandia Life Assurance Company Ltd |
November 2006 - Withdrawn 2 June 2016 |
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Britannic Assurance plc |
November 2006 - Withdrawn 2 June 2016 |
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Tunbridge Wells Equitable Friendly Society Ltd |
March 2006 |
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Sippdeal Ltd |
March 2006 - Withdrawn 2 March 2015 |
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London Capital Group Limited |
January 2005 |
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Trading Sector - Mortgages |
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| The Co-operative Bank p.l.c. (trading as Platform) Additional borrowing term |
26 September 2019 |
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Kensington Mortgage Company Limited |
January 2014 - Withdrawn 2 March 2015 |
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Cheshire Mortgage Corporation Limited |
March 2012 - Withdrawn 2 March 2015 |
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Chesham Building Society |
May 2010 - Withdrawn 2 March 2015 |
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National Australia Bank |
January 2009 - Withdrawn 2 June 2016 |
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In Retirement Services (Reversions) Ltd |
August 2008 |
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Barclays Bank PLC, trading under the name of Woolwich (Barclays Bank PLC) |
August 2007 - Withdrawn 2 June 2016 |
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London Scottish Bank plc |
October 2006 - Amended September 2010 |
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Blemain Finance Limited |
September 2010 |
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Intelligent Finance |
October 2006 - Withdrawn 2 June 2016 |
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Scottish Widows |
September 2006 |
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Trading sector - Payment Services |
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| PPRO Financial Limited Terms and conditions in contracts with VIABUY Prepaid MasterCard customers |
October 2017 |
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Trading sector - Retail Intermediaries |
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Beacon Financial Limited |
January 2010 |
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A P Financial Services UK Limited |
January 2010 |
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The On-Line Partnership Limited |
January 2009 |
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Hayburn Rock Associates Ltd |
August 2007 |
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Agreement from AXA Insurance UK plc (as underwriter to Lloyds Banking Group) |
June 2013 |
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Statements from firms and industry bodies |
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Trading sector |
Statement from: |
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Banking - Savings Account |
September 2006 |
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Insurance |
June 2006 |
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CP14/8: The FSA's approach to the use of its powers under The Unfair Terms in Consumer Contracts Regulations 1999 |
July 2002 |
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DP14/2: Fairness of changes to mortgage contracts |
July 2014 |
| FG18/7: Fairness of variations terms in financial services consumer contracts, under the Consumer Rights Act 2015 | December 2018 |
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Supporting documents to FG18/7 GC18/2: Fairness of variations terms in financial services consumer contracts, under the Consumer Rights Act 2015 CG18/2: Summary of feedback |
May 2018 December 2018 |
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PS14/8: The FSA's approach to the use of its powers under The Unfair Terms in Consumer Contracts Regulations 1999 - Feedback on CP148 and made text |
July 2002 |
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Unfair contract terms – ensuring a fair deal for consumers- March 2012 Clive Gordon, Head of Conduct Specialists gave a speech at the FSA's Unfair Contract Terms Seminar |
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FSA's interpretation of the Unfair Terms in Consumer Contracts Regulations 1999 - January 2009 |
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Treating Customers Fairly and Fairness in Contract Terms - July 2007 |
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Towards fairer outcomes for consumers through principles-based regulation - May 2007 |
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FCA drives changes to Buy Now, Pay Later (BNPL) firms' contract terms - February 2022 Statement about changes made by four Buy Now, Pay Later (BNPL) firms to their contract terms. The 4 firms are Clearpay, Klarna, Laybuy and Openpay. The statement also contains guidance for firms in this sector offering unregulated BNPL products. The statement covers the following types of terms:
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Automatic renewal of fixed-term bonds - July 2013 |
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FSA’s response to the Law Commission’s issues paper entitled ‘Unfair terms in consumer contracts: a new approach? – October 2012 |
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Statement on using Switching Terms in mortgage contracts under the Unfair Terms in Consumer Contracts Regulations 1999 - January 2012 |
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Unfair contract terms: improving standards in consumer contracts - January 2012 |
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Legal expenses Insurance revisited - June 2011 |
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Statement regarding 'have read and understood' declarations - June 2010 |
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The use of commission clawback terms in Terms of Business Agreements - January 2010 |
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Responsibilities and liabilities of insurance comparison websites - December 2009 |
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FSA and firms reach agreement on MPPI - October 2009 |
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Reminder to firms on the importance of undertakings - December 2008 |
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A statement regarding terms which use the phrase 'consequential loss' in general insurance contracts - July 2008 |
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Fairness of terms in consumer contracts: a visible factor in firms treating their customers fairly - June 2008 |
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Fairness of terms in consumer contracts: Statement of good practice on mortgage exit administration fees (MEAFs) - January 2007 |
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Statement of Good Practice - May 2005 |
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Early Repayment Charges - March 2007 |
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Memorandum of Understanding - December 2015 The FCA and CMA both have consumer protection powers in relation to the UTCCRs and the CRA. |
Withdrawn material
In March 2015 and May 2016, we withdrew some material as it no longer reflected the FCA’s view on unfair contract terms. This material is indicated in the table above. Where undertakings have been withdrawn from the FCA website, they are still binding between the firm who provided the undertaking and the FCA. However, other firms should no longer rely on the content of them as they may no longer reflect the FCA’s current view on unfair contract terms.