What is section 140A of the Consumer Credit Act 1974?

What it is

Section 140A of the Consumer Credit Act 1974 was added by amendments in 2006 and came into force in 2007. It gives a UK court the power to examine the relationship between a lender (the creditor) and a borrower (the debtor) and decide whether that relationship is unfair to the borrower. It is a backwards-looking, fact-specific test — the court weighs the whole picture, not just one clause in isolation.

The unfairness can arise from three places: the terms of the agreement itself; the way the lender or anyone acting on its behalf exercised or enforced its rights; or any other thing done, or not done, by or on behalf of the lender. That third limb is the one that matters for motor finance. It reaches conduct outside the four corners of the agreement, including how a dealer or broker arranged the deal, what commission was paid, and what the borrower was told about it. If a court finds the relationship unfair, section 140B sets out the remedies it can order: reducing or wiping out amounts the borrower still owes, requiring repayment of sums already paid, altering the terms going forward, or setting aside duties imposed by the agreement. The UK Supreme Court’s 2025 decision in Johnson v FirstRand confirmed that, on the facts of that case, undisclosed commission and an undisclosed lender-dealer tie made the relationship unfair under section 140A.

Why it matters for your claim

Section 140A is the legal framework that sits underneath the FCA’s 2026 motor finance redress scheme. The scheme operationalises the same fairness principles at scale, so most eligible borrowers will not need to argue the law themselves. If your agreement falls outside the scheme’s reference window, or your case is not picked up by the lender’s scheme processing, you can still bring an individual section 140A claim through the courts or escalate to the Financial Ombudsman Service, which applies equivalent fairness principles. The remedies a court can award under section 140B are broad — they are not limited to refunding the commission itself.