MCOB 5.8 1Home purchase plans

A firm dealing directly with a customer must ensure that the customer is, or has been, provided with an appropriate financial information statement for a home purchase plan in a durable medium:

1. (1)

   before the customer submits an application for that particular plan to a home purchase provider; and

2. (2)

   without undue delay when any of the following occurs:

   1. (a)

      the firm makes a personal recommendation to the customer to enter into a home purchase plan (unless the personal recommendation is made by telephone, in which case a firm must ensure the financial statement is or has been provided as soon as practicable after the telephone call);

   2. (b)

      the firm provides written information that is specific to the amount of finance to be provided on a particular plan; or

   3. (c)

      the customer requests written information from the firm that is specific to the amount of finance to be provided on a particular plan, unless the firm does not wish to do business with the customer.

3. (3)

   A firm may comply with (1) and (2) by providing an offer document if this can be done as quickly as providing a financial information statement.

A financial information statement must:

1. (1)

   be personalised to reflect the customer's requirements;

2. (2)

   contain only the material prescribed or permitted in this section;

3. (3)

   contain that material in the order set out in this section; and

4. (4)

   present the material concisely, clearly and consistently.

A financial information statement, if not set out in a separate document, must be:

1. (1)

   in a prominent place within the other document and clearly identifiable as key information that the customer should read; and

2. (2)

   separate from the other content of the document in which it is included.

A financial information statement must contain:

1. (1)

   a prominent Key facts logo at the top of the statement;

2. (2)

   the term of the home purchase plan;

3. (3)

   the overall cost of the plan, comprising:

   1. (a)

      the purchase price of the property;

   2. (b)

      the deposit payable;

   3. (c)

      the amount of the plan required;

   4. (d)

      the amount of any fees added to the plan;

   5. (e)

      the total amount payable; and

   6. (f)

      the amount the customer must pay per £1 provided under the plan;

4. (4)

   details of the payments the customer must make, including:

   1. (a)

      the assumed start date;

   2. (b)

      all rental rates that will apply;

   3. (c)

      when the rental rates will apply and for how long;

   4. (d)

      for each rental rate, the number, frequency and amount of the periodic payments that will apply;

   5. (e)

      in relation to the first periodic payment, the amount of the purchase payment and of the rental payment;

   6. (f)

      the amount of any insurance rent payments;

   7. (g)

      a summary total; and

   8. (h)

      details of when the summary total will change.

A financial information statement may contain a figure equivalent to an APR after the amount the customer must pay per £1 provided under the home purchase plan. A firm must use an approach equivalent to the APR rules when calculating an APR equivalent.

A firm must ensure that the customer has had a reasonable opportunity to consider the financial information statement and risks and features statement before committing the customer to an application.