Related provisions for CONC 2.10.4
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Where a firm reasonably suspects a customer has, or may have, some form of mental capacity limitation which would constrain the customer's ability to make a decision to borrow, the firm should not regard the customer as lacking capacity to make the decision unless the firm has taken reasonable steps without success to assist the customer to make a decision. [Note: paragraph 3.2 of MCG]
Amongst the most common potential causes of mental capacity limitations are the following examples, a mental health condition, dementia, a learning disability, a developmental disorder, a neurological disability or brain injury and alcohol or drug (including prescribed drugs) induced intoxication. [Note: paragraph 2.9 of MCG]
A firm is likely to have reasonable grounds to suspect a customer may have some form of mental capacity limitation if the firm observes a specific indication (behavioural or otherwise) that could be indicative of some form of limitation of the customer's mental capacity. Examples (amongst others) of indications might include: (1) where a firm has an existing relationship with a customer, the customer making a decision that appears to the firm to be unexpected or out of character;
(1) A firm should not unfairly discriminate against a customer who it understands, or reasonably suspects, has a mental capacity limitation, in particular, by inappropriately denying the customer access to credit. [Note: paragraph 4.8 of MCG](2) It would not be inappropriate not to grant credit nor significantly increase the amount of credit under an agreement nor set a credit limit for running account credit where the firm reasonably believes the agreement or decision would be
(1) In accordance with Principle 6, firms should take reasonable steps to ensure they have suitable business practices and procedures in place for the fair treatment of customers who they understand, or reasonably suspect, have or may have a mental capacity limitation. [Note: paragraph 4.1 of MCG](2) CONC 7.2.1 R requirefirms to establish and implement arrears policies and procedures, which include policies and procedures for the fair and appropriate treatment of customers the
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation the firm should use its business practices and procedures to: (1) assist the customer, where possible, to make an informed borrowing decision; and (2) ensure its lending decision is informed and responsible in the circumstances and mitigates the potential risks to the customer.[Note: paragraphs 4.3 and 4.5 of MCG]
Firms' practices and procedures should be designed to assist customers that firms understand have, or reasonably suspect of having, mental capacity limitations to overcome, to the extent possible, the effect of the limitations and place them, to the extent possible, on an equivalent basis to customers who do not have such limitations, to increase the likelihood of customers being able to make informed borrowing decisions. [Note: paragraph 4.4 of MCG]
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation it should consider allowing the customer: (1) sufficient time in the circumstances to weigh up the information and explanations the firm has given;(2) sufficient time in the circumstances to make an informed borrowing decision;(3) to defer a decision to borrow to a later date.[Note: paragraphs 4.26, 4.27 and 4.28 of MCG]
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation it should apply a high level of scrutiny to the customer's application for credit, in order to mitigate the risk of the customer entering into unsustainable borrowing (see CONC 5.2 and CONC 5.3). [Note: paragraphs 4.32 and 4.33 of MCG]
(1) A firm should balance the risk of a customer taking on unsustainable borrowing against inappropriately or unnecessarily denying credit to a customer. (2) Where a firm understands or reasonably suspects a customer has or may have a mental capacity limitation, it should undertake an appropriate and effective creditworthiness assessment or assessment required by CONC 5.2.2R (1) and it would be appropriate not to place over-reliance on information provided by the customer for
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation the firm should take particular care that the customer is not provided with credit which the firm knows, or reasonably believes, to be unsuitable to the customer's needs, even where the credit would be affordable.[Note: paragraph 4.43 of MCG]