On 6 November 2026, the Financial Conduct Authority (FCA) published a blog in relation to the fairness of consumer contracts and how the FCA can use its powers to tackle harm.

Background

The FCA highlights that all firms are responsible for making sure that terms in their consumer contracts comply with the fairness and transparency requirements of the Consumer Rights Act (CRA) 2015. When those terms don’t comply, the Consumer Contracts team at the FCA has powers to challenge firms directly and if a term is found to be unfair, it’s not just unenforceable as consumers may be due redress too.

Summary

The FCA sets out that it will consider its rules and guidance, including the Consumer Duty, when deciding whether to act and which of its regulatory tools to use, and may expect firms to:  

  • Amend or delete the relevant terms so that the contract is fair and transparent and stop relying on those terms in existing contracts.
  • Pay redress to consumers if the firm’s use of the terms has caused harm.
  • In some cases, give the FCA a voluntary undertaking under the CRA.  

Where necessary, the FCA explains that it can apply for a court injunction to prevent a firm from using or enforcing the term against its customers and may seek a court order requiring it to pay redress.  

The FCA also sets out that it expects that firm should regularly check that their consumer contracts are fair, clear and transparent, and that they’re being used fairly in practice, including:

  • Taking into account consumers’ legitimate interests when designing contracts.
  • Using plain language, so customers understand what they’re agreeing to: for example, what they might have to pay and what rights they have.
  • Avoiding surprises, by making important terms, fees, cancellation rights, variations, exclusions, complaints, easy to spot.
  • Reviewing contracts regularly to stay compliant with the latest requirements, rulings and judgments, and to learn from complaints, claims, cancellations, fees, customer outcomes and other data.
  • Testing whether customers actually understand key terms, not just assuming they do.
  • Improving staff training to ensure staff meet the standards set out in product literature, including contracts. Using complaints data to identify potentially unfair or unclear contract terms and make appropriate changes.

Next steps

The FCA explains that if consumers are concerned about an unfair or unclear term in a financial services firm’s consumer contract, they can report it to the FCA.