FCA Consultation on Unfair Terms
On 17 May 2018, the FCA launched a consultation on proposed guidance on variation terms under unfair terms legislation (GC18/2).
The consultation follows the previous withdrawal of historic unfair terms guidance following the introduction of the Consumer Rights Act 2015. The consultation document briefly discusses the historic situation, the legislative provisions and the relevant case law before setting out the draft guidance.
The draft guidance highlights matters which the FCA believe firms should consider when drafting variation clauses, including:
- The validity of the reason(s) for varying a term
- The transparency of the variation term
- Provision for notice in the variation term
- Provision for freedom to exit the contract should a consumer not wish to accept the variation
The draft guidance also sets out the FCA’s provisional view on various “valid reasons” often included in firms’ variation clauses.
The consultation document is available in full here: GC18/2
Responses are required by 7 September 2018.