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  1. Point in time
    2020-06-15

CONC 7.12 Lenders’ responsibilities in relation to debt

Application

CONC 7.12.1RRP

This section applies to a firm with respect to consumer credit lending.

Unfair business practices

CONC 7.12.2RRP

A firm must not:

  1. (1)

    refuse to deal with a not-for-profit debt advice body, debt counsellor, debt adjuster or with another person acting on behalf of a customer, unless there is an objectively justifiable reason for doing so;

    [Note: paragraphs 3.9c of DCG and 3.48 of DMG]

  2. (2)

    unless the credit agreement requires payments to be made to a third party, refuse to accept a payment tendered to the firm by the customer or by a person acting on behalf of the customer;

    [Note: paragraphs 3.8 of DCG and 3.49a of DMG]

  3. (3)

    refuse to deal with a customer who is developing a repayment plan, a third party who is assisting a customer to develop a repayment plan or a third party who is developing a debt management plan for the customer's debts, unless there is an objectively justifiable reason for doing so;

    [Note: paragraphs 3.9c of DCG and 3.49b of DMG]

  4. (4)

    where a person is acting on behalf of a customer, directly contact the customer without the customer's consent, unless there is an objectively justifiable reason for doing so;

    [Note: paragraph 3.9d of DCG]

  5. (5)

    operate a policy:

    1. (a)

      of only negotiating the freezing of interest and charges on a customer's debts where the lender has an existing arrangement with a person acting on behalf of the customer; or

      [Note: paragraph 3.49e of DMG]

    2. (b)

      of refusing to negotiate with certain third parties or with a customer developing their own repayment plan; or

      [Note: paragraph 3.49c (box) of DMG]

  6. (6)

    return or refuse a repayment or refuse to credit a repayment to a customer's account merely because the repayment is tendered by a debt management firm.

    [Note: paragraph 3.49a of DCG]

CONC 7.12.3GRP
  1. (1)

    CONC 1.2.2 R requires a firm to ensure its employees and agents comply with CONC and that it takes reasonable steps to ensure other persons who act on its behalf do so. This rule would apply where a debt collector acts as agent or on behalf of a lender.

  2. (2)

    Situations where it may be justified for a firm to refuse to deal with a person acting on behalf of a customer may include, for example, refusing to deal with that person where the firm is able to show that the person has failed to comply with consumer protection legislation or with FCA rules.

    [Note: paragraph 3.48 of DMG]

  3. (3)

    It may be justified for a firm to contact a customer directly where:

    1. (a)

      repeated unsuccessful efforts have been made to contact a person acting on behalf of the customer; or

      [Note: paragraphs 3.9d of DCG and 3.49c (box) of DMG]

    2. (b)

      the firm reasonably believes the person acting on behalf of the customer is acting against the best interests of the customer.

  4. (4)

    Situations where it would be justified for a firm to contact a customer directly include, for example:

    1. (a)

      sending a statutory notice, taking the reasonable steps required by CONC 7.9.7 R; or

    2. (b)

      where the sole purpose of the contact is to signpost the customer to not-for-profit debt advice bodies.

  5. (5)

    Where a firm is in dispute with a person acting on behalf of the customer it should make its position known to that person and to the customer as soon as practicable.

    [Note: paragraph 3.49d of DMG]

  6. (6)

    The FCA does not believe it is justified to bypass contacting a person acting on behalf of a customer merely because that person has not agreed to comply with the Insolvency Service’s Debt Management Protocol.