Lindsay Lee

The Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) have the power, under the Consumer Rights Act 2015 (CRA 2015) for contracts entered into from 1 October 2015 and under the Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083 (UTCCRs), for contracts entered into between 1 July 1995 and 30 September 2015, to challenge firms about the fairness of terms in standard form consumer contracts. This Practice Note explains the FCA’s approach and enforcement powers, including its powers to require undertakings and apply for injunctions under the CRA 2015 and the UTCCRs, as well as the FCA’s guidance in the FCA Handbook—the Unfair Contract Terms and Consumer Notices Regulatory Guide (UNFCOG) and supporting guidance. It includes FCA guidance on terms that may be considered unfair, in addition to examples of good and poor practice. It also discusses how complaints in relation to unfair terms may be raised and the avenues of redress open for consumers. It considers FCA action in practice with regard to changes to Buy Now, Pay Later (BNPL) firms’ contract terms. It also considers the relationship between the CRA 2015 and the FCA’s Consumer Duty, and the CRA 2015 and the SM&CR.

This Practice Note considers the application of the Consumer Duty to MCCL firms, and includes details of the scope of the Consumer Duty’s application to MCCL firms, the interaction of the Consumer Duty with pre-existing FCA rules and guidance, the implications for MCCL firms in complying with the cross-cutting rules under the Consumer Duty, the implications for MCCL firms in delivering the four consumer outcomes under the Consumer Duty, areas of potential difficulty for MCCL firms, implications for MCCL firms in implementing the Consumer Duty for closed products, and practical Consumer Duty steps post implementation.