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Briefing Note 025/06
27 July 2006

Both the Office of Fair Trading and the Financial Services Authority have powers in relation to unfair contract terms under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), and we continue to co-ordinate enforcement action and co-operate to ensure the effective and consistent delivery of consumer protection in this area.

The revised framework for this co-ordination is set out in a new Concordat signed between the organisations which comes into effect on 31 July 2006.

The OFT and FSA will ensure that:

  • any action they take is necessary and propotionate where there is evidence of a potential breach of the UTCCRs and of potentrial consumer harm stemming from the breach; and
  • business, in normal circumstances, is given a reasonable opportunity to stop relying on unfair terms, removing or revising them as appropriate, before formal action is taken.
    Under the Concordat the OFT and and the FSA will consult and liaise to reduce duplication of effort and to promote appropriate action by the body best placed to lead on an issue.

The Concordat provides that the FSA will consider the fairness under the UTCCRs of standard terms in financial services contracts issued by authorised firms or their appointed representatives for regulated activities. This will include contracts for mortgages and the selling of mortgages; insurance and the selling of insurance; bank, building society and credit union savings accounts; pensions; investments; and long term savings.

Notes to editors

  1. The Concordat comes into effect on 31 July 2006 and replaces the 2001 Concordat between the OFT and the FSA.
  2. The OFT and FSA published in April 2006 a joint Action Plan setting out how they would work together more closely and effectively on matters of mutual interest.