Lenders warned over unfair terms in interest-only contracts

The regulator said it believes some switching terms in standard consumer contracts risk being considered unfair, or of not being expressed in plain and intelligible English, under the Unfair Terms and Consumer Contracts Regulations 1999. In the FSA's view, a switching term is likely to be unfair under the regulations if it gives the firm too broad a discretion to determine when the switching term will apply. Under the regulations, a term is unfair if it causes a significant imbalance in the rights and obligations of the parties to a consumer's detriment, contrary to the requirement of...