Overview

This bill amends the Unfair Terms in Consumer Contracts Regulations 1999 to allow for the assessment of fairness in ancillary (additional) charges within personal financial services contracts. It clarifies what constitutes a "main price" versus an additional charge, ensuring that hidden or unexpected fees are subject to fairness checks.

Description

The bill modifies the 1999 regulations to explicitly include personal financial services contracts within the scope of unfair terms assessment. It introduces a new clause stating that the fairness of a term in a personal financial services contract shouldn't automatically relate to the definition of the main service or the main price. The bill introduces a new test for determining whether a charge is a "main price" or an additional charge. This test considers all circumstances when the contract was agreed, whether the charge depends on uncertain events and whether the consumer was likely to have considered the charge beforehand. Any charge deemed not to be the main price, because its occurrence is uncertain, will not be considered part of the main price when assessing fairness. In legal proceedings, a charge will be presumed not to be the main price unless proven otherwise.

Government Spending

The bill doesn't directly specify any changes to government spending. Its impact will likely be indirect, potentially affecting the financial services industry and consumer redress schemes, but the magnitude of such impacts cannot be currently determined.

Groups Affected

• Consumers: This bill could benefit consumers by increasing transparency and potentially reducing unfair charges in financial services contracts.
• Financial Services Providers: The bill may increase compliance costs for financial institutions, requiring them to review and potentially adjust their pricing practices.
• Regulators: The bill will impact regulatory bodies, such as the Financial Conduct Authority (FCA), who will need to interpret and enforce the new rules.

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