FCA explains how it tackles unfair terms in loan, card and insurance contracts

What has happened

The Financial Conduct Authority (FCA) published a blog on 6 November 2026 about the terms and conditions in consumer contracts for financial products. All firms must make sure their terms meet the fairness and transparency requirements of the Consumer Rights Act 2015. The FCA's Consumer Contracts team can challenge firms directly when they do not.

When the FCA raises concerns, it expects the firm to amend or delete the term, stop relying on it in existing contracts, and pay redress if the term has harmed customers. In some cases the firm gives the FCA a voluntary undertaking. If needed, the FCA can ask a court for an injunction to stop a firm using a term, and for an order to pay redress.

The FCA gave four examples. A crypto firm stopped charging inactive customers storage fees that in some cases could exceed £40,000 a year, and paid redress. A financial adviser removed a term that let it charge a customer £800 for time spent handling a complaint, because it could put people off complaining. A travel insurer clarified what counted as a 12-hour delay and paid £18,000 in redress for claims wrongly turned down. A lender gave clearer information on costs and cancellation rights in a new credit product after the FCA raised concerns before launch.

The FCA finds terms to look at through its supervision of firms, social media, and reports from consumers. It says every report it receives is considered.

What it means for you

If a term in your loan, credit card, mortgage or insurance contract is unfair, the firm cannot enforce it against you. The FCA's consumer page lists signs to watch for. A term might let the firm change the contract without telling you or explaining why, bind you to hidden terms, limit your legal rights unfairly, charge an unreasonably large sum if you break the contract, renew automatically without a right to cancel, or be worded so it can be read in more than one way. A term that looks like one of these is not automatically unfair. It depends on the contract as a whole.

There are two separate routes, and they do different jobs. Reporting a term to the FCA helps stop a firm using it against everyone, but the FCA says it cannot tell you what action it takes, so a report on its own will not put money back in your pocket. Complaining to the firm, and then to the Financial Ombudsman Service if you are unhappy with the answer, is how you seek a fix for your own case. You can do both at the same time.

The FCA can only look at contracts between a consumer and a business, for a financial product, entered into on or after 1 July 1995. If your concern is how the firm treated you rather than how a term is written, the FCA's form will send you to its complaints guidance instead.

Who it affects

Anyone with a personal loan, credit card, mortgage, bank account, insurance policy or other financial contract who is facing a charge or decision they think a term does not fairly allow.

What you can do

• Find the exact wording. Get a copy of your contract and mark the term the firm is relying on. Note when you signed up, what the firm charged or refused, and any letters or emails about it.
• Complain to the firm first if you have lost out. Say which term you are disputing, why you think it is unfair or unclear, and what you want: for example, a charge refunded or a claim paid. Our guide on how to complain about a lender walks through each step, and our answer on Financial Ombudsman time limits explains when to escalate.
• Report the term to the FCA as well. Use the FCA's report form, attaching the contract and any letters, or write to the Consumer Contracts Team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN. It is free, and it could protect other customers.
• If a disputed charge has left you behind on payments, get free debt advice from MoneyHelper, StepChange, National Debtline or Citizens Advice while the complaint is looked at. Our list of where to get free debt advice has the details.

Sources

Every fact in this page was checked against these official sources on 7 November 2026.

1. The not-so-fine print: making consumer contracts fair Financial Conduct Authority
2. Unfair contracts Financial Conduct Authority
3. Report an unfair contract term Financial Conduct Authority

Written and fact-checked by the PiggyBank editorial team. Published 7 November 2026. This news is general information, not financial advice. How we write and check our guides.