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CMCOB 6.2 Fees and fee collection

Explanation of fees and charges

CMCOB 6.2.1R
  1. (1)

    1A firm must provide the customer with an itemised bill, in a durable medium:

    1. (a)

      if the agreement is terminated under CMCOB 2.1.12R(2)(b), before the firm takes any payment (for example, using payment details provided by the customer); or

    2. (b)

      before the firm takes or deducts its fees and charges from money received from a third party for onward transmission to the customer; or

    3. (c)

      when the firm presents an invoice or request for payment to the customer.

  2. (2)

    The itemised bill must explain:

    1. (a)

      what claims management services the firm has provided; and

    2. (b)

      how the fees and charges have been calculated including, where relevant, by reference to the full amount of any money recovered for the customer in respect of damages or compensation, or in settlement of the claim.

  3. (3)

    A firm must not take or deduct its fees and charges from money received from a third party for onward transmission to the customer without the customer’s consent.

  4. (4)

    2Where the FS claims management fee cap applies to any of the services to which the itemised bill relates, the bill must:

    1. (a)

      explain whether any of the services to which the bill relates fall outside the scope of the FS claims management fee cap ; and

    2. (b)

      clearly identify the charges for those services.

CMCOB 6.2.2G

1Firms are reminded that they may be carrying on a credit-related regulated activity if they permit customers to enter into instalment plans or give them an extended period of time to pay fees and charges later than the date on which they are payable (see PERG 2.7.19AG and 2.7.19GG).

Fee collection

CMCOB 6.2.3R

1A firm must establish and implement clear, effective and appropriate policies and procedures for:

  1. (1)

    dealing with customers who are unable to pay fees and charges to the firm when they fall due; and

  2. (2)

    the fair and appropriate treatment of customers in (1) whom the firm understands or reasonably suspects to be vulnerable.

CMCOB 6.2.4R
  1. (1)

    1If a customer is unable to pay fees and charges to the firm when they fall due, a firm must:

    1. (a)

      treat the customer with forbearance and due consideration, including by allowing the customer a reasonable opportunity to pay the fee and charges; and

    2. (b)

      where appropriate, direct the customer to sources of free and independent debt advice.

  2. (2)

    A firm must not impose charges on a customer who is unable to pay fees and charges to the firm when they fall due unless the charges are no higher than necessary to cover the reasonable costs of the firm.

CMCOB 6.2.5G
  1. (1)

    1Customers who have mental health difficulties or mental capacity limitations may fall into the category of particularly vulnerable customers.

  2. (2)

    In developing procedures and policies for dealing with customers who may not have the mental capacity to make financial decisions, firms may wish to have regard to the principles outlined in the Money Advice Liaison Group (MALG) Guidelines “Good Practice Awareness Guidelines for Consumers with Mental Health Problems and Debt” (March 2015).

    [Note: see http://malg.org.uk/resouces/malg-mental-health-and-debt-guidelines/]

  3. (3)

    A firm should suspend the pursuit of the recovery of fees and charges from a customer who is unable to pay those fees and charges when they fall due, when:

    1. (a)

      the firm has been notified that the customer might not have the mental capacity to make relevant financial decisions and/or to engage at the time in the process for recovery of unpaid fees and charges; or

    2. (b)

      the firm understands or ought reasonably to be aware that the customer might not have the mental capacity to make relevant financial decisions and/or to engage at the time in the process for recovery of unpaid fees and charges.

CMCOB 6.2.6R

1A firm must not take or deduct its fees and charges from money received from a third party for onward transmission to the customer unless it has written consent from the customer to do so, whether given in the firm’s agreement with the customer or by some other means.