UNFCOG 1.3 The CRA

1. (1)

    Part 2 of the CRA applies, with certain exceptions, to a contract between a trader and a consumer. Part 2 of the CRA also applies to consumer notices.

2. (2)

    Terms or notices cannot be reviewed for fairness within the meaning of the CRA if they reflect:

   1. (a)

       mandatory statutory or regulatory provisions; or

   2. (b)

       the provisions or principles of an international convention to which the United Kingdom is a party.

3. (3)

    Terms which are transparent and prominent (as defined in section 64 of the CRA) cannot be reviewed for fairness within the meaning of the CRA to the extent that:

4. • they specify the main subject matter of the contract; or
5. • the assessment is of the appropriateness of the price payable under the contract by comparison with the goods, digital content or services supplied under it.
6. However, we can fully review terms concerning these matters for fairness within the meaning of the CRA if they are not sufficiently transparent and prominent.

7. (4)

    The exemption regarding the subject matter and contract price applies only where the conditions in (3) are satisfied. It does not apply to a term of a contract listed in Part 1 of Schedule 2 to the CRA.

8. (5)

    It is a requirement under section 68 of the CRA that a written term of a consumer contract, or a consumer notice in writing, is transparent.

Under section 62(4) of the CRA, terms or notices are unfair if, contrary to the requirement of good faith, they cause a significant imbalance in the parties' rights and obligations to the detriment of the consumer.

1. (1)

   As an unfair contract terms enforcer under Schedule 5, we have powers in relation to the production of information. Under paragraph 14 of Schedule 5, an enforcer or an officer of an enforcer may give notice to a person requiring the person to provide the enforcer with the information specified in the notice.

1. (1)

    Unless the case is urgent, we will generally first write to a firm to express our concern about the potential unfairness of a term or terms (within the meaning of the CRA) and will invite the firm to comment on those concerns. If we still believe that the term is unfair and/or is insufficiently transparent, we will normally ask the firm to stop using or proposing or recommending the use of that term in a consumer contract. If the firm continues to rely on that term or declines to give an undertaking, or gives an undertaking but fails to follow it, the FCA will consider the need to apply to the courts for an injunction under paragraph 3 of Schedule 3.

2. (2)

    In deciding whether to ask a firm to undertake to stop using or proposing or recommending the use of a term in a consumer contract, we will consider the full circumstances of each case. Several factors may be relevant for this purpose and the following list is not exhaustive, but will give some indication of the sorts of things we consider:

   1. (a)

       whether we are satisfied that the contract term may properly be regarded as unfair and/or insufficiently transparent within the meaning of the CRA;

   2. (b)

       the extent and nature of the detriment to consumers resulting from the term or the potential harm which could result from the term;

   3. (c)

       whether the firm has fully cooperated with the FCA in resolving our concerns about the fairness and/or transparency of the particular contract term.

1. (1)

    In relation to a consumer notice, where we are concerned about the potential unfairness and/or lack of transparency of the notice, we will generally contact a firm to ask the firm to amend or withdraw the notice.

2. (2)

    The FCA can also ask a firm to undertake to amend or withdraw a consumer notice. Under paragraph 6 of Schedule 3, a regulator may accept an undertaking from a person against whom it has applied, or thinks it is entitled to apply for an injunction or interdict. The undertaking may provide that the person will comply with the conditions that are agreed between the person and the regulator about the use of terms or notices, or terms or notices of a kind, specified in the undertaking.

1. (1)

   Under paragraph 3 of Schedule 3, a regulator may apply for an injunction or (in Scotland) an interdict against a person if the regulator thinks that:

   1. (a)

      the person is using, or proposing or recommending the use of, a term or notice to which Schedule 3 applies; and

   2. (b)

      the term or notice:

      1. (i)

         purports to exclude or restrict liability of the kind mentioned in paragraph 3(2) of Schedule 3; or

      2. (ii)

         is unfair to any extent; or

      3. (iii)

         breaches the transparency requirement.

2. (2)

   A regulator may apply for an injunction or interdict in relation to a term, whether or not it has received a relevant complaint about the term.

3. (3)

   The FCA is a regulator for the purposes of Schedule 3. Our approach to seeking an injunction under the CRA is set out in ENFG App 1.1 .

Under sections 62 and 67 of the CRA, an unfair term is not binding on the consumer but the contract will continue to bind the parties if it is capable of continuing in existence without the unfair term. If the court finds that the term in question is unfair, the firm would have to stop relying on the unfair term in existing and future contracts governed by the CRA.

Under section 62 of the CRA, an unfair consumer notice is not binding on the consumer.