MCOB 5.8 1Home purchase plans

Except in the circumstances in MCOB 5.8.1A R, a 2firm 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 advises the particular customer to enter into one or more home purchase plans, in which case a financial information statement must be provided at the point the advice is given (and financial information statements for all recommended home purchase plans must be provided), unless the advice is given by telephone, in which case the firm must provide a financial information statement within five business days; or2

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   2. (b)

      [deleted]2

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   3. (c)

      [deleted]2

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   4. (d)

      2the customer requests a financial information statement, unless the firm is aware that it is unable to offer that home purchase plan to him; or

   5. (e)

      2as part of an execution-only sale (or potential execution-only sale) the customer has provided the firm with the information in MCOB 4.10.9D R (Execution-only sales) (see MCOB 4.10.9B R and MCOB 4.10.9C G) to indicate which home purchase plan or variation he wishes to enter into.

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.

2A firm need not provide a financial information statement:

1. (1)

   2in relation to a direct deal; or

2. (2)

   2if the customer refuses to disclose key information (for example, in a telephone conversation, his name or a communication address) or where the customer is not interested in pursuing the enquiry; or

3. (3)

   2if the firm does not wish to do business with the customer.

2If the firm chooses not to give a financial information statement in the circumstances set out in MCOB 5.8.1A R, where it has given advice on a direct deal, the firm must give the customer a written record of the advice.

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 document and clearly identifiable as key information that the customer should read; and

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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.

1. (1)

   2Except in the circumstances in (2), whenever a firm provides a customer with information specific to the amount of finance to be provided on a particular home purchase plan following an assessment of the customer's needs and circumstances in order to comply with MCOB 4.10.5D R, it must give, clearly and prominently, the following information:

   1. (a)

      the same information on the firm's product range as is required by MCOB 4.4A.1R (1), MCOB 4.4A.2 R and MCOB 4.4A.4R (1) (as applied in relation to home purchase plans by MCOB 4.10.3A R); and

   2. (b)

      that the customer has the right to request a financial information statement for any home purchase plan which the firm is able to offer the customer.

2. (2)

   A firm need not give the information in (1) if it has previously given that information in compliance with this rule within the last ten business days.

2Whenever, as part of an execution-only sale (or potential execution-only sale), a customer provides a firm with the information in MCOB 4.10.9D R (Execution-only sales) (see MCOB 4.10.9B R and MCOB 4.10.9C G) the firm must inform the customer, clearly and prominently, unless the firm has previously given this information in compliance with this rule within the last ten business days, that the customer has the right to request a financial information statement for any home purchase plan which the firm is able to offer the customer.