Related provisions for MCOB 9.7.3

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MCOB 5.6.1GRP
MCOB 5.6 sets out the required content of an illustration provided to a customer by a firm.
MCOB 5.6.3RRP
Section 13 in MCOB 5 Annex 1 is required only where the illustration is provided to the customer by, or on behalf of, a mortgage intermediary. If this is not the case, Section 14 must be renumbered Section 13.
MCOB 5.6.4GRP
(1) Further requirements regarding the use of the Key facts logo and the location of specimens are set out in GEN 5.1 and GEN 5 Annex 1 G.33(2) MCOB 5.6.2 R(3) does not prevent the use of different fonts and typefaces for headings and risk warnings. Its purpose is to prevent particular sections of the illustration from being made less prominent than other sections through the inconsistent use of font sizes and typefaces.(3) The illustration can contain the mortgage lender's or
MCOB 5.6.5RRP
The illustration provided to customers must:(1) contain only the material prescribed in MCOB 5.6 and no other material except where provided for elsewhere in MCOB 5.6; and(2) be in a document separate from any other material that is provided to the customer.
MCOB 5.6.13RRP
Where the illustration relates to a regulated mortgage contract that is sub-divided into different parts with different types of interest rate or different rates of interest or different conditions, or a combination of these, the requirements in MCOB 5.6 may be adapted to accommodate this. The adaptations made must be limited to those that are necessary.
MCOB 5.6.14GRP
(1) MCOB 5.6.13 R applies where, for example, the illustration covers a regulated mortgage contract that is:(a) divided so that a certain amount of the loan is payable on a fixed interest rate, and a certain amount on a discounted interest rate; or(b) a combination of a repayment mortgage and an interest-only mortgage and the loan is subdivided into different types of interest rate and/or different rates of interest.(2) MCOB 5.6.13 R does not apply where an illustration covers
MCOB 5.6.15RRP
At the head of the illustration, the following information must be included:(1) the customer's name;(2) the date of issue of the illustration;(3) details of how long the illustration is valid and whether there is any date by which the regulated mortgage contract covered by the illustration needs to commence (for example, where a fixed interest rate is only available if the regulated mortgage contract commences before a certain date); and(4) the prescribed text at the head of the
MCOB 5.6.16RRP
Under the section heading 'About this illustration', the prescribed text in MCOB 5 Annex 1 under this heading must be included.
MCOB 5.6.17RRP
(1) Unless (2) applies, under the section heading 'Which service are we providing you with?' the prescribed text in MCOB 5 Annex 1 under this heading must be included, with a 'check box' for each statement, one of which must be marked prominently to indicate the level of service provided to the customer.(2) If the level of service described in the illustration is provided by another firm, (1) may be replaced by the following:Under the section heading 'Which service are we providing
MCOB 5.6.18RRP
(1) Under the section heading 'What you have told us', the illustration must state the information that has been obtained from the customer under MCOB 5.6.6 R (apart from MCOB 5.6.6 R(1) which is provided for in Section 4 of the illustration), and can include brief details of any other information that has been obtained from the customer and used to produce the illustration.(2) If the amount on which the illustration is based includes the amount that the customer wants to borrow
MCOB 5.6.19RRP
Where the same illustration covers a regulated mortgage contract that is a combination of a repayment mortgage and an interest-only mortgage, either:(1) Section 3 of the illustration must state the amount the customer wishes to borrow as a repayment mortgage and the amount required as an interest-only mortgage; or(2) Section 3 of the illustration must summarise the repayment method as partly an interest-only mortgage and partly a repayment mortgage, and Section 4 of the illustration
MCOB 5.6.20RRP
Where the same illustration covers a regulated mortgage contract that has different parts of the loan over a different term (that is, the final repayment date of the loan parts are different), either:(1) Section 3 of the illustration must state the amount repayable over each term; or(2) Section 3 of the illustration must state the longest term that applies and Section 4 of the illustration must state the amount repayable over each term.
MCOB 5.6.21RRP
For the purpose of illustrating to the customer the repayment method in Section 3 or Section 4 of the illustration, or the cost of the regulated mortgage contract in Section 5 of the illustration, if the illustration covers a regulated mortgage contract that is a combination of more than one interest-only part on the same product terms but with different repayment dates, the illustration must either treat it as one part by assuming the longest term, or alternatively treat it as
MCOB 5.6.22RRP
At the end of Section 3 of the illustration a statement must be included making clear that changes to any of the information obtained from the customer, and where appropriate to the valuation of the property, could alter the details elsewhere in the illustration, and encouraging the customer to ask for a revised illustration in this event.
MCOB 5.6.23GRP
An example of the type of statement that would satisfy MCOB 5.6.22 R is:'The valuation that will be carried out on the property and changes to any of the information you have given us could alter the information in this illustration. If this is the case please ask for a revised illustration.'
MCOB 5.6.27RRP

Description of interest rate types and rates of interest. This table belongs to MCOB 5.6.26R:

Description of the interest rate

Amount payable in each instalment

Lender's base mortgage rate - must be described as the [Lender]'s standard variable rate, currently X%, [where applicable insert the date at which the interest rate ends or period for which the interest rate applies].

Amount based on X%.

Fixed rate - must be described as a fixed rate of X% [where applicable insert the date at which the interest rate ends or the period for which the interest rate applies].

Amount based on the fixed rate of X%.

Discounted rate - must be described as a variable rate, currently X%, with a discount of Y% [where applicable insert the date at which the discount ends or the period for which the discount applies], giving a current rate payable of Z%.

Amount based on Z%.

Capped rate - must be described as a variable rate, currently X%, which will not go above a ceiling of Y% [where applicable insert the date at which the capped interest rate ends or the period for which the capped interest rate applies].

Amount based on the current interest rate payable (X%).

Capped and collared - must be described as a variable rate, currently X%, which will not go below a floor of Y%, or above a ceiling of Z% [where applicable insert the date at which the capped and collared interest rate ends or the period for which the capped and collared interest rate applies].

Amount based on the current interest rate payable (X%).

Tracker rate - must be described as a variable rate which is [X% above/X% below/the same as] [insert interest rate tracked, currently Z%,] [where applicable insert the date at which the rate ends or the period for which the interest rate applies], to give a current rate payable of Y%. Details should also be provided of how soon after an interest rate change the mortgage interest rate is adjusted.

Amount based on Y%.

Deferred rate - must be described as a variable rate, currently X%, where Y% is not paid now but is added to your mortgage [where applicable insert the date at which the deferred interest rate ends or the period for which the deferred interest rate applies], to give a current rate payable of Z%.

Amount based on Z%.

Stepped rate where different interest rates apply over different time periods (for example, fixed interest rate in year 1 changes in year 2). Each element should be dealt with individually as above.

Amount for each of the 'steps'.

Combinations of the above must be treated in the same way as the descriptions above, (for example, if a discounted interest rate has a 'floor' then it must be described as such).

Follow the above treatment depending on the combination.

MCOB 5.6.28RRP
Where the loan under the regulated mortgage contract is divided into more than one part (for example where part of the loan is a fixed interest rate and part of the loan is a discounted variable interest rate) and the firm displays this in a tabular format in the illustration:(1) the following text must be used to introduce the table 'As this mortgage is made up of more than one part, these parts are summarised below:';(2) each part must be numbered for ease of reference in the
MCOB 5.6.30GRP
An example of further information that may be included in accordance with MCOB 5.6.29 R might be that an 'approval in principle' has been granted subject to valuation and satisfactory credit reference.
MCOB 5.6.31RRP
Under the section heading 'Overall cost of this mortgage' where the regulated mortgage contract has an agreed term for repayment and a regular payment plan (that is, it is not a revolving credit agreement such as a secured overdraft or mortgage credit card, or a regulated mortgage contract where all of the interest rolls up, such as an open-ended bridging loan9):9(1) the following text must be included in the illustration: 'The overall cost takes into account the payments in Sections
MCOB 5.6.32RRP
Under the section heading 'Overall cost of this mortgage' where the regulated mortgage contract has no agreed term for repayment, (and a 12 month term has been assumed), or no regular payment plan, or both (for example, a revolving credit agreement such as a secured overdraft or mortgage credit card or a regulated mortgage contract where all the interest rolls up such as an open-ended bridging loan9):9(1) the following text must be included in the illustration: 'The overall cost
MCOB 5.6.33GRP
MCOB 5.6.31 R(5) and MCOB 5.6.32 R(5) would require, for example, a reference to the fact that the overall cost takes into account mortgage payment protection insurance where this is required as a condition of the regulated mortgage contract to which the illustration relates. The requirement to take out such insurance must be stated in Sections 4 and 9 of the illustration in accordance with MCOB 5.6.25 R(6), MCOB 5.6.74 R or MCOB 5.6.77 R.
MCOB 5.6.34RRP
The following text must be included after the text required by MCOB 5.6.31 R or MCOB 5.6.32 R with the relevant cost measures shown in the right-hand column of Section 5 in accordance with the layout shown in MCOB 5 Annex 1:(1) 'The total amount you must pay back, including the amount borrowed is £[insert total amount payable]';(2) 'This means you pay back £[insert the total amount payable] divided by the amount on which the illustration is based from MCOB 5.6.6 R(2) plus all
MCOB 5.6.35RRP
(1) The APR and the total amount payable in MCOB 5.6.34 R must be calculated on the basis of information obtained from the customer under MCOB 5.6.6 R.(2) Where there is a charge to be included in the APR and total amount payable and the precise amount of that charge is not known at the time that the illustration is provided, MCOB 10.3 (Formula for calculating the APR) sets out a number of relevant assumptions to be used. If the method for including the charge is not addressed
MCOB 5.6.37RRP
At the end of Section 5 of the illustration the following text must be included:(1) unless the interest rate is fixed throughout the term of the regulated mortgage contract:'The figures in this section will vary following interest rate changes and if you do not keep the mortgage for [insert term from MCOB 5.6.6 R(4)].'; and(2) (a) where the regulated mortgage contract is a repayment mortgage:'Only use the figures in this section to compare the cost with another repayment mortgage.';
MCOB 5.6.38GRP
The purpose of the illustration is to provide the customer with details of the cost of borrowing the amount required over the term specified from MCOB 5.6.6 R(2) and MCOB 5.6.6 R(4). Section 12 has been designed specifically to allow examples of the effect of any additional features of the regulated mortgage contract such as a linked current account or a linked savings account. Examples of these features should therefore be shown in Section 12 and not in Section 5 or Section 6
MCOB 5.6.40RRP
The heading for Section 6 of the illustration and the heading of the column on the right-hand side of this section must state the frequency with which payments must be made by the customer. (For example, if payments are to be made on a monthly basis, the heading for this section must be 'What you will need to pay each month' and the column must be headed 'Monthly payments'.)
MCOB 5.6.41RRP
All the payments in Section 6 of the illustration must be calculated based on the frequency used for the purposes of the headings in MCOB 5.6.40 R and must be shown in the column on the right-hand side of this section.
MCOB 5.6.42RRP
Section 6 of the illustration must contain the following information: (1) the loan amount on which the illustration is based. This figure should include all fees, charges and insurance premiums that have been added to the loan in accordance with MCOB 5.6.18 R(2) and MCOB 5.6.18 R(3), and the following text must follow the loan amount:'and include[s] the [fees] [and] [insurance premiums] that are shown in [Section 8] [and] [Section 9] as being added to your mortgage.'(2) the assumed
MCOB 5.6.43RRP
Where the illustration covers a regulated mortgage contract that automatically converts from one repayment method to another after a specified period, then the illustration must show the effect of this change on the regular payment, in the same way as the requirements in MCOB 5.6.42 R(3).
MCOB 5.6.50RRP
Where the illustration covers a regulated mortgage contract that is a combination of a repayment mortgage and an interest-only mortgage, the payment amounts in MCOB 5.6.42 R(3)(d) must be the combination of the amount to be paid on the repayment mortgage and the amount to be paid on the interest-only mortgage, unless MCOB 5.6.13 R or MCOB 5.6.54 R apply in which case they must be stated separately.
MCOB 5.6.51RRP
Where the interest is deferred on the regulated mortgage contract, the following text must be included under the information on the deferred interest rate included in the illustration in accordance with MCOB 5.6.42 R(3):'"The interest deferred will be added to your mortgage. The table at Section [insert 6a or 6b if MCOB 5.6.55 R applies] of this illustration shows how this will affect the amount you owe.'
MCOB 5.6.56RRP
Where MCOB 5.6.55 R applies and part of the regulated mortgage contract is an interest-only mortgage:(1) if a quotation for the repayment strategy9has been included in the illustration in accordance with MCOB 5.6.52 R(3) then MCOB 5.6.52 R(5) does not apply.9(2) a statement is required to indicate that these payments do not include the cost of any savings plan.
MCOB 5.6.59RRP
Under the section heading 'Are you comfortable with the risks?':(1) under the sub-heading 'What if interest rates go up?' the illustration must include the following:(a) if the interest rate is fixed throughout the term of the regulated mortgage contract, an explanation that the payments will not vary because the interest rate is fixed;(b) if the interest rate is fixed for part of the term of the regulated mortgage contract, an explanation of when or how increases in the interest
MCOB 5.6.60RRP
The amount by which the customer's payments would increase in accordance with MCOB 5.6.59 R(1)(g) and (h) must be calculated as follows:(1) the firm must use the total amount borrowed, or assume that all payments due on the regulated mortgage contract have actually been paid, all additional fees and payments due have been paid, and no underpayments or overpayments have been made;(2) where all or part of the regulated mortgage contract is a repayment mortgage, the calculation must
MCOB 5.6.66RRP
Under the section heading 'What fees must you pay?' the illustration must:(1) itemise all the fees that are included in the calculation of the APR in accordance with MCOB 10 (Annual Percentage Rate), excluding any charges for insurance set out in Section 9 in accordance with MCOB 5.6.73 R; and1(2) include a statement at the end of the section using the following text:'You may have to pay other taxes or costs in addition to any fees shown here.'
MCOB 5.6.67GRP
An example of a fee that would normally be included in Section 8 would be a fee to re-inspect a property after completion of works if it is known that this fee will be charged at the time the illustration is produced. An example of a fee that would not be included would be a fee payable by the customer to insure their property elsewhere (however this would need to be stated in Section 9 of the illustration 'Insurance', as required by MCOB 5.6.77 R(2)). Fees payable upon repayment
MCOB 5.6.69RRP
The following information must be provided for each fee included in this section of the illustration in accordance with MCOB 5.6.66 R(1):(1) a description of the fee;(2) the amount payable by the customer recorded in a column headed 'Fee amount' on the right-hand side of this section;(3) for fees included under the sub-heading 'Other fees', to whom the fee is payable;(4) when the fee is payable;(5) whether or not the fee is refundable, and if so, the extent to which it is refundable;
MCOB 5.6.70RRP
(1) If a higher lending charge is payable by the customer, the following text must be used to describe such a charge for the purposes of MCOB 5.6.69 R:'A higher lending charge is payable because you are borrowing [insert the ratio of the mortgage amount (from MCOB 5.6.6 R(2)) to the property's price or value (from MCOB 5.6.6 R(3))] of the property's [estimated] [price/value].'(2) If the customer has asked for any fees to be added to the loan, this must be stated alongside each
MCOB 5.6.71GRP
'Other fees' will include any fee charged by a mortgage intermediary, or another third party, for advising on or arranging a regulated mortgage contract but not commission or procuration fees (which are dealt with in Section 13 of the illustration).
MCOB 5.6.73RRP
(1) Under the section heading 'Insurance' the illustration must include details of:(a) insurance which is a tied product; and(b) insurance which is required as a condition of the regulated mortgage contract which is not a tied product.(2) A firm may also provide details of insurance which it is optional for the customer to take out under this section heading.(3) It must be clear to the customer which products he is required to purchase under which circumstances (for example, where
MCOB 5.6.77RRP
The following information must be included under the sub-heading 'Insurance you must take out as a condition of this mortgage but that you do not have to take out through [insert the name of the mortgage lender, or where relevant the name of the mortgage intermediary, or both]':(1) if the regulated mortgage contract requires the customer to take out an insurance policy (other than that which is a tied product which the customer is obliged to purchase through the mortgage lender,
MCOB 5.6.78GRP
Under the sub-heading 'Insurance you must take out as a condition of this mortgage but that you do not have to take out through [insert name of mortgage lender or where relevant the name of the mortgage intermediary, or both]' the illustration should not include any insurance policy that may be taken out by a mortgage lender itself to protect its own interests rather than the customer's interests, for example, because of the ratio of the loan amount to the property value.1
MCOB 5.6.79GRP
If the cost of any insurance that the mortgage lender might take out to protect its own interests, because of the ratio of the loan amount to the property value, is passed on to the customer, it will be shown elsewhere in the illustration, for example, as a higher lending charge or in the interest rate charged.
MCOB 5.6.80RRP
A firm may include in the illustration, under the sub-heading 'Optional insurance', quotations (estimated where necessary) for any insurance products (other than the insurance products covered elsewhere in the illustration in accordance with MCOB 5.6.74 R and MCOB 5.6.77 R) that the firm issuing the illustration wishes to promote to the customer.
MCOB 5.6.81RRP
If no quotations are included in the illustration in accordance with MCOB 5.6.80 R, the sub-heading 'Optional insurance' must not be included in the illustration.
MCOB 5.6.82RRP
(1) If any quotations for insurance are included in the illustration in accordance with MCOB 5.6.74 R(3), MCOB 5.6.77 R(1) or MCOB 5.6.80 R, the illustration:(a) must include a brief description only of the type of insurance (full details of the insurance cover may however be provided separately); and(b) (i) must include the total price to be paid by the customer in a column on the right hand side of the illustration under the heading '[insert frequency of payments quoted] payments';
MCOB 5.6.84RRP
Under the heading 'What happens if you do not want this mortgage any more?', the illustration must include the following information on the regulated mortgage contract:(1) under the sub-heading 'Early repayment charges':(a) an explanation that the customer cannot repay the regulated mortgage contract early, if this is the case;(b) an explanation of whether early repayment charges are payable;(c) an explanation of when early repayment charges are payable;(d) an explanation of any
MCOB 5.6.86RRP
Where MCOB 5.6.84 R(1)(f) would result in more than three cash amounts being shown in the illustration, the cash amounts shown in the illustration may be restricted to three examples. These examples must be representative of the full range of charges that apply and not be limited to the lowest charges that apply. These three examples are in addition to:(1) any statement of the amount of any fees described in MCOB 5.6.84 R(1)(d); and(2) the maximum early repayment charge required
MCOB 5.6.88RRP
(1) In calculating example cash amounts in accordance with MCOB 5.6.84 R(1)(f), it must be assumed that:(a) the regulated mortgage contract is repaid in full;(b) unless the original amount borrowed is used, that all payments due on the regulated mortgage contract are actually paid;(c) additional fees and charges such as insurance premiums have been paid; and(d) no underpayments or overpayments have been made.(2) If:(a) cashbacks or other incentives need to be repaid; or(b) fees
MCOB 5.6.89RRP
Where the cash examples from MCOB 5.6.88 R included in the illustration would vary either if the interest rate charged on the regulated mortgage contract changed or with changes in interest rates generally, an appropriate warning that the early repayment charges may vary from the cash examples must be included in the illustration.
MCOB 5.6.90RRP
(1) Under the section heading 'What happens if you want to make overpayments?', the illustration must include details of any restrictions on lump sum and regular overpayments on the regulated mortgage contract, together with a statement as to whether or not the amount on which the interest charged is recalculated is reduced immediately on receipt of any lump sum or regular overpayment.(2) Where such recalculation does not take place immediately (for example, if an annual rest
MCOB 5.6.92RRP
Under the section heading 'Additional features' the illustration must include, where relevant, details of any additional features or facilities under the various sub-headings in MCOB 5.6.94 R.
MCOB 5.6.95RRP
Under the sub-heading 'Underpayments', the illustration must include details of circumstances in which the customer can make underpayments and a brief statement of any conditions that apply.
MCOB 5.6.96RRP
Under the sub-heading 'Payment holidays', the illustration must include details of circumstances in which the customer can take payment holidays and a brief statement of any conditions that apply.
MCOB 5.6.97RRP
Under the sub-heading 'Borrow back', the illustration must include details of circumstances in which the customer can borrow back any monies overpaid and a brief statement of any conditions that apply.
MCOB 5.6.98RRP
Under the sub-heading 'Incentives', the illustration must include:(1) any incentives including cashbacks; and(2) if a cashback is provided, the amount of the cashback and details of when it is paid to the customer.
MCOB 5.6.99RRP
Under the sub-heading 'Additional borrowing available without further approval', the illustration must provide details of circumstances in which there are any linked borrowing facilities that would allow the customer to increase the amount of the loan on which the illustration is based without any further approval from the mortgage lender (for example, if there are additional drawdown facilities).
MCOB 5.6.102RRP
Under the sub-heading 'Credit card', the illustration must:(1) state if a credit card is offered with the regulated mortgage contract; and(2) if a credit card is offered and it is a mortgage credit card:(a) unless (b) applies, include the following text:'This card will not give you a number of the statutory rights associated with traditional credit cards. Your mortgage offer will tell you more about the differences.'; or(b) where the mortgage lender provides the customer with
MCOB 5.6.103RRP
Where any of the additional features under MCOB 5.6.99 R to MCOB 5.6.102 R inclusive apply, then the following must also be stated if the amount of additional borrowing that would be available to the customer is stated in the illustration:(1) the maximum additional amount available;(2) if the interest rate payable on any additional borrowing is different to the interest rate in Section 4 and Section 6 of the illustration, the interest rate and the APR charged on the additional
MCOB 5.6.106RRP
(1) Where additional features are included in accordance with MCOB 5.6.92 R and these are credit facilities that do not meet the definition of a regulated mortgage contract or a regulated credit agreement10, the relevant parts of Section 12 of the illustration must include the following text:'This additional feature is not regulated by the FCA'.1(2) Where additional features are included in accordance with MCOB 5.6.92 R and these are credit facilities that meet the definition
MCOB 5.6.110RRP
(1) Under the sub-heading 'Linked savings account', the illustration must include the following information:(a) whether a linked savings account is a compulsory or optional product (if the savings account is a compulsory product this must also be stated in Section 4 of the illustration in accordance with MCOB 5.6.25 R(6));(b) the interest rate paid on the linked savings account if it differs from the interest rate charged on the regulated mortgage contract; and(c) the firm providing
MCOB 5.6.111GRP
If an example is included in the illustration in accordance with MCOB 5.6.109 R(2) or MCOB 5.6.110 R(2), it must be based on information obtained from the customer and the amounts that are intended to be paid into the current or savings account on a regular basis; the amounts that it is intended are saved; and the actual or likely expenditure profile. The amounts involved and the expenditure profile should not be standard assumptions made by the firm, but should be those of the
MCOB 5.6.113RRP
Where the illustration is issued to a customer by, or on behalf of, a mortgage intermediary, Section 13 'Using a mortgage intermediary' must be included in the illustration and must include the following:(1) unless MCOB 5.6.114 R applies, a clear statement of the amount payable (either directly or indirectly) by the mortgage lender to the mortgage intermediary, or to any third parties; and(2) the name of the mortgage lender who will make the payment, the name of the mortgage intermediary
MCOB 5.6.118GRP
MCOB 2.3.7 R requires any material inducements provided by a mortgage lender, whether directly or indirectly, to a mortgage intermediary or third party (unless the payment only reflects the cost of outsourcing work relating to the processing of mortgage applications by a firm unconnected to the mortgage intermediary) to be quantified in cash terms, which will enable the cash values to be included in the illustration in accordance with MCOB 5.6.117 R.1
MCOB 5.6.120RRP
This section must be renumbered Section 13 if the illustration is not provided by, or on behalf of, a mortgage intermediary.
MCOB 5.6.122RRP
This section must follow the section 'Where can you get further information about mortgages?' and must include the name, address and contact point of the firm providing the illustration.
MCOB 5.6.123GRP
An example of wording which would comply with MCOB 5.6.122 R would be:'If you wish to discuss this mortgage illustration please contact [name of firm] at [address] or on [telephone number]'.
MCOB 5.6.124RRP
4(1) 4The following words must be prominently displayed in the illustration, after the contact details: 'Your home may be repossessed if you do not keep up repayments on your mortgage'.(2) If the loan may be secured on property which is not the customer's home the statement in (1) may be amended but only to the extent necessary in order to reflect that fact.4
MCOB 5.6.126GRP
(1) An amortisation table may be added to the end of the illustration after the information required by MCOB 5.6.124 R if the mortgage lender or mortgage intermediary wishes. A firm may find that this is particularly appropriate to illustrate certain types of regulated mortgage contract, for example, a regulated mortgage contract with more than one part.(2) The purpose of (1) is to permit a firm to add an amortisation table in accordance with the European Commission's 'Recommendation
MCOB 5.6.127RRP
If the customer's liability under a regulated mortgage contract is in a currency other than sterling, MCOB 5.6 applies to the illustration for that regulated mortgage contract with the following amendments:(1) all cash amounts must be given in the relevant currency except where otherwise required in (2)(a) and (3);(2) the following information must be stated under Section 4 'Description of this mortgage':(a) the amount in sterling on which the illustration is based from MCOB 5.6.6
MCOB 5.6.132RRP
If the interest rate charged on the regulated mortgage contract is deferred, MCOB 5.6 applies with the following additions:(1) A section headed: 'Effect of deferring interest on the amount you owe' must be included in the illustration after Section 6.(2) This section must be numbered 6a so that the numbering follows on consecutively from the preceding section unless MCOB 5.6.55 R applies in which case it should be numbered 6b.(3) Under the section heading the following text must
MCOB 5.6.134RRP
The heading for Section 6 of the illustration and the heading of the column on the right-hand side of this section must state the frequency with which payments must be made by the customer. (For example, if payments were to be made on a monthly basis, the heading for this section would be 'What you will need to pay each month' and the column would be headed 'Monthly payments'). Where no regular payments are required on the regulated mortgage contract, for example where all interest
MCOB 5.6.135RRP
All the payments in Section 6 of the illustration must be calculated based on the frequency used for the purposes of the headings in MCOB 5.6.40 R and must be shown in the column on the right-hand side of this section. If no payments are required, for example on a bridging loan9 or secured overdraft, then this column should be marked on the illustration as nil.9
MCOB 5.6.136RRP
Section 6 of the illustration must contain the following information:(1) the loan amount on which the illustration is based. Where fees are being added to the loan then this figure should include all fees, charges and insurance premiums that have been added to the loan in accordance with MCOB 5.6.18 R(2) and MCOB 5.6.18 R(3), and the following text must follow the loan amount:'and include[s] the fees [and insurance premiums] that are shown in Section 8 [and Section 9] as being
MCOB 5.6.141RRP
The amount by which the total amount payable would increase in accordance with MCOB 5.6.140 R(1)(e) must be calculated as follows:(1) unless the total amount borrowed is used, it must be assumed that all payments due on the regulated mortgage contract have actually been paid, all additional fees and payments due have been paid, and no under or overpayments have been made;(2) unless the total amount borrowed is used, the calculation must be based on the amount of the loan outstanding
MCOB 9.4.46RRP
If, because of the assumed start date of the lifetime mortgage,7 the initial payment differs from the subsequent payments, the initial payment must be shown in this section in accordance with MCOB 9.4.39 R(3)(d).7
MCOB 9.4.48RRP
Unless all of the interest rates described in MCOB 9.4.47 R(4) apply for the life of the loan part to which they apply, then an additional sub section titled "What you will owe in future" must be included to indicate the future stepped payments. This section must:(1) state when a change in payment will occur;(2) state the reason for the change in payment; and(3) confirm that the payment illustrated assumes that interest rates will not change.
MCOB 9.4.50RRP
An explanation of the table required in accordance with MCOB 9.4.51 R must be shown in a box immediately under the heading using the following text:"This shows how the amount(s) paid to you and the interest and any fees that we charge mount up over [insert number of years estimated in accordance with MCOB 9.4.10 R or MCOB 9.4.12 R] years. It has been calculated using the current interest rate(s) of [insert interest rate(s)]. Interest is added to the amount you owe [insert frequency
MCOB 9.4.73RRP
Under the sub-heading 'Insurance you must take out through [insert name of mortgage lender or where relevant the name of the mortgage intermediary, or both]' the following information must be included if the lifetime mortgage7 requires the customer to take out insurance that is a tied product either through the mortgage lender or where relevant the mortgage intermediary:7(1) details of which insurance is a tied product;(2) for how long the customer is obliged to purchase the insurance;(3)
MCOB 9.4.83RRP
Under the heading "What happens if you do not want this mortgage any more?", the illustration must include the following information on the lifetime mortgage:77(1) under the sub-heading "Early repayment charges":(a) an explanation of whether early repayment charges are payable;(b) an explanation of when early repayment charges are payable;(c) an explanation of any other fees that are payable if the lifetime mortgage7 is repaid early, and the current level of these fees;7(d) a
MCOB 9.4.84GRP
The requirements in MCOB 9.4.83 R(1) may be presented in a tabular format.
MCOB 9.4.85GRP
Where a firm does not impose an early repayment charge, it may delete the sub heading 'Circumstances in which early repayment charges do not apply'.
MCOB 9.4.86RRP
Where MCOB 9.4.83 R(1)(e) would result in more than three cash amounts being shown in the illustration, the cash amounts shown in the illustration may be restricted to three examples. These three examples are in addition to the maximum early repayment charge required by MCOB 9.4.83 R(1)(f). These examples must be representative of the full range of charges that apply and not be limited to the lowest charges that apply. These three examples are in addition to:(1) any statement
MCOB 9.4.88RRP
(1) In calculating example cash amounts in accordance with MCOB 9.4.83 R(1)(e), it must be assumed that:(a) the lifetime mortgage7 is repaid in full;7(b) all payments due (if applicable) on the lifetime mortgage7 are actually paid;7(c) additional fees and charges such as insurance premiums have been paid; and(d) no underpayments or overpayments (if applicable) have been made.(2) If:(a) cashbacks or other incentives need to be repaid; or(b) fees need to be paid;the amounts that
MCOB 9.4.89RRP
Where the cash examples from MCOB 9.4.88 R included in the illustration would vary either if the interest rate charged on the lifetime mortgage7 changed or with changes in interest rates generally, an appropriate warning that the early repayment charges may vary from the cash examples must be included in the illustration.7
MCOB 9.4.90RRP
Where the early repayment charge could be higher than those stated in the illustration if the lifetime mortgage7 continued after the end of the term estimated in accordance with MCOB 9.4.10 R or MCOB 9.4.12 R, Section 13 of the illustration must include a clear statement to that effect.7
MCOB 9.4.91RRP
Under the section heading "Additional features" the illustration must include, where relevant, details of how the mortgage lender would treat any payments by the customer in excess of those required, and details of any additional features or facilities under the various sub-headings in MCOB 9.4.93 R.
MCOB 9.4.92RRP
(1) If none of the features at MCOB 9.4.93 R are applicable to the lifetime mortgage7 to which the illustration relates, the section headed 'Additional features' must be retained, but the sub-headings must not be included and a statement must be added to explain that there are no additional features.7(2) Only those features available on the lifetime mortgage7 need be included in the illustration.7(3) If a firm provides a customer with supplementary information about any additional
MCOB 9.4.93RRP
The relevant sub-headings are as follows:(1) "Overpayments"(2) "Underpayments"(3) "Payment holidays"(4) "Borrow back"(5) "Additional borrowing available without further approval"(6) "Additional secured borrowing"(7) "Credit card"(8) "Unsecured borrowing"(9) "Linked current account" and(10) "Linked savings account".
MCOB 9.4.94RRP
(1) Under the sub-heading 'Overpayments', the illustration must include details of any restrictions on lump sum and regular overpayments (if payments are required) on thelifetime mortgage,7 together with a statement as to whether or not the amount on which the interest is recalculated is reduced immediately on receipt of any lump sum or regular overpayment.7(2) Where such recalculation does not take place immediately (for example, if an annual rest method is used), this statement
MCOB 9.4.96RRP
Under the sub-heading "Underpayments", the illustration must include details of whether the customer can make underpayments and a brief statement of any conditions that apply.
MCOB 9.4.97RRP
Under the sub-heading "Payment holidays", the illustration must include details of circumstances in which the customer can take payment holidays and a brief statement of any conditions that apply.
MCOB 9.4.98RRP
Under the sub-heading "Borrow back", the illustration must include details of circumstances in which the customer can borrow back any monies overpaid and a brief statement of any conditions that apply.
MCOB 9.4.99RRP
Under the sub-heading "Additional borrowing available without further approval", the illustration must provide details of circumstances in which additional secured lending is offered with the lifetime mortgage7 that would allow the customer, subject to certain conditions, to increase the amount of the loan on which the illustration is based.7
MCOB 9.4.100RRP
Under the sub-heading "Additional secured borrowing", the illustration must provide details of circumstances in which additional secured lending is offered with the lifetime mortgage7 that would allow the customer, subject to certain conditions, to increase the amount of the loan on which the illustration is based.7
MCOB 9.4.101RRP
Under the sub-heading "Unsecured borrowing", the illustration must provide details of circumstances in which unsecured lending is offered with the lifetime mortgage7 that would allow the customer to increase the amount of the loan on which the illustration is based.7
MCOB 9.4.102RRP
Under the sub-heading "Credit card", the illustration must:(1) state whether a credit card is offered with thelifetime mortgage;7 and7(2) if a credit card is offered and it is a mortgage credit card:(a) unless (b) applies, include the following text:"This card will not give you a number of the statutory rights associated with traditional credit cards. Your lifetime mortgage offer will tell you more about the differences." or(b) where the mortgage lender provides the customer with
MCOB 9.4.103RRP
Where any of the additional features under MCOB 9.4.99 R to MCOB 9.4.102 R inclusive apply, then the following must also be stated if the amount of additional borrowing that would be available to the customer is stated in the illustration:(1) the maximum additional amount available;(2) if the interest rate payable on any additional borrowing is different to the interest rate in Section 5 and Section 8 of the illustration, the interest rate and the APR charged on the additional
MCOB 9.4.104RRP
Where more than one additional borrowing facility from MCOB 9.4.99 R to MCOB 9.4.102 R applies, the total debt and total payments due (if payments are required) under all these linked borrowing facilities must be included under a separate sub-section titled 'Total additional borrowing'.1
MCOB 9.4.105GRP
The purpose of MCOB 9.4.104 R is to show the total amount of any additional borrowing facilities that would be available to the customer and the cost of utilising these facilities. It must combine the amount available under any linked borrowing facilities including additional secured lending, credit cards and unsecured lending.
MCOB 9.4.106RRP
(1) Where additional features are included in accordance with MCOB 9.4.91 R and these are credit facilities that do not meet the definition of a regulated mortgage contract or a regulated credit agreement9, the relevant parts of Section 14 of the illustration must include the following text:"This additional feature is not regulated by the FCA."1(2) Where additional features are included in accordance with MCOB 9.4.91 R and these are credit facilities that meet the definition of
MCOB 9.4.109RRP
Under the sub-heading "Linked current account" the illustration must include the following information:(1) whether a linked current account is a compulsory or optional product (if the current account is a compulsory product this must also be stated in Section 5 of the illustration in accordance with MCOB 9.4.24 R(7));(2) an explanation of the interest rates that apply under different circumstances to the linked current account, if different from the interest rate charged on the
MCOB 9.4.110RRP
Under the sub-heading "Linked savings account" the illustration must include the following information:(1) whether a linked savings account is a compulsory or optional product (if the savings account is a compulsory product this must also be stated in Section 5 of the illustration in accordance with MCOB 9.4.24 R(7));(2) the interest rate paid on the linked savings account if it differs from the interest rate charged on thelifetime mortgage;7 and7(3) the firm providing the linked
MCOB 9.4.111RRP
Under the section heading "Overall cost of this mortgage":(1) the following text must be included in the illustration:"The APR helps you to compare lifetime mortgages by giving you one rate that shows the overall cost of the mortgage. It takes into account some fees and charges as well as the interest due, and this means that the APR may be higher than the interest rate shown in Sections 5 and 8. Only use the APR to compare lifetime mortgages of the same type, and where the same
MCOB 9.4.112GRP
MCOB 9.4.111 R(3) would require, for example, a reference to the fact that the overall cost takes into account mortgage payment protection insurance where this is required as a condition of the lifetime mortgage7 to which the illustration relates. The requirement to take out such insurance must be stated in Sections 5 and 12 of the illustration in accordance with MCOB 9.4.24 R(7), MCOB 9.4.72 R or MCOB 9.4.76 R.7
MCOB 9.4.113RRP
The following text must be included after the text required by MCOB 9.4.111 R with the relevant cost measures shown in the right-hand column of Section 15 in accordance with the layout shown in MCOB 9 Annex 1:(1) "The total amount you would pay back over the example term of [insert number of years in accordance with MCOB 9.4.10 R or MCOB 9.4.12 R] including the amount borrowed is £ [insert total amount payable]", and(2) "The overall cost for comparison is [insert the APR]% AP
MCOB 9.4.116RRP
At the end of Section 15 the following text must be included, if relevant:"The figures in this section will vary following interest rate changes."
MCOB 9.4.117GRP
The prescribed text at MCOB 9.4.116 R would not be relevant if the illustration is for a lifetime mortgage7 that has a fixed interest rate throughout the life of the mortgage.7
MCOB 9.4.119RRP
Where the illustration is issued to a customer by, or on behalf of, a mortgage intermediary, Section 16 "Using a mortgage intermediary" must be included in the illustration and must include the following:(1) unless MCOB 9.4.120 R applies, a clear statement of the amount payable (either directly or indirectly) by the mortgage lender to the mortgage intermediary, or to any third parties; and(2) the name of the mortgage lender who will make the payment, the name of the mortgage intermediary
MCOB 9.4.124GRP
MCOB 2.3.7 R requires any material inducements provided by a mortgage lender, whether directly or indirectly, to a mortgage intermediary or third party (unless the payment only reflects the cost of outsourcing work relating to the processing of mortgage applications by a firm unconnected to the mortgage intermediary) to be quantified in cash terms, which will enable the cash values to be included in the illustration in accordance with MCOB 9.4.123 R.1
MCOB 9.4.126RRP
This section must:(1) follow Section 15 "Overall cost of this mortgage", unless the illustration is issued by a mortgage intermediary, in which case it must follow Section 16 "Using a mortgage intermediary"; and(2) include the name, address and contact point of the firm providing the illustration.
MCOB 9.4.127GRP
An example of wording which would comply with MCOB 9.4.126 R(2) would be:"If you wish to discuss this lifetime mortgage illustration please contact [name of individual] at [address] or on [telephone number]."
MCOB 9.4.128RRP
If the customer's liability under a lifetime mortgage7 is in a currency other than sterling, MCOB 9.4 applies to the illustration for that lifetime mortgage7 with the following modifications:77(1) all cash amounts must be given in the relevant currency except where otherwise required by (2)(a) and (3);(2) the following information must be stated under Section 5 "Description of this mortgage"(a) the amount in sterling on which the illustration is based from MCOB 9.4.13 R based
MCOB 9.4.129RRP
The text at MCOB 9.4.33 R(8) must be immediately followed by the following additional text, prominently displayed (for guidance on prominence see MCOB 2.2.9 G): "Changes in the exchange rate may increase the sterling equivalent of your debt."
MCOB 9.4.130RRP
If the lifetime mortgage7 is a shared appreciation mortgage, MCOB 9.4 applies to the illustration with the following modifications:7(1) Section 5 "Description of this mortgage" must contain the following additional information and text in this order after the details required by MCOB 9.4.24 R to MCOB 9.4.29 R:(a) "This lifetime mortgage involves [name of mortgage lender] taking a percentage share in any increase in the value of your property [insert details of all occasions when
MCOB 9.4.131GRP
The requirements in MCOB 9.4.130 R(1)(c) and (d) may be presented in a tabular format.
MCOB 9.4.132RRP
The requirements at MCOB 9.4.130 R(1) must be immediately followed by the following additional text, prominently displayed (see MCOB 2.2.9 G):"You will need to pay this share in the value of your home to [name of mortgage lender] [insert time at which share must be paid - for example 'when your lifetime mortgage is repaid']. Think carefully about how this will affect the amount left over for you or your estate."
MCOB 9.4.133RRP
8Under the section heading "About this information", the prescribed text under this heading in the home reversion planillustration must be included.
MCOB 9.4.134RRP
(1) 8Unless (2) applies, under the section heading "Which service are we providing you with?" the prescribed text in the home reversion planillustration under this heading must be included with a "check box" for each statement, one of which must be marked prominently to indicate the level of service provided to the customer;(2) If the level of service described in the illustration is provided by another firm, (1) may be replaced by the following: under the section heading "Which
MCOB 9.4.135RRP
8Under the section heading "What is a home reversion plan?", the prescribed text in the home reversion planillustration under this heading must be included.
MCOB 9.4.136RRP
(1) 8Under the section heading "What you have told us", the illustration must state the minimum information a firm must obtain from the customer (apart from details of the plan that the customer is interested in, which is in Section 5 of the illustration), and can include brief details of any other information that has been obtained from the customer and used to produce the illustration.(2) For an instalment reversion plan, where the customer requests an additional illustration
MCOB 9.4.137RRP
8At the end of Section 4 of the illustration a statement must be included making clear that changes to any of the information obtained from the customer, and where appropriate to the valuation of the property, could alter the details elsewhere in the illustration and encouraging the customer to ask for a revised illustration in this event.
MCOB 9.4.139RRP
8Under the section heading "Description of this home reversion plan" the illustration must:(1) state the name of the reversion provider providing the home reversion plan to which the illustration relates (a trading name used by the reversion provider may also be stated), and the name, if any, used to market the home reversion plan;(2) include a statement describing the home reversion plan;(3) if the home reversion plan is linked to an investment, and payments required from the
MCOB 9.4.140RRP
8Further information about the home reversion plan may be included as long as it does not significantly:(1) duplicate information contained elsewhere in the illustration; and(2) extend the length of this section.
MCOB 9.4.141GRP
8An example of further information that may be included might be that an "approval in principle" has been granted subject to valuation.
MCOB 9.4.142RRP
8Under the section heading "Benefits", the illustration must include:(1) a description of the monetary amount(s), and in a box aligned to the right of the document, the monetary amount(s), that the customer will receive as a lump sum and/or as a regular payment;(2) if the home reversion plan is linked to an investment and the payments required from the customer on the home reversion plan will be deducted from the income from the investment, the monetary amount of the net income
MCOB 9.4.145RRP
8The illustration must include under the heading "Risks - important things you must consider" brief statements and warnings on all material risks involving a home reversion plan, including:(1) prominently at the beginning of the section: "A home reversion is a complex property transaction. You should seek legal advice to ensure that you fully understand all of the implications for you and your home and for anyone who might otherwise inherit the property.";(2) the effect of the
MCOB 9.4.147RRP
8Under the heading "Risks - important things you must consider" the illustration must also include the following if they apply:(1) for an instalment reversion plan, a statement that if the customer dies in the early years of the plan, income payments will cease and therefore the full expected benefits of the plan will not be obtained;(2) (a) for an instalment reversion plan where there is a regular cash sum payable; and(b) where:(i) the home reversion plan is linked to an investment;
MCOB 9.4.169RRP
8If the amount payable by the reversion provider to the reversion intermediary and to third parties is £250 or less, the reversion intermediary need only state that the amount of the payment is "no more than £250", unless the customer requests the actual amount.
MCOB 9.4.170RRP
8If the reversion intermediary will pass to the customer all or part of the amount payable to the reversion intermediary by the reversion provider, that fact may be stated in this section, along with the amount payable to the customer.
MCOB 9.4.171RRP
8If the reversion provider will make no payment to the reversion intermediary or any third party, this section may state that the reversion intermediary will receive no payment.
MCOB 9.4.172RRP
8The amount disclosed as payable to the reversion intermediary or third parties must include, but is not limited to:(1) any procuration fee; and(2) a cash value for any material non-cash inducements that the reversion provider provides, whether payable directly or indirectly.
CONC 7.9.1RRP
A firm must ensure that a person contacting a customer on its behalf explains to the customer the following matters:(1) who the person contacting the customer works for;(2) the person's role in or relationship with the firm; and(3) the purpose of the contact.[Note: paragraph 3.3c of DCG]
CONC 7.9.2RRP
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]
CONC 7.9.3GRP
(1) An example of a misleading communication in CONC 7.9.2 R is a calling card left at the customer's address which states or implies that the customer has missed a delivery and encourages the customer to make contact.[Note: paragraph 3.3d (box) of DCG](2) The clear fair and not misleading rule in CONC 3.3.1 R also applies to a firm in relation to a communication with a customer in relation to credit agreement1 or a consumer hire agreement.
CONC 7.9.4RRP
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]
CONC 7.9.5RRP
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]
CONC 7.9.7RRP
When contacting a customer:(1) a firm must ensure that it does not act in a way likely to be publicly embarrassing to the customer; and(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].
CONC 7.9.8GRP
The reasonable steps required by CONC 7.9.7 R may, for example, require a firm to ensure that:(1) post sent by the firm is properly addressed to the customer and marked “private and confidential” or an expression to the same effect;(2) where the firm has a name which indicates its debt collection activities, its name is not shown so that third parties may see the name on the firm's communications.
CONC 7.9.9GRP
CONC 7.9.7 R would not preclude a firm sending a statutory notice to a customer's last known address, where it takes reasonable steps including those referred to in CONC 7.9.8 G.
CONC 7.9.11GRP
A firm which:(1) threatens debt recovery action against the “occupier” of particular premises; or(2) sends a payment demand to all persons sharing the same name and date of birth or address as the customer;is likely to contravene CONC 7.9.10 R.[Note: paragraphs 3.9a (box) and 3.9b (box) of DCG]
CONC 7.9.13GRP
Failure to explain the purpose and intended outcome of a proposed initial visit to the customer or2 to give adequate notice prior to a proposed2 initial visit to the customer may not contravene CONC 7.9.12 R, provided that2 the customer is happy to speak to the person pursuing recovery of the debt at that time. However, where, at the initial visit the customer indicates a preference to use the first visit to agree a more convenient time for a future visit, the person pursuing
CONC 7.9.14RRP
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) act in a threatening manner towards a customer;(2) visit a customer at a time when they know or suspect that the customer is, or may be, particularly vulnerable;(3) visit at an inappropriate location unless the customer has expressly consented to the visit;(4) enter a customer's property without the customer's consent or
CONC 7.9.15GRP
It would normally be inappropriate to visit a customer at the customer place of work or at a hospital where the customer is a patient.
MCOB 9.7.2RRP
A firm that enters into a lifetime mortgage1 with a customer where interest payments are required (whether or not they will be collected by deduction from the income from an annuity or other linked investment product) must provide the customer with the following information before the customer makes the first payment under the contract:1(1) the amount of the first payment required;(2) the amount of the subsequent payments;(3) the method by which the payments will be collected
MCOB 9.7.4RRP
A firm that enters into a lifetime mortgage1 which is a drawdown mortgage, with fixed payments to the customer, must provide the customer with the following information before the first payment is drawn down by the customer:1(1) the amount of the first payment to be made;(2) the amount of subsequent payments, if different; (3) the method by which the payment will be made (for example, by transfer to the customer's bank account) and the date of issue of the first and subsequent
MCOB 9.7.5RRP
The information in MCOB 9.7.4 R must be provided to the customer in a single communication, except (4), (5) and (6) which may be provided separately.
MCOB 9.7.6RRP
Where the lifetime mortgage1 is a drawdown mortgage and the customer can choose the amount and frequency of the payments they receive, or the amount and frequency of payments can vary for other reasons (for example in line with interest rates) the firm must provide the customer with the following information before the first payment is drawn down by the customer:1(1) (a) where the customer can choose the amount and frequency of the payments they receive, details of any limitations
MCOB 9.7.7RRP
The information in MCOB 9.7.6 R must be provided to the customer in a single communication, except (3), (4) and (5) which may be provided separately
MCOB 9.7.8RRP
Where thelifetime mortgage1 provides for a lump sum payment to be made to the customer, and all or part of the interest will be rolled up during the life of the mortgage, the firm must provide the customer with the following information before the customer makes the first payment under the contract, or if no payments are required from the customer, within seven days of completion of the mortgage:1(1) if no payments are required from the customer, confirmation that no payments
MCOB 9.7.9RRP
The information in MCOB 9.7.8 R must be provided to the customer in a single communication, except (3) (4) and (5) which may be provided separately
MCOB 9.7.10RRP
(1) A firm must make and retain an adequate record of the information that it provides to each customer at the start of the lifetime mortgage1 in accordance with this section.1(2) The record required by (1) must be maintained for a year from the date that the information is provided to the customer.
MCOB 5.4.3RRP
A mortgage intermediary must take reasonable steps to ensure that an illustration which it issues, or which is issued on its behalf, other than that provided by a mortgage lender:(1) is accurate within the following tolerances:(a) no more than one percent or £1, whichever is the greater, below the actual figures charged by the mortgage lender for the following:(i) the total amount payable in Section 5 of the illustration;(ii) the amount payable for every £1 borrowed in Section
MCOB 5.4.6GRP
It is the responsibility of a mortgage intermediary to ensure compliance with MCOB 5.4.3 R. However, where a firm can show that it was reasonable for it to rely on information provided to it by another person, other than the mortgage lender, that an illustration was within the tolerances described in MCOB 5.4.3 R, he may be able to rely on MCOB 2.5.2 R, if this turns out not to be the case.
MCOB 5.4.8RRP
A firm must not issue an illustration to a customer for a regulated mortgage contract for which the customer is clearly ineligible on the basis of the information that the firm has obtained from the customer or the mortgage lender's lending criteria.
MCOB 5.4.16GRP
3MCOB 53 places no restrictions on the provision of information that is not specific to the amount the customer wants to borrow, for example, marketing literature including generic mortgage repayment tables or graphs illustrating the benefits of making a regular overpayment on a flexible mortgage. Such literature may, however, constitute a financial promotion2 and be subject to the provisions of MCOB 3 (Financial promotion).2
MCOB 5.4.19RRP
A firm must make an adequate record of each illustration that it issues to a customer in accordance with MCOB 5.5.1 R where the customer applies for that particular regulated mortgage contract.
MCOB 5.4.21GRP
MCOB 5.4.19 R does not require a firm to keep records of illustrations that are issued to a customer where the customer does not apply to enter into that particular regulated mortgage contract.
MCOB 5.4.22GRP
The record maintained in accordance with MCOB 5.4.19 R should contain or refer to matters such as:(1) the date on which the illustration was provided to the customer;(2) the date of the application made by the customer; and(3) details of the medium through which the illustration was provided.
CONC 3.7.1RRP
This section applies to a financial promotion or a communication with a customer in relation to credit broking in relation to a regulated credit agreement.
CONC 3.7.2RRP
CONC 3.7.4 G also applies to a financial promotion or a communication with a customer in relation to the activities specified in article 36A(1)(a) or (c) of the Regulated Activities Order in relation to a credit agreement that would be a regulated credit agreement but for the relevant provisions.
CONC 3.7.4GRP
A firm should in a financial promotion or in a communication with a customer:(1) make clear, to the extent an average customer of the firm would understand, the nature of the service that the firm provides; [Note: paragraphs 3.7e and 4.8b of CBG](2) indicate to the customer in a prominent way the existence of any financial arrangements with a lender that might impact upon the firm's impartiality in promoting a credit1 product to a customer;[Note: paragraphs 2.2, 6th bullet and
ICOBS 3.1.6RRP
When a firm makes a voice telephony communication to a consumer, it must make its identity and the purpose of its call explicitly clear at the beginning of the conversation.[Note: article 3(3)(a) of the Distance Marketing Directive]
ICOBS 3.1.7RRP
A firm must ensure that the information on contractual obligations to be communicated to a consumer during the pre-contractual phase is in conformity with the contractual obligations which would result from the law presumed to be applicable to the distance contract if that contract is concluded.[Note: article 3(4) of the Distance Marketing Directive]
ICOBS 3.1.8RRP
A firm must communicate to the consumer all the contractual terms and conditions and the information referred to in the distance marketing disclosure rules in writing or another durable medium available and accessible to the consumer in good time before conclusion of any distance contract.[Note: article 5(1) of the Distance Marketing Directive]
ICOBS 3.1.9GRP
A firm will provide or communicate information or contractual terms and conditions to a consumer if another person provides or communicates it to the consumer on its behalf.
ICOBS 3.1.14RRP
(1) In the case of a voice telephony communication, and subject to the explicit consent of the consumer, only the abbreviated distance marketing information (ICOBS 3 Annex 3 R) needs to be provided during that communication.(2) However, unless another exemption applies (such as the exemption for means of distance communication not enabling disclosure) a firm must still provide the distance marketing information (ICOBS 3 Annex 2 R) in writing or another durable medium available
CONC 2.7.4RRP
When a firm makes a voice telephony communication to a consumer, it must make its identity and the purposes of its call explicitly clear at the beginning of the conversation. [Note: regulation 7(4) of SI 2004/2095][Note: article 3(3)(a) of the Distance Marketing Directive]
CONC 2.7.7GRP
(1) Activities in relation to a consumer hire agreement are not financial services within the meaning of the Distance Marketing Directive and do not fall within CONC 2.7. Instead such agreements fall within the Consumer Protection (Distance Selling) Regulations 2000 (SI 2000/2334).(2) A firm will provide information, or communicate contractual terms and conditions, to a consumer if another person provides the information, or communicates the terms and conditions, to the consumer
CONC 2.7.11RRP
In the case of voice telephony communication, and subject to the explicit consent of the consumer, only the abbreviated distance marketing information (CONC 2 Annex 2R) needs to be provided during that communication. However, unless another exception applies (such as the exemption for means of distance communication not enabling disclosure), a firm must still provide the distance marketing information (CONC 2 Annex 1R) in a durable medium that is available and accessible to the
CONC 2.7.12RRP
A firm may provide the distance marketing information (CONC 2 Annex 1R) and the contractual terms and conditions in a durable medium immediately after the conclusion of a distance contract, if the contract has been concluded at a consumer's request using a means of distance communication that does not enable the provision of that information in that form in good time before the consumer is bound by any distance contract or offer.[Note: article 5(2) of the Distance Marketing
CONC 2.7.13GRP
Where a distance contract covers both payment services and non-payment services, the exception in CONC 2.7.2R (2) applies only to the payment services aspects of the contract. A firm taking advantage of this exception will need to comply with the information requirements in Part 5 of the Payment Services Regulations.
CONC 2.7.15RRP
(1) A firm must not enforce, or seek to enforce, any obligations under a distance contract against a consumer in the event of an unsolicited supply of services. The absence of a reply does not constitute consent.(2) This rule does not apply to the tacit renewal of a distance contract.[Note: regulation 15 of SI 2004/2095][Note: article 9 of the Distance Marketing Directive]
CONC 3.9.1RRP
This section applies to a financial promotion or a communication with a customer in relation to debt counselling and to debt adjusting.
CONC 3.9.2GRP
(1) The clear, fair and not misleading rule in CONC 3.3.1 R applies to a communication with a customer or the communication or approval for1communication of a financial promotion in relation to debt counselling or debt adjusting and in relation to a communication with a customer in relation to providing credit information services. (2) In the light of the complexity of debt counselling, it is unlikely that media which provide restricted space for messages would be a suitable means
CONC 3.9.3RRP
A firm must ensure that a financial promotion or a communication with a customer (to the extent a previous communication to the same customer has not included the following information) includes:(1) a statement of the services the firm offers;(2) a statement of any relationship with a business associate which is relevant to the services offered in the promotion; [Note: paragraph 2.5a of DMG](3) a statement setting out the level of fees charged for the firm's services, how they
CONC 3.9.5RRP
A financial promotion or a communication with a customer by a firm must not:(1) falsely claim or imply that the help and debt advice is provided on a free, impartial or independent basis, where the firm has a profit-seeking motive; [Note: paragraph 3.18b of DMG](2) falsely claim in any way that the firm is, or represents, a charitable or not-for-profit body or government or local government organisation; [Note: paragraph 3.18c of DMG](3) promote a claims management service (within
COBS 12.2.1RRP
This section applies to a firm which produces, or arranges for the production of, investment research that is intended or likely to be subsequently disseminated to clients of the firm or to the public, under its own responsibility or that of a member of its group. [Note: article 25(1) of the MiFID implementing Directive]
COBS 12.2.2GRP
The concept of dissemination of investment research to clients or to the public is not intended to include dissemination exclusively to persons within the group of the firm. [Note: recital 33 of the MiFID implementing Directive]
COBS 12.2.4GRP
Persons whose responsibilities or business interests may reasonably be considered to conflict with the interests of the persons to whom investment research is disseminated include corporate finance personnel and persons involved in sales and trading on behalf of clients or the firm. [Note: recital 30 of the MiFID implementing Directive]
COBS 12.2.6GRP
Knowledge by a financial analyst or other relevant person that the firm intends to produce or disseminate investment research to its clients or to the public (including in circumstances where research material has not yet been written) could constitute knowledge of the likely timing and content of investment research under COBS 12.2.5 R (1).
COBS 12.2.10RRP
A firm which disseminates investment research produced by another person to the public or to clients is exempt from complying with the requirements in COBS 12.2.3 R and COBS 12.2.5 R if the following criteria are met:(1) the person that produces the investment research is not a member of the group to which the firm belongs;(2) the firm does not substantially alter the recommendations within the investment research;(3) the firm does not present the investment research as having
COBS 12.2.13GRP
The FCA considers that the significant conflicts of interest which could arise are likely to mean it is inappropriate for a financial analyst or other relevant person to prepare investment research which is intended firstly for internal use for the firm's own advantage, and then for later publication to its clients (in circumstances in which it might reasonably be expected to have a material influence on its clients' investment decisions).
CONC 7.14.6RRP
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) pass the information provided by the customer to the lender or the owner; or[Note: paragraph 3.23h of DCG](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.
CONC 7.14.9RRP
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]
CONC 7.14.10RRP
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 customer into increasing the offer.[Note: annex A5 of DCG]
CONC 7.14.11GRP
Examples of conduct that may contravene CONC 7.14.10 R would, depending on the circumstances, include where following an unacceptable offer a firm immediately:(1) sends field agents to visit the customer or communicates to the customer that it will do so;[Note: annex A5 (box) to DCG](2) substantially increases the rate of interest or imposes a substantial charge or communicates that is will do either of those things.
CONC 7.14.14RRP
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]
MCOB 9.8.1RRP
The statement required by MCOB 7.5.1 R must contain the following information:(1) except in the case of mortgage credit cards, information on the type oflifetime mortgage,3 (for example, fixed rate or variable rate) including a clear statement of how the firm expects the capital, or capital and interest (whichever is applicable) to be repaid (for example, from the proceeds of the sale of the property);3(2) details of the following transactions and information on the lifetime
MCOB 9.8.2RRP
Where a firm provides a customer with a statement containing the information set out in MCOB 9.8.1 R(2) more frequently than once a year, the information set out in MCOB 9.8.1 R(1), MCOB 9.8.1 R(3) and MCOB 9.8.1 R(4) may be provided in a separate communication, but must be provided at least once a year.
MCOB 9.8.3RRP
A firm must give the customer reasonable notice, in advance, of any of the following:(1) any changes to the payments that the customer is required to make (where payments are required, and whether or not they are collected by deduction from the income provided by a linked investment product such as annuity) resulting from interest rate changes;(2) the exercising of the firm's right (if allowed by the terms of the lifetime mortgage3 ) to enter the property to carry out essential
MCOB 9.8.9RRP
If a customer requests, or agrees to, a change to a lifetime mortgage3 (other than a change as described in MCOB 7.6.7 R to MCOB 7.6.27 R (as modified by MCOB 9)) that changes the amount of each payment due (where payments are required), a firm must provide the customer with the following information, in a single communication, before the change takes effect:3(1) the amount outstanding on the lifetime mortgage3 at the date the change is requested;3(2) the payment due and the frequency
MCOB 9.8.10RRP
If a customer requests, or agrees to, a change to a lifetime mortgage.3(other than a change as described in MCOB 7.6.7 R to MCOB 7.6.27 R (as modified by MCOB 9)) that changes the amount paid to the customer under a drawdown mortgage, or the amount that the customer will owe under a roll-up of interest mortgage, or both, a firm must provide the customer with the following information, in a single communication, before the change takes effect:3(1) the amount outstanding on the
COBS 4.5.1RRP
(1) Subject to (2) and (3), this section applies to a firm in relation to:(a) the provision of information in relation to its designated investment business; and(b) the communication or approval of a financial promotion;where such information or financial promotion is addressed to, or disseminated in such a way that it is likely to be received by, a retail client.(2) If3 a communication relates to a firm's3MiFID or equivalent third country business, this section does not apply:3(a)
COBS 4.5.3GRP
The name of the firm may be a trading name or shortened version of the legal name of the firm, provided the retail client can identify the firm communicating the information.
COBS 4.5.4GRP
In deciding whether, and how, to communicate information to a particular target audience, a firm should take into account the nature of the product or business, the risks involved, the client's commitment, the likely information needs of the average recipient, and the role of the information in the sales process.
COBS 4.5.5GRP
When communicating information, a firm should consider whether omission of any relevant fact will result in information being insufficient, unclear, unfair or misleading.
CONC 3.3.1RRP
(1) A firm must ensure that a communication or a financial promotion is clear, fair, and not misleading. [Note: paragraphs 2.2 of ILG, 3.16 of DMG and 3.1 of CBG](2) If, for a particular communication or financial promotion, a firm takes reasonable steps to ensure it complies with (1), a contravention does not give rise to a right of action under section 138D of the Act.
CONC 3.3.2RRP
A firm must ensure that a communication or a financial promotion:(1) uses plain and intelligible language;(2) is easily legible (or, in the case of any information given orally, clearly audible);(3) specifies the name of the person making the communication or communicating the financial promotion or the person on whose behalf the financial promotion is made; and(4) in the case of a communication or financial promotion in relation to credit broking, indicates to the customer the
CONC 3.3.3RRP
A firm must not in a financial promotion or a communication to a customer suggest or state, expressly or by implication, that credit is available regardless of the customer's financial circumstances or status.[Note: paragraphs 3.7o of CBG and 5.2 of ILG]
CONC 3.3.6GRP
If a communication or a financial promotion names the FCA, PRA or both as the regulator of a firm and refers to matters not regulated by the FCA, PRA or both, the firm should ensure that the communication or financial promotion makes clear that those matters are not regulated by the FCA, PRA or both.
CONC 3.3.7GRP
When communicating information, a firm should consider whether omission of any relevant fact will result in information given to the customer being insufficient, unclear, unfair or misleading.
CONC 3.3.9GRP
A firm should in a financial promotion or other communication which includes a premium rate telephone number indicate in a prominent way the likely total cost of a premium rate call including the price per minute of a call, the likely duration of calls and the total cost a customer would incur if the customer calls for the full estimated duration.[Note: paragraphs 3.9h of CBG and 3.18x (box) of DMG]
COBS 4.1.1RRP
1This chapter applies to a firm:(1) communicating with a client in relation to its designated investment business;(2) communicating or approving a financial promotion other than:(a) a financial promotion of qualifying credit, a home purchase plan or a home reversion plan; or(b) a financial promotion in respect of a non-investment insurance contract; or(c) a promotion of an unregulated collective investment scheme that would breach section 238(1) of the Act if made by an authorised
COBS 4.1.5GRP
(1) A firm communicating with an eligible counterparty2 should have regard to the application of COBS to eligible counterparty business (COBS 1 Annex 1 Part 1).(2) This chapter does not apply in relation to communicating with an eligible counterparty other than the section on compensation information (see COBS 4.4) 2but elements of the requirements in PRIN may apply.
COBS 4.1.8RRP
(1) In relation to communications by a firm to a client in relation to its designated investment business this chapter applies in accordance with the general application rule and the rule on business with UKclients from an overseas establishment (COBS 1 Annex 1 Part 2 paragraph 2.1R).(2) In addition, the financial promotion rules apply to a firm in relation to:(a) the communication of a financial promotion to a person inside the United Kingdom;(b) the communication of a cold call
COBS 4.1.9GRP
(1) The EEA territorial scope rule modifies the general territorial scope of the rules in this chapter to the extent necessary to be compatible with European law. This means that in a number of cases, the rules in this chapter will apply to communications made by UK firms to persons located outside the United Kingdom and will not apply to communications made to persons inside the United Kingdom by EEA firms. Further guidance on this is located in COBS 1 Annex 1.(2) One effect
COBS 4.1.10GRP
Firms should note the territorial scope of this chapter is also affected by:(1) the disapplication for financial promotions originating outside the United Kingdom that are not capable of having an effect within the United Kingdom (section 21(3) of the Act (Restrictions on financial promotion)) (see the defined term “excluded communication”);(2) the exemptions for overseas communicators (see the defined term “excluded communication”); and(3) the rules on financial promotions with
CASS 5.5.48RRP
If a client has notified a firm in writing that he does not wish his money to be held with a bank in the same group as the firm, the firm must either:(1) place that client money in a client bank account with another bank in accordance with CASS 5.5.38 R; or(2) return that client money to, or pay it to the order of, the client.
CASS 5.5.51RRP
In the case of a client bank account outside the United Kingdom, if the bank does not provide the acknowledgement referred to in CASS 5.5.49 R within 20 business days after the firm dispatched the notice, the firm must notify the client of this fact as set out in CASS 5.5.53 R.
CASS 5.5.53RRP
A firm must not hold, for a consumer5, client money in a client bank account outside the United Kingdom, unless the firm has previously disclosed to the consumer5 (whether in its terms of business, client agreement11 or otherwise in writing):5511(1) that his money may be deposited in a client bank account outside the United Kingdom but that the client may notify the firm that he does not wish his money to be held in a particular jurisdiction;(2) that in such circumstances, the
CASS 5.5.54GRP
There is no need for a firm to make a separate disclosure under CASS 5.5.53 R (1) and CASS 5.5.53 R (2) in relation to each jurisdiction.
CASS 5.5.55GRP
Firms are reminded of the provisions of CASS 5.5.41 R (4), which sets out the notification and consents required when using a bank that is not an approved bank.
CASS 5.5.56RRP
If a client has notified a firm in writing before entering into a transaction that client money is not to be held in a particular jurisdiction, the firm must either:(1) hold the client money in a client bank account in a jurisdiction to which the client has not objected; or(2) return the client money to, or to the order of, the client.
CASS 5.5.57GRP
Firms are reminded of the provisions of CASS 5.5.41 R (4), which sets out the notification and consents required when using a bank that is not an approved bank.
CONC 3.2.1GRP
The rules in this chapter adopt various concepts from the restriction on financial promotions by unauthorised persons in section 21(1) of the Act (Restrictions on financial promotion). Guidance on that restriction and the communications which are exempt from it is contained in PERG 8 (Financial promotion and related activities) and that guidance will be relevant to interpreting these rules. In particular, guidance on the meaning of:(1) 'communicate' is in PERG 8.6 (Communicate);
CONC 3.2.2GRP
The Privacy and Electronic Communications (EC Directive) Regulations 2003 apply to unsolicited telephone calls, fax messages and electronic mail messages for direct marketing purposes. The Information Commissioner’s Office has produced guidance on the Regulations.
COBS 10.3.1RRP
(1) If a firm considers, on the basis of the information received to enable it to assess appropriateness, that the product or service is not appropriate to the client, the firm must warn the client.(2) This warning may be provided in a standardised format. [Note: article 19(5) of MiFID]
COBS 10.3.2RRP
(1) If the client elects not to provide the information to enable the firm to assess appropriateness, or if he provides insufficient information regarding his knowledge and experience, the firm must warn the client that such a decision will not allow the firm to determine whether the service or product envisaged is appropriate for him.(2) This warning may be provided in a standardised format. [Note: article 19(5) of MiFID]
COBS 10.3.3GRP
If a client asks a firm to go ahead with a transaction, despite being given a warning by the firm, it is for the firm to consider whether to do so having regard to the circumstances.
MCOB 13.3.1ARRP
(1) 4Where a customer has a payment shortfall in relation to a regulated mortgage contract or home purchase plan, a firm must not attempt to process more than two direct debit requests in any one calendar month.(2) Where a firm’s direct debit request, in respect of a customer who has a payment shortfall on a regulated mortgage contract or home purchase plan, has been refused, on at least one occasion in each of two consecutive months, due to insufficient funds, the firm must:(a)
MCOB 13.3.1BGRP
4MCOB 13.3.1AR (2)(c) does not prevent a firm from attempting to process up to two direct debit requests in any one calendar month provided the firm has made reasonable efforts to contact the customer and the customer has failed to respond.
MCOB 13.3.9RRP
(1) A mortgage lender or administrator1must make and retain an adequate record of its dealings with a customer whose account has a payment shortfall or 4 a sale shortfall1, which will enable the firm to show its compliance with this chapter1. That record must include a recording of all telephone conversations between the firm and the customer which discuss any amount in arrears or any amount subject to payment shortfall charges4.314114(2) A mortgage lender or administrator1must
MCOB 13.3.10GRP
The record referred to in MCOB 13.3.9 R should contain, or provide reference to, matters such as:(1) the date of first communication with the customer after the account was identified as having a payment shortfall;44(2) in relation to correspondence issued to a customer with a payment shortfall4, the name and contact number of the employee dealing with that correspondence, where known;4(3) the basis for issuing tailored information in accordance with MCOB 13.7.1 R in relation
CONC 7.11.1RRP
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 ]
CONC 7.11.2GRP
For example, a person misrepresents authority or the legal position if they claim to work on instructions from the courts as bailiffs or, in Scotland, sheriff officers or messengers-at-arms, or in Northern Ireland, to work on instructions from the Enforcement of Judgements Office when this is untrue.[Note: paragraph 3.5a of DCG ]
CONC 7.11.3RRP
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 ]