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CONC 3.7 Financial promotions and communications: credit brokers

Application

CONC 3.7.1RRP

This section applies to a financial promotion or a communication with a customer in relation to credit broking in relation to a regulated credit agreement.

CONC 3.7.2RRP

CONC 3.7.4 G also applies to a financial promotion or a communication with a customer in relation to the activities specified in article 36A(1)(a) or (c) of the Regulated Activities Order in relation to a credit agreement that would be a regulated credit agreement but for the relevant provisions.

CONC 3.7.2ARRP

2CONC 3.7.5 R to CONC 3.7.8 G:

  1. (1)

    apply to a financial promotion or a communication with a customer in relation to credit broking whether or not it is in relation to a regulated credit agreement; but

  2. (2)

    do not apply to a financial promotion or a communication with a customer which clearly indicates that it is made solely in respect of credit broking in relation to a credit agreement secured by a legal or equitable mortgage on land.

2Credit brokers’ registered name, and status2

CONC 3.7.3RRP

A firm must, in a financial promotion or a document which is intended for individuals which relates to its credit broking, indicate the extent of its powers and in particular whether it works exclusively with one or more lenders or works independently.

[Note: section 160A(3) of CCA]

[Note: article 21(a) of the Consumer Credit Directive]

CONC 3.7.4GRP

A firm should in a financial promotion or in a communication with a customer:

  1. (1)

    make clear, to the extent an average customer of the firm would understand, the nature of the service that the firm provides;

    [Note: paragraphs 3.7e and 4.8b of CBG]

  2. (2)

    indicate to the customer in a prominent way the existence and nature3 of any financial arrangements with a lender that might impact upon the firm's impartiality in promoting or recommending a credit1 product to the3 customer or which might, if disclosed by the firm to the customer, affect the customer’s transactional decision in relation to the credit product3;

    [Note: paragraphs 2.2, 6th bullet and 4.6 of CBG]

    1
  3. (3)

    only describe itself as independent if it is able to provide access to a representative range of credit1 products from the relevant product market on competitive terms and is not constrained in providing such access, for example, because of one or more agreements with lenders; and

    [Note: paragraph 4.5 of CBG]

    1
  4. (4)

    ensure that any disclosure about the extent of its independence is prominent and in accordance with the clear, fair not misleading rule in CONC 3.3.1 R, clear and easily comprehensible.

    [Note: paragraph 4.6 of CBG]

CONC 3.7.4AG
  1. (1)

    3Where the amount of any commission, fee or other remuneration payable under a financial arrangement in relation to the credit product in CONC 3.7.4G(2) that the firm is promoting or recommending varies due to a factor specified in the arrangement, for example a specific feature of the credit product or the level of work undertaken by the firm, the firm should make disclosure under CONC 3.7.4G in relation to the arrangement.

  2. (2)

    Where:

    1. (a)

      the firm has entered into arrangements (irrespective of how many other persons those arrangements are with) under which it may earn commission, fees or other remuneration in relation to two or more different credit products;

    2. (b)

      the customer could be eligible for two or more of those credit products;

    3. (c)

      the credit product that the firm is promoting or recommending is one of those credit products; and

    4. (d)

      the commission, fees or other remuneration payable to the firm varies depending on which of the credit products the customer takes out,

    the firm should make disclosure to the customer under CONC 3.7.4G in relation to the arrangements.

  3. (3)

    The disclosure in (2) may be in general terms, but it should enable the customer reasonably to appreciate the effect of the arrangements.

CONC 3.7.5RRP

2A firm must ensure that a financial promotion or a communication with a customer specifies the legal name of the firm as it appears in the Financial Services Register and not merely a trading name.

CONC 3.7.6GRP

2CONC 3.7.5 R requires all financial promotions and communications with customers to specify the legal name of the firm: the rule does not prohibit the use of trading names, but does require the legal name to be given in addition to any trading name used. If the firm is a company registered under the Companies Act 2006, the firm's legal name will be the name by which it is registered.

CONC 3.7.7RRP
  1. (1)

    2A firm which is a credit broker and not a lender must ensure that any financial promotion states prominently that the firm is a credit broker and that it is not a lender.

  2. (2)

    A firm which is both a credit broker and a lender must ensure that any financial promotion that solely promotes its services as a credit broker states prominently that the financial promotion is promoting the firm's services as a credit broker and not its services as a lender.

CONC 3.7.8GRP

2For the purposes of CONC 3.7.7 R, a statement will not be treated as prominent unless it is presented, in relation to other content of the financial promotion, in such a way that it is likely that the attention of the average person to whom the financial promotion is directed would be drawn to it.