'Read and Understood' Not Enough, Says FSA

When purchasing goods or services on the Internet, it is common for websites to include, normally at a stage before a contract is formed, a tick-box which must be completed to confirm that you have read and understood the necessary terms and conditions.

This may be all well and good when a contract is relatively straightforward, but the Financial Services Authority (FSA) recently claimed that where contracts involving regulated financial products are concerned, such an approach is insufficient and constitutes a breach of the Unfair Terms in Consumer Contracts Regulations 1999.

According to the FSA, consumers must be given a clear warning that they should read and understand the contract terms before agreeing to them and should make any necessary enquiries regarding any terms they do not fully understand.

The logic for this is that it is well known that consumers often do not read the small print of contracts and just tick the appropriate box as a matter of course.

Businesses using standard contractual terms in their contracts with the public should ensure that these are fair, clear and easily understood by those reading them and that consumers have a proper opportunity to read and consider them before the contract is formed.