Reset to Today

To access the FCA Handbook Archive choose a date between 1 January 2001 and 31 December 2004.

Content Options:

Content Options

View Options:

Alternative versions

  1. Point in time
    2014-06-01

CONC 8.5 Financial statements and debt repayment offers

CONC 8.5.1RRP

A firm must ensure that a financial statement sent to a lender on behalf of a customer:

  1. (1)

    is accurate and realistic and must present a sufficiently clear and complete account of the customer's income and expenditure, debts and the availability of surplus income;

    [Note: paragraph 3.24 of DMG]

  2. (2)

    state any fees or charges being made by the firm;

  3. (3)

    is sent only after having obtained the customer's consent to send the statement and the customer's confirmation as to the accuracy of the statement;

    [Note: paragraph 3.26f and g of DMG]

  4. (4)

    is provided to the customer's lenders as soon as practicable after the customer has confirmed its accuracy; and

    [Note: paragraph 3.26e of DMG]

  5. (5)

    is also sent to the customer, together with any accompanying correspondence.

    [Note: paragraph 3.26h of DMG]

CONC 8.5.2GRP

The format of the financial statement sent to lenders on behalf of the customer should be uniform and logically structured in a way that encourages consistent responses from lenders and reduces queries and delays. Firms may wish to use the Common Financial Statement facilitated by the Money Advice Trust or an equivalent or similar statement.

[Note: paragraph 3.24 of DMG]

CONC 8.5.3GRP
  1. (1)

    Where a firm makes an offer to a lender to repay a customer's debts on behalf of a customer, the offer should be realistic, sustainable and in accordance with CONC 8.3.2 R should, in particular, have regard to the best interests of the customer.

  2. (2)

    A sustainable offer should enable the customer to meet repayments in full when they are due out of the customer's disposable income for the whole duration of the repayment proposal.

  3. (3)

    Setting the offer should take full account of a customer's obligations to pay taxes, fines, child support payments and those debts which could result in loss of access to essential goods or services or repossession of, or eviction from, the customer's home.

  4. (4)

    In considering what are essential goods and services, the firm should consider the customer's personal circumstances, for example, for disabled persons debts for telecommunications services are likely to be essential.

    [Note: paragraphs 3.25, 3.26c and 3.28d of DMG]

CONC 8.5.4RRP

A firm must:

  1. (1)

    take reasonable steps to verify the customer's identity, income and outgoings;

    [Note: paragraph 3.26a of DMG]

  2. (2)

    seek explanations if a customer indicates expenditure which is particularly high or low; and

    [Note: paragraph 3.26b of DMG]

  3. (3)

    where applicable, notify a customer that a particular lender will not deal with the firm (for whatever reason), as soon as possible after the firm becomes aware that the customer owes a debt to that lender.

    [Note: paragraph 3.26l of DMG]

CONC 8.5.5GRP

What are reasonable steps for verification of the identity, income and ougoings of a customer depends on the circumstances of the case and the type of service offered by the firm. Estimates of expenditure would be reasonable where precise figures are not readily available. The Common Financial Statement includes expenditure guidelines, but where a firm uses the Common Financial Statement or an equivalent or similar statement which includes such guidelines, the use of expenditure guidelines needs to take into account the individual circumstances of the customer.

Note: paragraph 3.26a (box) of DMG]