Before entering into a regulated credit agreement or regulated consumer hire agreement, or before a P2P agreement is entered into, under which the customer may grant a continuous payment authority, the firm must provide the customer with an adequate explanation of the matters in (2).
The matters referred to in (1) are:
what a continuous payment authority is and how it works;
how the continuous payment authority will be applied by the firm, including where the firm provides high-cost short-term credit that it may only be used twice to collect the whole sum due in relation to the agreement or where the agreement provides for repayment in instalments, in relation to an instalment;
whether alternative repayment options are available;
the choice of an appropriate due date for payment;
the choice of an alternative payment date (if applicable);
the consequences if sufficient funds are not available on the due date (or an alternative payment date if agreed);
whether further attempts may be made to collect payment and, if so, the basis on which further attempts would be made, the days or period over which the further attempts would be made and the frequency of the further attempts;
other than in relation to high-cost short-term credit, whether part payment (a sum due which less than the full sum due at the time the firm's payment request is made) may be sought and, if so, the basis on which and frequency with which payment would be sought and whether part payments would be subject to a minimum amount or percentage;
in relation to high-cost short-term credit, the firm will not seek part payment (a sum due which is less than the full sum due at the time the firm's payment request is made) unless the firm is willing to accept such less sum and, after being notified of that sum and when a payment request would be made, the customer has given express consent to the firm to make such a payment request; and
whether default fees and other charges may be added and, if so, the circumstances in which these may be incurred and the amount of such fees and charges or the basis on which they will be calculated.
[Note: paragraph 3.9miii of DCG]
an individual other than the borrower or the hirer (in this rule referred to as “the guarantor”) is to provide a guarantee or an indemnity (or both) in relation to the regulated credit agreement, the regulated consumer hire agreement or the P2P agreement; and
the guarantor is to grant a continuous payment authority.