CONC 2.5A Conduct of business: high-cost short-term credit (HCSTC) products on price comparison websites
Application
1This section applies to a firm which owns or operates a website that displays any terms on which high-cost short-term credit products are available from different lenders (referred to in this section as a “price comparison website”) and in relation to which it:
- (1)
holds itself out as providing a price comparison service or a price service; or
- (2)
describes itself in any way as a price comparison website or a price website; or
- (3)
gives the impression in any way that the website is a price comparison website or a price website.
Listing details of high-cost short-term loans not based on commercial interests or relationships
Where a firm lists information on the website it owns or operates concerning high-cost short-term credit products in order to enable a customer to compare any terms of those products, it must display the information in a way that neither the ranking of products nor the prominence of display of products is based (wholly or partly) on the firm’s commercial interests or its commercial relationship with any person.
HCSTC price comparison website functionality
A firm must ensure that the price comparison website enables:
- (1)
a customer to enter the value and duration of the customer’s desired loan when specifying the criteria for a search; and
- (2)
a search to be made of the high-cost short-term credit products covered by the website and the results of the search to be displayed on the basis of only that information.
- (1)
A firm’s obligations under CONC 2.5A.3R(1) and (2) may be satisfied by enabling a customer to select from a reasonable range of options of values of loan or of durations of loan, when specifying the criteria for a search.
- (2)
What is a reasonable range of options for a search will depend, for example, on the breadth of value of loans or on the duration of loans that appear on the price comparison website. For example, it may be reasonable depending on the circumstances to allow a choice of bands of values or durations.
In response to a request to perform a search for a high-cost-short-term credit product, the firm must ensure that the price comparison website:
- (1)
displays specific information relating to each loan covered by the website which corresponds to the search criteria entered by the customer as a separate result;
- (2)
ranks those results in order of total amount payable in accordance with CONC 3.5.5R(2), with the loan with the lowest total amount payable first and the highest last; and
- (3)
where two or more search results have the same total amount payable in accordance with (2), ranks the results according to another criterion permissible under CONC 2.5A.
A firm must ensure that neither:
- (1)
the ranking of the results of a search for a high-cost-short-term credit product, nor
- (2)
the prominence of the display of the results of such a search, nor
- (3)
whether a loan from a lender or credit broker, whose loans the firm arranges to compare or claims to compare, is displayed in the results of such a search,
is based (wholly or partly) on the firm’s commercial interests or its commercial relationship with any person.
- (1)
The information displayed on the price comparison website (for example, information concerning a loan, the results of a search or claims about the market coverage of the website) will need to comply with the financial promotion rules in CONC 3. In particular, it will need to comply with the requirement for a communication or a financial promotion to be clear, fair and not misleading. The results of a search also need to comply with the detailed rules in CONC 3.5. In particular, the results will require a representative example. The relevant items of the representative example must be representative of what the firm reasonably expects, at the date on which the financial promotion is made, to be representative of credit agreements to which the representative APR applies and which are expected to be entered into as a result of the promotion.
- (2)
The fact that a lender or credit broker pays a commission to the firm or pays for advertising or other marketing on the price comparison website (and the amount of any such commission or payment) should not affect the ranking or prominence of display of the results of a search. Such payment should also not affect whether information about a loan from a lender or credit broker whose loans the firm arranges to compare or claims to compare appears in the results of a search.
- (3)
CONC 2.5A.6R does not require the firm to compare loans from a lender or credit broker where it has not arranged to do so with that lender or credit broker nor where it does not claim to compare loans from that lender or credit broker.
- (4)
The firm should ensure that any information concerning a loan or any result of a search which relates to another firm’s credit broking service states prominently that:
- (a)
the firm referred to is a credit broker and is not a lender; or
- (b)
if the firm referred to is both a lender and a credit broker, the firm referred to is promoting its services as a credit broker and not its services as a lender.
- (a)
- (5)
CONC 2.5A.6R does not prevent the firm, once the initial results have been displayed in order of total amount payable, permitting a customer to re-sort the results of a search into a different order.
HCSTC price comparison website financial promotion
A firm must not display a financial promotion, other than the result of a search, in or between the results of a search.
A firm must ensure that the results of a search are clearly distinguishable from any other financial promotion.
A result of a search may include a hyperlink to the website of the lender or credit broker in question.
HCSTC price comparison website market coverage
A firm must list in one place on the price comparison website the brand names of lenders whose high-cost short-term credit products are displayed on the website.