Unfair contract terms

June 2008

Fairness of terms in consumer contracts: a visible factor in firms treating their customers fairly [PDF]

We have published a report reminding firms that fair contract terms is a key and very visible part of their obligations to treat their customers fairly. It follows work we have done to measure firms' awareness of and compliance with the Regulations.

We found that while most firms had some systems and controls in place to review the fairness of their standard consumer contract terms, these are not producing the right outcomes – we were disappointed to find that over half of the sample of contracts that we reviewed contained at least one variation term which was, in our view, unfair under the Regulations.

The report informs firms of our findings and shares examples of good and poor practice. We expect firms to proactively review their standard contracts with consumers for fairness and we remind firms that unfair contract terms can provide evidence that they are failing to treat their customers fairly.

May 2008

Undertaking: UK Underwriting Limited [PDF]

We have received an undertaking from UK Underwriting Limited. The firm has agreed to revise various terms on the certificate of insurance and Key Facts document of a Debenhams annual multi-trip travel insurance 2007 contract, which in our view did not make clear to consumers the extent of the cover when a family member travelled alone. It was also unclear whether the policy covered children under 18 when they travel independently of the family unit.

UK Underwriting Limited was fully cooperative in agreeing to this undertaking.