Barclays’ terms and conditions for the bond stated that it may alter the terms of the agreement and introduce changes to its services following changes in legal, tax, regulatory requirements or for “any other good reason”.
The FSA says this gives Barclays excessive discretion to vary the contract.
The FSA adds: “We think a reference to ‘any other good reason’ is not a clearly and unambiguously defined valid reason. We think that by including this open-ended phrase in the term, the firm has not specified a valid reason for varying the contract.”
Barclays’ terms and conditions also include a clause that states “changes will normally be caused by” and “we will normally give you at least 30 days’ advance notice of any changes which are to your disadvantage…”.
The regulator ruled that the use of the word “normally” introduces too much ambiguity.
Barclays has agreed to remove “for any other good reason” from contracts issued after April 2006 and will disregard the term “normally” with immediate effect.