Director of Fair Trading v First National Bank [2001]

On behalf of all consumers, the Director General of Fair Trading (now the Office of Fair Trading) brought an action to test the fairness of clauses in loan agreements that secure commercial interest rates for a bank after a debtor defaulted and they had been to court to determine their repayment scheme.
The statutory interest rates do not apply to consumer credit agreements, so the bank had inserted a clause into their loan agreement seeking to claim interest.

HELD:
The House of Lords held that the clause was not a core term and therefore fell within the UTCCR 1999. It was decided that the clause did not cause an imbalance to the detriment of the consumer, so it was fair and valid. The absence of such a term would cause an imbalance to the detriment of the bank.

Citation: Director General of Fair Trading v First National Bank [2001] UKHL 52