ENF 20.1 Application and purpose

1This chapter explains the FSA's policy on how it will use its powers under the Unfair Terms Regulations.

The FSA has agreed with the Office of Fair Trading that the FSA will consider the fairness within the meaning of the Unfair Terms Regulation of financial services contracts for carrying on:

1. (1)

   any regulated activity;

2. (2)

   general insurance, including broking;

3. (3)

   lending, administration, advising and arranging in respect of mortgages where the lender takes a first legal charge over property in the United Kingdom and the property is at least 40% occupied by the borrower or by a member of his immediate family

The Office of Fair Trading will consider the fairness within the meaning of the Unfair Terms Regulations of other financial services contracts involving carrying on activities governed by the Consumer Credit Act 1974, including second charge mortgage loans, buy to let mortgages, and non-mortgage personal loans (including credit cards). Further, where the firm concerned is not a firm or an appointed representative, the Office of Fair Trading may take enforcement action under the Unfair Terms Regulations in respect of financial services contracts involving the carrying on of activities within ENF 20.1.2 G (see ENF 20.4.6 G (5) and (6)).

This chapter therefore applies to:

1. (1)

   firms;

2. (2)

   appointed representatives; and

3. (3)

   other persons, whether or not a person with permission, who are using, or recommending the use of contracts, for carrying on the activities set out in ENF 20.1.2 G.

This chapter uses 'firm' to refer to all persons covered by ENF 20.1.4 G.