UNFCOG 1.4 The CRA: the FCA's role and policy

The FCA may consider the fairness and/or transparency of a term or notice within the meaning of the CRA following a complaint from a consumer or other person or on its own initiative if the term or notice is within its scope.

There are three main ways in which we might receive a complaint from a consumer or other person. These are:

1. (1)

   directly; or

2. (2)

   from another regulator which considers that the FCA should deal with the complaint; or

3. (3)

   from the CMA.

1. (1)

   The main way in which we would act on our own initiative is to undertake a review of contracts or consumer notices in a particular area of business. This might involve looking at the terms or notices used by several firms in a particular sector.

2. (2)

   We will, for example, consider launching such a review if multiple consumer complaints or other intelligence lead us to believe that under the CRA there may be an issue relating to contracts or notices of wider significance to firms and consumers.

If, following either a complaint or an own-initiative review, we consider that a term or notice is unfair and/or insufficiently transparent, we may challenge firms about their use of that term or notice.

1. (1)

    The FCA will consider using its powers under the CRA in the context of its wider regulatory powers under the Act.

2. (2)

    In some cases, it might be appropriate for us to use other powers to deal with issues identified under the CRA. The powers available to the FCA under the Act may vary depending on the regulated activities which the firm carries out. For example, the use of an unfair term might involve a breach of a Principle or a rule in BCOBS, COBS, CONC, MCOB or ICOBS and the use of an unfair notice might involve a breach of the financial promotions rules. If the same level of consumer protection can be achieved in relation to a contract term we have concerns about, the FCA may address the issue as a breach of its rules, Principles or both, rather than taking action under the CRA.

3. (3)

    We may, in some circumstances, consider treating the matter under our powers in the Act itself and also under the CRA.

4. (4)

    However, the use of our powers under the Act will not be possible in all cases where a firm has used an unfair term. If we consider using an enforcement power under the Act, we will do so in accordance with the policy relating to that power as set out in ENFG.