Cycle insurance provider gives undertaking to the FCA on the fairness of a term

On 26 June 2019, the UK Financial Conduct Authority published an undertaking given by ETA Services Limited about the fairness of a term in its cycle insurance policy. The undertaking was given under the Consumer Rights Act 2015.

The FCA’s concern was over the transparency of a term allowing ETA Services Limited to reject a claim if a bicycle had not been secured using an approved lock. This term appeared to conflict with another term saying a claim would be rejected if the bicycle had been left in a communal building and not secured to an immovable object (so no mention of an approved lock).

ETA Services Limited told the FCA that since 1 April 2019, the terms had been revised so that, to be covered, a bicycle needed to be secured using an approved lock when left in communal buildings. ETA Services Limited, and the insurer, also assured the FCA that redress had been paid to consumers who had claims rejected because they did not use an approved lock in communal areas.

FCA publishes undertaking given by James Brearley & Sons Limited about the fairness of a term allowing it to immediately end a contract

On 9 May 2019, the UK Financial Conduct Authority published an undertaking given by James Brearley & Sons Limited about a term allowing it to end a contract by giving “written notice at any time”.

The FCA considered such a term was potentially unfair under Regulation 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 and Section 62(4) of the Consumer Rights Act 2015.

The firm agreed to stop using the term and replace it with a term saying it needed to give a customer twenty business days’ notice if it wanted to stop providing the services to them.

ECJ decides an employer offering a loan to an employee is a supplier for the purposes of the Unfair Contract Terms Directive

On 21 March 2019, the European Court of Justice gave its decision in Pouvin v Electricité de France (Case C 590/17) on whether a French electricity provider (EDF) was a supplier for the purposes of the Unfair Contract Terms Directive (93/13/EEC) (the UCTD).  EDF provided a loan to one of its employees and his spouse to buy a house.  The ECJ decided EDF was acting for purposes relating to its “trade, business or profession” and was therefore a supplier for the purposes of the UCTD.  

Because the employee was classed as a consumer, the French court must therefore consider if the terms of the loan are fair under France’s laws implementing the UCTD.  The broad interpretation of the definition of “supplier” helped achieve the UCTD’s objective of protecting the consumer (as a weaker party) and making sure there was balance in the relationship.