Unfair contract terms

Find out how consumers can report unfair terms and what we can do to tackle unfair contract terms in financial services contracts.

Some financial services contracts contain unclear or unfair terms. We have powers under the Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations) to challenge unfair terms in consumer contracts.

Examples of unfair contract terms

A contract term may be unfair if a company can:

  • charge you a large sum of money if you don’t fulfil the contractual obligations or cancel the contract
  • require you to fulfil all of your contractual obligations, while letting the firm avoid its own obligations
  • tie you into the contract while the firm decides whether to provide the service
  • automatically renew a fixed-length contract where the deadline for you to cancel is unreasonably short
  • change the terms of the contract, without transparently setting out the circumstances in which they may do so
  • bind you to hidden terms, or
  • exclude or limit your legal rights unfairly

Report unfair contract terms 

If you want us to look at a contract term you think is unfair, use our online reporting form

If you need our help you can email our consumer helpline consumer.contracts@fca.org.uk, or
phone us on 0800 111 6768.

You can write to us at:

Consumer Contracts Team, Financial Conduct Authority, 25 The North Colonnade, London, E14 5HS 

What we can do

We can look at contract terms relating to most financial products and services. We consider all reports of unfair contract terms and decide if we’ll take action against a company. 

We can tackle unfair contract terms by asking a company to:

  • amend a term
  • remove a term
  • not enforce a term, or
  • apply to the court for an injunction to prevent it using or enforcing the term

Only a court has the power to make a final decision on whether a term is unfair.

If you think a contract is unfair, please use our unfair contract checklist to see if we can deal with it and then report it to us.

What we can’t do

We can’t resolve an individual dispute you have with a firm or arrange compensation. If you have an individual dispute, contact the firm directly in the first instance. You may then refer the dispute to the Financial Ombudsman Service.

If you’re unhappy with a financial product or service, follow our steps on how to complain.

We cannot act on terms in financial services contracts that:

  • have been individually negotiated between you and a firm
  • appear in contracts between two businesses
  • appear in contracts between two individuals
  • appear in contracts signed before 1 July 1995, or
  • set the price or define the product or service being supplied

Last updated: 12 Jan 2016

First published: 06 May 2015