1This chapter applies, unless otherwise stated in or in relation to a rule, to:

1. (1)

   a firm with respect to consumer credit lending;

2. (2)

   a firm with respect to consumer hiring;

3. (3)

   a firm with respect to operating an electronic system in relation to lending, in relation to a borrower under a P2P agreement;

4. (4)

   a firm with respect to debt collecting.

1. (1)

   4To the extent that a rule in this chapter does not already apply to TP firms as a result of GEN 2.2.26R, it applies to them so far as the rule would have applied were it in effect before IP completion day.

2. (2)

   To the extent that a rule in this chapter does not already apply to Gibraltar-based firms as a result of GEN 2.3.1R, it applies to them so far as the rule would have applied were it in effect before IP completion day.

3In this chapter, the expression “regulated credit agreement” includes a credit agreement that is an exempt agreement by virtue of article 60C(4A) of the Regulated Activities Order except for the purposes of the following:

1. (1)

   CONC 7.5.1G;

2. (2)

   CONC 7.6; and

3. (3)

   CONC 7.7.4G.

1. (1)

   2In this chapter, except for CONC 7.6.15AG:

   1. (a)

      a reference to a borrower, a customer or a hirer includes a reference to an individual other than the borrower or the hirer (in this chapter, referred to as “the guarantor”) who has provided a guarantee or an indemnity (or both) in relation to:

      1. (i)

         a regulated credit agreement; or

      2. (ii)

         a regulated consumer hire agreement; or

      3. (iii)

         a P2P agreement in respect of which the borrower is an individual;

      where it would not do so but for this rule;

   2. (b)

      a reference (other than in this rule) to a credit agreement, a consumer hire agreement or a P2P agreement includes a reference to the document that includes the guarantee or the indemnity (or both);

   3. (c)

      a reference to a repayment includes a reference to a payment due under the guarantee or under the indemnity;

   4. (d)

      a reference to paying or repaying the debt includes a reference to making (in whole or in part) a payment due under the guarantee or under the indemnity; and

   5. (e)

      a reference to the adequate explanation required by CONC 4.6.2R includes a reference to the adequate explanation required by CONC 4.6.5R.

2. (2)

   For the purposes of this rule, a guarantee does not include a legal or equitable mortgage or a pledge.

3. (3)

   This rule does not apply to CONC 7.3.1G, CONC 7.4.1R, CONC 7.4.2R, CONC 7.5.1G, CONC 7.6.2AR, CONC 7.6.2BG, CONC 7.15.3G, CONC 7.15.4R, CONC 7.15.5G, or CONC 7.17 to CONC 7.19.

4. (4)

   3A reference in this chapter to a customer or borrower does not include the guarantor under a credit agreement that is an exempt agreement by virtue of article 60C(4A) of the Regulated Activities Order.

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

1. (1)

   dealing with customers who are in or approaching arrears or in default;1

   [Note: paragraph 7.2 of ILG]

2. (2)

   the fair and appropriate treatment of customers, who the firm understands or reasonably suspects to be 1vulnerable.

   [Note: paragraphs 7.2 and 7.2(box) of ILG and 2.2 (box) of DCG]

1A firm must ensure that the effectiveness of any policies and procedures put in place further to CONC 7.2.1R, and the firm’s compliance with them, is reviewed at appropriate intervals.

A firm must treat customers in or approaching arrears or in default12 with forbearance and due consideration.

[Note: paragraphs 7.3 and 7.4 of ILG and 2.2 of DCG]

12When determining appropriate forbearance and treating the customer with due consideration, a firm must take into account the individual circumstances of the customer of which the firm is or should be aware.

12A firm must take all reasonable steps to ensure that any repayment arrangements agreed with customers (see CONC 7.3.5G(4)) are sustainable.

12Where a firm assesses income and expenditure, it must do so in an objective manner.

1. (1)

   12This rule applies where:

   1. (a)

      a firm has put in place a repayment arrangement as a forbearance measure; and

   2. (b)

      the customer is meeting the terms of that arrangement.

2. (2)

   The firm must reduce, waive or cancel any further interest or charges to the extent necessary to ensure that the level of debt under the arrangement does not rise for the period of that arrangement.

12A firm must take reasonable steps to ensure that any forbearance or due consideration provided remains appropriate.

A firm must not operate a policy of refusing to negotiate with a customer who is developing a repayment plan.

[Note: paragraph 3.9d (box) of DCG]

A firm must not pressurise a customer:

1. (1)

   to pay a debt in one single or very few repayments or in unreasonably large amounts, when to do so would have an adverse impact on the customer's financial circumstances;

   [Note: paragraph 7.18 of ILG]

2. (2)

   to pay a debt within an unreasonably short period of time; or

   [Note: paragraphs 3.7i of DCG and 7.18 of ILG]

3. (3)

   to raise funds to repay the debt by selling their property, borrowing money or increasing existing borrowing.

   [Note: paragraph 3.7b of DCG]

A firm must suspend the active pursuit of recovery of a debt from a customer for a reasonable period where the customer informs the firm that a debt counsellor or another person acting on the customer's behalf or the customer is developing a repayment plan.

[Note: paragraphs 7.12 of ILG and 3.7m of DCG]

1. (1)

   A firm must not take disproportionate action against a customer in arrears or default.

   [Note: paragraphs 7.14 (box) of ILG and 3.7t of DCG]

2. (2)

   In accordance with (1) a firm must not, in particular, apply to court for an order for sale or submit a bankruptcy petition, without first having fully explored any more proportionate options.

   [Note: paragraph 7.14 (box) of ILG]

A firm must not take steps to repossess a customer's home, goods or vehicles12 other than as a last resort, having explored all other possible options.

[Note: paragraphs 7.14 of ILG and 3.7t of DCG]2

12A firm must not commence or continue repossession action where a forbearance arrangement is in place for as long as the customer is meeting the terms of that arrangement.

A firm must not threaten to commence court action, including an application for a charging order or (in Scotland) an inhibition or an order for sale, in order to pressurise a customer in or approaching arrears or in default12 to pay more than they can reasonably afford.

[Note: paragraphs 7.14 of ILG and 3.7i (box) of DCG]

A firm must provide the customer or another person acting on behalf of the customer with information on the amount of any arrears and the balance owing.

[Note: paragraph 3.3f of DCG]

Where:

1. (1)

   a customer offers a settlement payment lower than the total amount owing; or

2. (2)

   a lender under a regulated credit agreement or an owner under a regulated consumer hire agreement decides to stop pursuing a customer in respect of a debt arising under the agreement;

and the debt (or part of it) continues to exist notwithstanding the acceptance of the customer's offer or the decision to cease to pursue the debt, the lender or owner must ensure that the continuing existence of the debt and the possibility of the customer being pursued by another firm who purchases the debt is explained in clear terms to the customer.

[Note: paragraph 3.3i of DCG]

A firm must not pursue an individual whom the firm knows or believes might not be the borrower or hirer under a credit agreement or a consumer hire agreement.

[Note: paragraph 3.5f of DCG]

A firm must not ignore or disregard a customer's claim that a debt has been settled or is disputed and must not continue to make demands for payment without providing clear justification and/or evidence as to why the customer's claim is not valid.

[Note: paragraph 3.7o of DCG]

A firm acting on behalf of a lender or owner must, unless the firm has authority from the lender or owner to accept such an offer, refer a reasonable offer by the customer to pay by instalments to the lender or owner.

[Note: paragraph 3.9f of DCG]

A firm acting on behalf of a lender or owner must pass on payments received from a customer and/or details of a customer's outstanding balance to the lender or owner in a timely manner or, provided the effect of the agreement does not impact adversely on the customer, in accordance with an agreement between the firm and lender or owner in question

[Note: paragraph 3.9g of DCG]

1. (1)

   A firm must not exercise its rights under a continuous payment authority (or purport to do so):

   1. (a)

      unless it has been explained to the customer that the continuous payment authority would be used in the way in question; and

   2. (b)

      other than in accordance with the terms specified in the credit agreement or the P2P agreement.

2. (2)

   If a firm wishes a customer to change the terms of a continuous payment authority it must contact the customer and:

   1. (a)

      provide the customer with an adequate explanation of the reason for and effect of the proposed change, including any effect it would have on the matters in CONC 4.6.2R (2); and

   2. (b)

      once it has done so, obtain the consent of the customer.

[Note: paragraph 3.9mi of DCG]

1. (1)

   2This rule applies where the terms of a regulated credit agreement or a P2P agreement do not provide for a continuous payment authority and it is proposed that a customer will grant a continuous payment authority to:

   1. (a)

      a lender or a person who has permission to carry on the activity of operating an electronic system in relation to lending; or

   2. (b)

      a debt collector¸ provided that the debt collector is acting under an arrangement with the lender or the person who has permission to carry on the activity of operating an electronic system in relation to lending, the effect of which is that a payment by the customer to the debt collector amounts to a discharge or reduction of the debt due to the lender.

2. (2)

   The firm which proposes the continuous payment authority to the customer must, before the customer grants the continuous payment authority:

   1. (a)

      explain why a continuous payment authority is proposed;

   2. (b)

      provide the customer with an adequate explanation of the matters in CONC 4.6.2R(2);

   3. (c)

      give the customer information, on paper or in another durable medium, setting out, in plain and intelligible language, the terms of the continuous payment authority and how it will operate; and

   4. (d)

      give the customer a reasonable opportunity to consider the explanations required by (a) and (b) and the information required by (c).

3. (3)

   A firm must not propose that a customer should grant a continuous payment authority, and must not exercise rights under such an authority, in respect of repayments under a regulated credit agreement or a P2P agreement, the terms of which do not already provide for a continuous payment authority, unless:

   1. (a)

      the customer is in or approaching arrears or in3 default in respect of the agreement; and

   2. (b)

      a lender or a person who has permission to carry on the activity of operating an electronic system in relation to lending, or a debt collector acting under an arrangement with the lender or the person, is exercising forbearance in respect of the customer in relation to the agreement.

A firm must exercise its rights under a continuous payment authority in a manner which is reasonable, proportionate and not excessive and must exercise appropriate forbearance if it becomes aware that the customer is or may be experiencing financial difficulties.

[Note: paragraph 3.9mii of DCG]

A firm must not exercise its rights under a continuous payment authority:

1. (1)

   if the customer provides reasonable evidence to the firm of being in financial difficulties and the customer cannot afford to repay the debt; or

2. (2)

   where the firm otherwise becomes aware of the customer being in financial difficulties and that the customer cannot afford to repay the debt.

   [Note: paragraph 3.9mii (box) of DCG]

1. (1)

   Subject to (3) to (5), a firm must not request a payment service provider to make a payment, under a continuous payment authority, to collect (in whole or in part) a sum due for high-cost short-term credit if it has done so in connection with the same agreement for high-cost short-term credit on two previous occasions and those previous payment requests have been refused.

2. (2)

   For the purposes of (1) and (3):

   1. (a)

      if high-cost short-term credit has been refinanced, except in exercise of forbearance, the agreement is to be regarded as the same agreement; and

   2. (b)

      “refinance” and “exercise forbearance” have the same meaning as in CONC 6.7.17 R.

3. (3)

   Where a firm exercises forbearance:

   1. (a)

      paragraph (1) applies or continues to apply to the agreement; but

   2. (b)

      any refusal of a payment request that took place before the time at which the forbearance was granted is to be disregarded for the purposes of (1).1

4. (4)

   Paragraph (5) applies following the refusal of two payment requests a firm has made to a payment service provider under a continuous payment authority to collect a sum due for high-cost short-term credit, where the firm proposes to refinance the high-cost short term credit in question in accordance with CONC 6.7.17 R to CONC 6.7.23 R.

5. (5)

   If the firm contacts the customer and, in the course of an dialogue between the firm and the customer:

   1. (a)

      the firm notifies the customer of the refusal of the payment requests;

   2. (b)

      the firm reminds the customer of the matters in CONC 4.6.2R (2), taking account of any proposed changes to the terms of the continuous payment authority that will apply following the refinance if the customer consents; and

   3. (c)

      the customer gives express consent to the firm further exercising its rights under the continuous payment authority following the refinance;

   the firm may then make further payment requests under the continuous payment authority following the refinance in accordance with CONC 7.6, and paragraph (1) applies as if the firm had not made a payment request under the continuous payment authority before the refinance.

6. (6)

   This rule does not apply to an agreement which provides for repayment in instalments.

   [Note: Until the end of 30 June 2014, transitional provisions apply to CONC 7.6.12 R: see CONC TP 3.4]

1. (1)

   Where:

   1. (a)

      high-cost short-term credit provides for repayment in instalments; and

   2. (b)

      a firm has on two previous occasions made a payment request, under a continuous payment authority, to collect (in whole or in part) the same instalment due under the agreement, which have been refused;

   subject to (3) and (4), the firm must not make a further payment request under the continuous payment authority to collect that instalment.

2. (2)

   The firm must not make a further payment request under the continuous payment authority to collect any other instalment that is or becomes due under the agreement, unless any request is in accordance with CONC 7.6 and in the course of a dialogue between the firm and the customer:

   1. (a)

      the firm notifies the customer of the refusal of the payment requests;

   2. (b)

      repayment of the instalment referred to in (1)(b) has been made using a method other than a continuous payment authority and the customer is not in arrears; and

   3. (c)

      where (a) and (b) apply, the firm has reminded the customer of the date and amount of the next instalment.

3. (3)

   If, where the prohibition in (1) applies, a firm exercises forbearance within the meaning of CONC 6.7.17 R the firm must not make a further payment request under the continuous payment authority to collect the instalment referred to in (1) or a payment request for any other instalment that is or becomes due under the agreement, unless:

   1. (a)

      a payment request is in accordance with CONC 7.6;

   2. (b)

      the firm notifies the customer of the refusal of the payment requests; and

   3. (c)

      in the course of a dialogue between the firm and the customer, the firm reminds the customer of the date and amount of the next instalment and following which the customer gives express consent to further payment requests being made under the continuous payment authority.

4. (4)

   If, where the prohibition in (1) applies, a firm adds no charge or additional interest in connection with missing a payment on the due date, the firm must not make a further payment request under the continuous payment authority to collect the instalment referred to in (1) or a payment request for any other instalment that is or becomes due under the agreement, unless:

   1. (a)

      a payment request is in accordance with CONC 7.6;

   2. (b)

      the customer has missed making a payment on the due date; and

   3. (c)

      in the course of a dialogue between the firm and the customer, the firm reminds the customer of the date and amount of the next instalment and following which the customer gives express consent to further payment requests being made under the continuous payment authority.

   [Note: Until the end of 30 June 2014, transitional provisions apply to CONC 7.6.13 R: see CONC TP 3.5]

1. (1)

   Subject to (2), a firm must not request a payment service provider to make a payment under a continuous payment authority to collect a sum due for high-cost short-term credit if that sum is less than the full sum due at the time the request is made.

2. (2)

   Where a firm:

   1. (a)

      following contact with a customer, refinances the agreement in accordance with CONC 6.7.17 R to CONC 6.7.23 R by granting an indulgence which allows for one or more repayment of a reduced amount under a repayment plan;

   2. (b)

      notifies the customer of the number and frequency of repayments and their amount under the repayment plan; and

   3. (c)

      the customer gives express consent to the firm to make payment requests to collect the repayments notified under the plan;

      [Note: Until the end of 30 June 2014, transitional provisions apply to CONC 7.6.14 R: see CONC TP 3.6]

   paragraph (1) does not prevent the firm from making a payment request in accordance with CONC 7.6 under a continuous payment authority to collect repayments of those amounts in accordance with the plan.

A firm must not by any means improperly or unfairly inhibit or discourage a customer from cancelling a continuous payment authority including by:

1. (1)

   misleading the customer, expressly or by omission, regarding the right to cancel and how it may be exercised; or

2. (2)

   failing to respond promptly to requests by or on behalf of the customer to amend or cancel the continuous payment authority; or

3. (3)

   intimidating a customer who wishes to cancel the continuous payment authority; or

4. (4)

   requiring customers who wish to cancel the continuous payment authority to go through an unduly complicated process.

   [Note: paragraph 3.9miv of DCG]

A firm must cease to exercise its rights under the continuous payment authority once it is notified that the continuous payment authority has been cancelled.

[Note: paragraph 3.9miv of DCG]

A firm must not claim the costs of recovering a debt from a customer if it has no contractual right to claim such costs.

[Note: paragraph 3.11b of DCG]

A firm must not cause a customer to believe that the customer is legally liable to pay the costs of recovery where no such obligation exists.

[Note: paragraph 3.11a of DCG]

A firm must not impose charges on customers in default or arrears difficulties unless the charges are no higher than necessary to cover the reasonable costs of the firm.

[Note: paragraphs 3.11 of DCG and 7.15 of ILG]

A firm dealing with a customer who is resident in a different jurisdiction to the jurisdiction of the firm's place of business must ensure that it takes appropriate account of any differences in law and court procedure that may have a significant impact on the customer's rights.

[Note: paragraph 2.3 of DCG]

A firm must not commence proceedings or threaten to commence proceedings in the wrong jurisdiction.

[Note: paragraph 3.5g of DCG]

A firm must ensure that a person contacting a customer on its behalf explains to the customer the following matters:

1. (1)

   who the person contacting the customer works for;

2. (2)

   the person's role in or relationship with the firm; and

3. (3)

   the purpose of the contact.

   [Note: paragraph 3.3c of DCG]

A firm must not in a communication with the customer make a statement which may induce the customer to contact the firm misunderstanding the reason for making contact.

[Note: paragraph 3.3d of DCG]

A firm must not contact customers at unreasonable times and must pay due regard to the reasonable requests of customers (for example, customers who work in a shift pattern) in respect of when, where and how they may be contacted.

[Note: paragraphs 3.3j and k of DCG]

A firm must not require a customer to make contact on a premium rate or other special rate telephone number the charge for which is higher than to a standard geographic telephone number.

[Note: paragraph 3.3l of DCG]

A firm must not unfairly disclose or threaten to disclose information relating to the customer's debt to a third party.

[Note: paragraph 3.7p of DCG]

When contacting a customer:

1. (1)

   a firm must ensure that it does not act in a way likely to be publicly embarrassing to the customer; and

2. (2)

   a firm must take reasonable steps to ensure that third parties do not become aware that the customer is being pursued in respect of a debt

   [Note: paragraph 3.7q of DCG].

A firm must not disclose details of a debt to an individual without first establishing, by suitably appropriate means, that the individual is (or acts on behalf of) the borrower or hirer under the relevant agreement).

[Note: paragraph 3.9b of DCG]

Unless it is not practicable to do so, a2firm must ensure that a person visiting a customer on its behalf:

1. (1)

   clearly explains to the customer the purpose and intended outcome of the proposed visit; and

   [Note: paragraph 3.12 of DCG]

2. (2)

   gives the customer adequate notice of the date and likely time (at a reasonable time of day) of the visit.

   [Note: paragraph 3.13g of DCG]

A firm must ensure that all persons visiting a customer's property on its behalf act at all times in accordance with the requirements of CONC 7 and do not:

1. (1)

   act in a threatening manner towards a customer;

2. (2)

   visit a customer at a time when they know or suspect that the customer is, or may be, particularly vulnerable;

3. (3)

   visit at an inappropriate location unless the customer has expressly consented to the visit;

4. (4)

   enter a customer's property without the customer's consent or an appropriate court order;

5. (5)

   refuse to leave a customer's property when it becomes apparent that the customer is unduly distressed or might not have the mental capacity to make an informed repayment decision or to engage in the debt recovery process;

6. (6)

   refuse to leave a customer's property when reasonably asked to do so;

7. (7)

   visit or threaten to visit a customer without the customer's prior agreement when a debt is deadlocked or reasonably queried or disputed (see CONC 7.14 (Settlements, disputed and deadlocked debt)).

   [Note: paragraphs 3.12 and 3.13 of DCG]

A firm must suspend the pursuit of recovery of a debt from a customer when:

1. (1)

   the firm has been notified that the customer might not have the mental capacity to make relevant financial decisions about the management of the customer's debt and/or to engage in the debt recovery process at the time; or

2. (2)

   the firm understands or ought reasonably to be aware that the customer lacks mental capacity to make relevant financial decisions about the management of the customer's debt and/or to engage in the debt recovery process at the time.

[Note: paragraphs 3.7r of DCG and 7.13 of ILG]

When contacting customers, a firm must not misrepresent its authority or its legal position with regards to the debt or debt recovery process.

[Note: paragraph 3.4 of DCG ]

A firm must not use official looking documents which are designed to, or are likely to, mislead a customer as to the status of the firm.

[Note: paragraph 3.3a of DCG ]

A firm must not falsely suggest or state that it is a member of a trade body or is accredited by a trade body.

[Note: paragraph 3.5c (box) of DCG ]

A firm must1 not suggest or state that action can or will be taken when legally it cannot be taken.

[Note: paragraph 3.5b of DCG]

A firm must1 not suggest or state that it will commence proceedings for a warrant of execution or an attachment of earnings order when a court judgment has not been obtained, or that it will take any other enforcement action before it is possible to know whether such action will be permissible.

[Note: paragraph 3.5c of DCG]

A firm must1 not suggest or state that an action has been taken when no such action has been taken.

[Note: paragraph 3.5d (box) of DCG]

This section applies to a firm with respect to consumer credit lending or in respect to activity that would be consumer credit lending but for article 60C(4A) of the Regulated Activities Order1.

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]

A firm must take reasonable steps to ensure that it maintains accurate and adequate data (including in respect of debt and repayment history) so as to avoid the risk that:

1. (1)

   an individual who is not the true borrower or hirer is pursued for the repayment of a debt; and

2. (2)

   the borrower or hirer is pursued for an incorrect amount.

   [Note: paragraphs 3.19 of DCG and 7.11 (box) of ILG]

A firm must endeavour to ensure that the information it passes on to its agent or to a debt collector or to a tracing agent (a person1 that carries on the activity in article 54 of the Exemption Order), whether for the firm's or another person’s1 business, or to any other person involved in recovering the debt or, where appropriate, to a credit reference agency is accurate and adequate so as to facilitate the tracing and identification of the true borrower or hirer.

[Note: paragraphs 3.20 of DCG and 7.11 (box) ILG]

Before pursuing a customer for the repayment of a debt, a firm must take reasonable steps to verify the accuracy and adequacy of the available data so as to ensure that the true customer is pursued for the debt and that they are pursued for the correct amount.

[Note: paragraphs 3.7e and 3.23a of DCG]

Where a firm has established that an individual being pursued for a debt is not the true borrower or hirer under the credit agreement, regulated credit agreement, consumer hire agreement or regulated consumer hire agreement or that the debt has been paid, the firm must update its records and the data supplied to the credit reference agencies (where applicable).

[Note: paragraph 3.23f of DCG]

A firm must ensure that a third party engaged by it, where required, has the appropriate Part 4A permission to engage in the regulated activities undertaken in the course of the third party’s business.

[Note: paragraph 2.6 of DCG]

1. (1)

   A firm must suspend any steps it takes or its agent takes in the recovery of a debt from a customer where the customer disputes the debt on valid grounds or what may be valid grounds.

   [Note: paragraph 3.9k of DCG]

2. (2)

   Paragraph (1) does not apply where a customer under a green deal consumer credit agreement (within the meaning of section 189B of the CCA) alleges that the disclosure and acknowledgement provisions in Part 7 of the Green Deal Framework (Disclosure, Acknowledgement, Redress etc) Regulations 2012 (SI 2012/2079) have been breached, but the lender reasonably believes this not to be the case.

Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner.

[Note: paragraph 3.9i of DCG]

Where there is a dispute as to the identity of the borrower or hirer or as to the amount of the debt, it is for the firm (and not the customer) to establish, as the case may be, that the customer is the correct person in relation to the debt or that the amount is the correct amount owed under the agreement.

[Note: paragraphs 3.9j of DCG and 7.11 (box) of ILG]

A firm must provide a customer with information on the outcome of its investigations into a debt which the customer disputed on valid grounds.

[Note: paragraph 3.3g of DCG]

Where a customer disputes a debt and the firm seeking to recover the debt is not the lender or the owner, the firm must:

1. (1)

   pass the information provided by the customer to the lender or the owner; or

   [Note: paragraph 3.23h of DCG]

2. (2)

   if the firm has authority from the lender or owner to investigate a dispute, it must notify the lender or owner of the outcome of the investigation.

A firm must give due consideration to a reasonable offer of repayment made by the customer or the customer's representative.

[Note: annex A5 of DCG]

Where a firm rejects a proposal for repayment from a customer in default or in arrears difficulties or from the customer's representative, the firm's response must include a clear explanation of the reason for the rejection.

[Note: paragraph 7.16 (box) of ILG]

If a firm rejects a repayment offer because it is unacceptable, the firm must not engage in any conduct intended to, or likely to, have the effect of intimidating the customer1 into increasing the offer.

[Note: annex A5 of DCG]

If a firm accepts a customer's offer to settle a debt, it must communicate formally and unequivocally that the offer accompanied by the relevant payment has been accepted as settlement of the customer's liability.

[Note: paragraph 3.3h of DCG]

Notwithstanding that a debt may be recoverable, a firm must not attempt to recover a statute barred debt in England, Wales or Northern Ireland if the lender or owner has not been in contact with the customer during the limitation period.

[Note: paragraph 3.15b of DCG]

A firm must endeavour to ensure that it does not mislead a customer as to the customer's rights and obligations.

[Note: paragraph 3.15b of DCG]

A firm must not continue to demand payment from a customer after the customer has stated that he will not be paying the debt because it is statute barred.

[Note: paragraph 3.15b of DCG]

A firm must identify for prospective purchasers of debts arising under credit agreements or consumer hire agreements or P2P agreements those debts which it knows or ought reasonably to know are statute barred, so as to avoid a firm taking inappropriate action against customers in relation to such debts.

[Note: paragraph 3.23c of DCG]

A lender must not initiate legal proceedings in relation to a regulated credit agreement where the lender is aware that the customer has submitted a valid complaint or what appears to the firm may be a valid complaint relating to the agreement in question that is being considered by the Financial Ombudsman Service.

[Note: paragraph 7.9 (box) of ILG]

A firm must not pass on a customer's details to third parties, including lead generators, debt management firms, lenders, owners, debt collectors or credit brokers, unless it is appropriate to do so.

[Note: paragraph 3.9e of DCG]

This section applies to a firm with respect to operating an electronic system in relation to lending in relation to a borrower under a P2P agreement for fixed-sum credit.

1. (1)

   Subject to (2), this section does not apply where the P2P agreement provides for credit of less than £50.

2. (2)

   Paragraph (1) does not apply where two or more P2P agreements in relation to the same borrower (whether or not with the same lender) are entered into at or about the same time.

3. (3)

   Where (2) applies, the firm's obligations in CONC 7.17 apply as if all of the P2P agreements made with a borrower at or about the same time were a single agreement.

A firm must comply with this section where the following conditions are satisfied:

1. (1)

   a borrower is required to have made at least two payments under the agreement before that time;

2. (2)

   the total sum paid under the agreement by the borrower is less than the total sum required to have been paid before that time;

3. (3)

   the amount of the shortfall is no less than the sum of the last two payments which the borrower is required to have made before that time;

4. (4)

   the firm is not already under a duty to give the borrower notices under CONC 7.17.4 R in relation to the agreement;

5. (5)

   the lender is not already under a duty to give the borrower notice under section 86B of the CCA; and

6. (6)

   if a judgment has been given in relation to the agreement before that time, there is no sum still to be paid under the judgment by the borrower.

1. (1)

   The firm must, within the period of 14 days beginning with the day on which the conditions in CONC 7.17.3 R are satisfied, give the borrower a notice including the information set out in CONC 7.17.7 R and CONC 7.17.8 R.

2. (2)

   After giving that notice, the firm must give the borrower further notices including the information in CONC 7.17.7 R and CONC 7.17.8 R at intervals of not more than six months.

1. (1)

   The duty of the firm to give the borrower notices under CONC 7.17.4 R will cease when either of the conditions mentioned in (2) is satisfied but, if either of those conditions is satisfied before the notice required by CONC 7.17.4R (1) is given, the duty will not cease until that notice is given.

2. (2)

   The conditions referred to in (1) are:

   1. (a)

      that the borrower ceases to be in arrears;

   2. (b)

      that a judgment is given in relation to the agreement under which a sum is required to be paid by the borrower.

3. (3)

   For the purposes of (2)(a) the borrower ceases to be in arrears when:

   1. (a)

      no payments, which the borrower has ever failed to make under the agreement when required, are still owing;

   2. (b)

      no default sum, which has ever become payable under the agreement in connection with the borrower's failure to pay any sum under the agreement when required, is still owing;

   3. (c)

      no sum of interest, which has ever become payable under the agreement in connection with such a default sum, is still owing; and

   4. (d)

      no other sum of interest, which has ever become payable under the agreement in connection with the borrower's failure to pay any sum under the agreement when required, is still owing.

4. (4)

   A firm must accompany the notice required by CONC 7.17.4 R with a copy of the current arrears information sheet under section 86A of the CCA with the following modifications:

   1. (-a)

      [deleted]2

      1
   2. (a)

      for the numbered 2 point headed “Work out how much money you owe” substitute:

      “Work out how much money you owe. To do this, you will need to make a list of all those you owe money to. A debt adviser can help you.”;

   3. (b)

      for the numbered 2 point headed “Contact the organisations you owe money to” substitute:

      “Contact the peer-to-peer (P2P) platform which arranged your loan. Let them know you are having problems. They may be able to discuss options for paying back what you owe.”;

   4. (ba)

      2For the bullet point headed “If you live in England and Wales, you may be entitled to ‘breathing space’” substitute:

      “You may be entitled to ‘breathing space’ – a defined period where you have protections from legal action taken against you. Speak to a debt adviser who can set out your options.”;

   5. (c)

      For the paragraph headed “Doing nothing could make things worse.” substitute:

      “Doing nothing could make things worse.

      You could end up paying more in interest and charges. Missed payments could affect your credit rating and make it more difficult to get credit in future. If you continue not to make payment this could lead to legal action against you for repayment or the return of goods on hire purchase.”.

5. (5)

   The firm must not charge the borrower a fee in connection with preparation of or the giving of the notice required by CONC 7.18.4 R.

In this section “payments” means payments to be made at predetermined intervals provided for under the terms of the agreement.

The notice required by CONC 7.17.4 R must contain the following information:

1. (1)

   a form of wording to the effect that the notice is given in compliance with the rules because the borrower is behind with the sums payable under the agreement;

2. (2)

   a form of wording encouraging the borrower to discuss the state of his account with the firm;

3. (3)

   the date of the notice;

4. (4)
   1. (a)

      the name, telephone number or numbers, the postal address, and, where appropriate, any other address of the firm; or

   2. (b)

      where the firm and the borrower have entered into an arrangement under which the borrower has been given details of a particular employee or category of employee of the firm whom the borrower is entitled to contact for all the borrower's dealings with the firm, the firm may, instead of including the telephone number or numbers in (a), refer to that arrangement;

5. (5)

   a description sufficient to identify any agreements and the opening balance under any agreements at the date on which the duty to give the notice arose;

6. (6)
   1. (a)

      where default sums or interest (other than any set out in the notice) may be payable in connection with the amounts set out in the notice, a statement in the following form:

      "Default sums and interest

      You may have to pay default sums and interest in relation to the missed or partly made payments referred to in this notice. Please contact us if you would like further details. This notice does not take account of any payments received after the date of the notice."; or

   2. (b)

      in any other case, a statement in the following form:

      "Default sums and interest

      You will not incur any default sums or extra interest in relation to the missed or partly made payments referred to in this notice. This notice does not take account of any payments received after the date of the notice.";

7. (7)

   a statement in the following form:

   "Notices

   For so long as you continue to be behind with your payments by any amount, you will be sent notices about this at least every six months. We are not required to send you notices more frequently than this, even if you get further behind with your payments in between notices."; and

8. (8)

   a statement in the following form:

   "Financial Conduct Authority Information Sheet

   This notice should include a copy of the current arrears information sheet prepared by the Financial Conduct Authority. This contains important information about your rights and where to go for support and advice, for example to think carefully before borrowing money to repay debts as well as our right to charge you interest. If it is not included you should contact us to get one. Please refer to the Financial Conduct Authority information sheet for more information about how to get advice on dealing with your debt.".

Where the notice is given under CONC 7.17.4R (1) the notice must also state the amount of the shortfall under the agreement which gave rise to the duty to give the notice and the firm must:

1. (1)

   within 15 working days of receiving the borrower's request for further information about the shortfall which gave rise to the duty to give the notice, give the borrower in relation to each of the sums which comprise the shortfall, notice of:

   1. (a)

      the amount of the sums due which comprise the shortfall;

   2. (b)

      the date on which the sums became due; and

   3. (c)

      the amounts the borrower has paid in respect of the sums due and the dates of those payments;

2. (2)

   except where the original notice contained all the information specified in (1), include a statement in the following form

   "If you want more information about which payments you failed to make please get in touch with us. We are required to give you this information within fifteen working days of receiving your request for it."; and

3. (3)

   where the firm and the borrower have entered into an agreement to aggregate, the references to sums due and to amounts paid in (1) may be construed as a reference to the aggregated sums due to the firm (on behalf of the lender) and the aggregated amounts paid by the borrower in accordance with the terms of that agreement.

Where the notice is given under CONC 7.17.4R (2) the notice must also contain the following information:

1. (1)

   that part of the opening balance referred to in CONC 7.17.7R (5) which comprises any sum which the borrower has failed to pay in full when it became due under the agreement, whether or not such sums have been included in a previous notice;

2. (2)

   the amount and date of any sums paid into the account by, or to the credit of, the borrower during the period to which the notice relates;

3. (3)

   the amount and date of any interest or other charges payable by the borrower which became due during the period to which the notice relates, whether or not the interest or other charges relate only to that period. But where the rate or rates of interest provided for under the agreement are not applicable on a per annum basis, this sub-paragraph does not require amounts and dates of interest which became due during the period to which the notice relates to be set out separately in the notice;

4. (4)

   the amount and date of any movement in the account during the period to which the notice relates which is not required to be included in the notice under (2) and (3);

5. (5)

   the balance under the agreement at the end of the period to which the notice relates;

6. (6)

   that part of the balance referred to in (5) which comprises any sum which the borrower has failed to pay in full when it became due under the agreement and which remains unpaid at the end of the period to which the notice relates, whether or not such a sum has been included in a previous notice; and

7. (7)

   add the following words to the end of the first sentence of the statement in CONC 7.17.7R (6)(a): "(in addition to any default sums and interest included in this notice)."

Where the notice includes a form of wording to the effect that it is not a demand for immediate payment, the firm must include wording explaining why it is not such a demand.

The reference to the account in CONC 7.17.9R (2) and CONC 7.17.9R (4) are to be construed as a reference to all accounts maintained by the firm (on behalf of a lender) which relate to the agreement with the borrower.

This section applies to a firm with respect to operating an electronic system in relation to lending in relation to a borrower under a P2P agreement for running account credit.

A firm must comply with this section where the following conditions are satisfied:

1. (1)

   a borrower is required to have made at least two repayments under the agreement;

2. (2)

   the last two repayments which the borrower is required to have made before that time have not been made;

3. (3)

   the firm has not already been required to give a notice under CONC 7.18.3 R in relation to the agreement;

4. (4)

   the lender is not already under a duty to give the borrower notice under section 86C of the CCA; and

5. (5)

   if a judgment has been given in relation to the agreement before that time, that there is no sum still to be paid under the judgment by the borrower.

1. (1)

   The firm must, when the firm next sends a statement to the borrower, give or send the borrower a notice including the information set out in CONC 7.18.5 R.

2. (2)

   A firm must accompany the notice required by (1) with a copy of the current arrears information sheet under section 86A of the CCA with the following modifications:

   1. (-a)

      for the heading “Arrears” substitute “Arrears – peer-to-peer lending”;1

   2. (a)

      for the bullet point headed “Work out how much money you owe” substitute:

      “Work out how much money you owe. To do this, you will need to make a list of all those you owe money to. A debt adviser can help you.”

   3. (b)

      for the bullet point headed “Contact the organisations you owe money to” substitute:

      “Contact the peer-to-peer (P2P) platform which arranged your loan. Let them know you are having problems. They may be able to discuss options for paying back what you owe.”

   4. (c)

      For the paragraph headed “Doing nothing could make things worse.” substitute:

      “Doing nothing could make things worse.

      You could end up paying more in interest and charges. Missed payments could affect your credit rating and make it more difficult to get credit in future. If you continue not to make payment this could lead to legal action against you for repayment or the return of goods on hire purchase.”.

3. (3)

   The firm must not charge the borrower a fee in connection with the preparation of or the giving of the notice required by (1).

4. (4)

   The notice required by (1) may be incorporated in a statement or other notice which the firm gives to the borrower in relation to the agreement by virtue of FCArules or the CCA.

In this section “payments” means payments to be made at predetermined intervals provided for under the terms of the agreement.

The notice referred to in CONC 7.18.3 R must contain the following information:

1. (1)

   a form of wording to the effect that it is given in compliance with the rules because the borrower is behind with his payments under the agreement;

2. (2)

   a form of wording encouraging the borrower to discuss the state of his account with the firm;

3. (3)

   the date of the notice;

4. (4)

   a description of the agreement sufficient to identify it;

5. (5)
   1. (a)

      the name, telephone number, postal address and, where appropriate, any other address of the firm; or

   2. (b)

      where the firm and the borrower have entered into an arrangement under which the firm has given the borrower details of a particular employee or category of employee of the firm whom the borrower is entitled to contact for all his dealings with the firm, the firm may, instead of including the telephone number or numbers referred to in (a), refer to that arrangement;

6. (6)

   in relation to each of the last two payments which the borrower is required under the agreement to have made and which have not been paid or not fully paid:

   1. (a)

      the amount payable;

   2. (b)

      the date on which that amount became due;

   3. (c)

      in the event that the borrower has paid part of that amount, the amount the borrower has paid and the date on which that payment was made;

   4. (d)

      the nature of the amount due; and

   5. (e)

      the aggregate of the amounts payable as shown under (a), less the aggregate of the amounts paid as shown under (c);

7. (7)

   a statement in the following form:

   "Missed and partly made payments

   This notice does not give details of missed or partly made payments previously notified whether or not they remain unpaid."

8. (8)
   1. (a)

      where default sums or interest (other than any set out in the notice) may be payable in connection with the amounts set out in the notice, a statement in the following form:

      "Default sums and Interest

      You may have to pay default sums and interest in relation to the missed or partly made payments indicated above in addition to any default sums and interest already included in this notice. Please contact us if you would like further details. This notice does not take account of any payments received after the date of the notice."; or

   2. (b)

      in any other case, a statement in the following form:

      "Default sums and Interest

      You will not incur any default sums or extra interest in relation to the missed or partly made payments indicated above. This notice does not take account of any payments received after the date of the notice."; and

9. (9)

   a statement in the following form:

   "Financial Conduct Authority Information Sheet

   This notice should include a copy of the current arrears information sheet issued by the Financial Conduct Authority. This contains important information about your rights and where to go for support and advice, for example, to think carefully before borrowing money to repay debts, as well as our right to charge you interest. If it is not included you should contact us to get one. Please refer to the Financial Conduct Authority information sheet for more information about how to get advice on dealing with your debt."

Where the notice includes a form of wording to the effect that it is not a demand for immediate payment, the firm must include wording explaining why it is not such a demand.

1. (1)

   Subject to (2), where the total amount which the borrower has failed to pay in relation to the last two payments due under the agreement prior to the date on which the firm came under a duty to give the borrower a notice under CONC 7.18.3 R is not more than £2, the notice:

   1. (a)

      need not include any of the information or statements referred to in CONC 7.18.4 R;

   2. (b)

      but, in that event, shall contain a statement in the following form:

      "You have failed to make two minimum payments

      Failing to make minimum payments can mean that you have broken the terms of this credit agreement. This could result in your having to pay additional costs. A copy of the Financial Conduct Authority Arrears information sheet is enclosed, which contains more information about what to do when you get behind with your payments.";

2. (2)

   Paragraph (1) does not apply where at the date on which the duty to give notice arose a default sum or other charge has become payable as a result of the borrower's failure to pay sums as set out in (1).

This section applies to a firm with respect to operating an electronic system in relation to lending in relation to a borrower under a P2P agreement.

1. (1)

   Subject to (2), this section does not apply where the P2P agreement provides for credit of less than £50.

2. (2)

   Paragraph (1) does not apply where two or more P2P agreements in relation to the same borrower (but whether or not with the same lender) are entered into at or about the same time.

3. (3)

   Where (2) applies, the firm's obligation in CONC 7.19.4 R applies as if all of the P2P agreements made with a borrower at or about the same time were a single agreement.

1. (1)

   In this section "default sum" means in relation to the borrower under a P2P agreement, a sum (other than a sum of interest) which is payable by the borrower under the agreement in connection with a breach of the agreement by the borrower.

2. (2)

   But a sum is not a default sum in relation to the borrower simply because as a consequence of the breach of the agreement the borrower is required to pay the sum earlier than would otherwise have been the case.

Where a default sum becomes payable under a P2P agreement by the borrower, the firm must give notice to the borrower within 35 days of a default sum becoming payable by the borrower.

The notice required by CONC 7.19.4 R must contain:

1. (1)

   a form of wording to the effect that it relates to default sums and is given in compliance with FCArules;

2. (2)

   the date of the notice;

3. (3)

   a description of the agreement sufficient to identify it;

4. (4)

   the firm's name, telephone number, postal address and, where appropriate, any other address;

5. (5)

   the amount and nature of each default sum payable under the agreement which has not been the subject of a previous notice of default sums;

6. (6)

   the date upon which each default sum referred to in the notice became payable under the agreement;

7. (7)

   the following statement:

   "This notice does not take account of default sums which we have already told you about in another default sum notice, whether or not those sums remain unpaid."; and

8. (8)

   the total amount of all the default sums included in the notice.