See our work on unfair contract terms including past undertakings, agreements and other publications.
Latest update: 9 May 2024
We have published an undertaking under the Consumer Rights Act 2015 from Mercedes-Benz Financial Services (UK) Limited[1]. This is on a potentially unclear excess mileage term in some of the firm’s consumer vehicle hire purchase agreements.
The firm has been fully cooperative in providing this undertaking.
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[2] 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[3].
Publications
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.
