Related provisions for CONC App 1.1.13
41 - 60 of 164 items.
(1) In relation to debt collecting and debt administration, the definition of customer refers to an individual from whom the payment of a debt is sought; this would include where a firm mistakenly treats an individual as the borrower under an agreement and mistakenly or wrongly pursues the individual for a debt.[Note: paragraph 1.12 of DCG](2) In relation to debt collecting and debt administration, the definitions of customer and borrower are given extended meanings to include,
Where a customer under a regulated credit agreement fails to make an occasional payment when it becomes due, a firm should, in accordance with Principle 6, allow for such unmade payments to be made within the original term of the agreement unless:(1) the firm reasonably believes that it is appropriate to allow a longer period for repayment and has no reason to believe that doing so will increase the total amount payable to be unsustainable or otherwise cause a customer to be in
Firms seeking to recover debts under regulated credit agreements secured on land in England and Wales should have regard to the requirements of the relevant pre-action protocol (PAP) issued by the Civil Justice Council. The aims of the PAP are to ensure that a firm and a customer act fairly and reasonably with each other in resolving any matter concerning arrears, and to encourage more pre-action contact in an effort to seek agreement between the parties on alternatives to repossession.
Where a firm takes on responsibility for giving information to a customer or receiving information from a customer in accordance with provisions of the CCA (for example, supplying a copy of an executed regulated credit agreement under section 61A of the CCA) the firm should ensure it is familiar with the relevant statutory requirements and has adequate system and procedures in place to comply with the provision in question.
(1) Under section 155 of the CCA an individual has a right to a refund of the firm's fee (less £5) (or for that fee not to be payable) where the individual has not entered into an agreement to which section 155 applies within six months of an introduction:5(a) to a source of credit or of bailment (or in Scotland of hire); or5(b) to another firm that carries on credit broking of the kind specified in article 36A(1)(a) to (c) of the RAO disregarding the effect of paragraph (2) of
3If a customer has not entered into an agreement referred to in section 155(2) of the CCA within six months of the customer being introduced by the firm to a potential source of credit or of bailment (or in Scotland of hire), or to another firm that carries on credit broking of the kind specified in article 36A(1)(a) to (c) of the RAO (disregarding the effect of paragraph (2) of that article)5, as soon as reasonably practicable after the expiry of that six-month period a firm
(1) A variation or supplement of, or an exercise of a contractual power to vary or supplement, an agreement for high-cost short-term credit made before 2 January 2015 will be covered by this chapter if it has the result that a new charge, or an increase in an existing charge, is payable. (2) An example of where a charge results from a variation or supplement is where the duration of an agreement made before 2 January 2015 is extended and a further charge by way of interest or
Section 137C of the Act (FCA general rules: cost of credit and duration of credit agreements) as amended by the Financial Services (Banking Reform) Act 2013, places a duty on the FCA to make general rules with a view to securing an appropriate degree of protection for borrowers against excessive charges.
In accordance with that duty, the purpose of this chapter is:(1) to specify the descriptions of regulated credit agreement appearing to the FCA to involve the provision of high-cost short-term credit to which this chapter applies by using the definition of high-cost short-term credit set out in the Glossary;(2) to secure an appropriate degree of protection for borrowers against excessive charges; and (3) as a result, to restrict the charges for such high-cost short-term credi
(1) 4Under paragraph 54A(1) of the Schedule to the Exemption Order, a person who serves, or takes steps to serve, a document on a borrower or a hirer for the purposes of legal proceedings, including arbitration and insolvency proceedings, brought or to be brought for the payment of a debt due under a credit agreement, a P2P agreement or a consumer hire agreement is exempted from debt collecting, as long as the person:(a) is not the lender or owner under the agreement; and(b) does
(1) 4The exemption in paragraph 55 of the Schedule to the Exemption Order covers special purpose vehicles and other entities which are part of a structured finance transaction and which meet the specified conditions. It confers exemption from the general prohibition on a person (“P”) for the regulated activity of exercising, or having the right to exercise. the lender’s rights and duties under a regulated credit agreement (and associated regulated activities) where there is an
(1) 3This chapter does not apply to an MCD lifetime mortgage, except as set out in (2) to (3), below.(2) MCOB 9.4.33 R, MCOB 9.4.35 R, MCOB 9.4.62 R and MCOB 9.4.63 R apply to the extent specified by MCOB 5A.6.2 R.(3) MCOB 9.6 to MCOB 9.8 apply, except for rules that modify or replace MCOB 7.6.7R to MCOB 7.6.17R (because those rules do not apply to an MCD mortgage lender or an MCD mortgage credit intermediary, MCOB 7B applies instead: see MCOB 7.1.2AR and MCOB 7.1.2BG).
This chapter, unless a rule in CONC 3 specifies differently, applies to:(1) a communication with a customer in relation to a credit agreement;(2) the communication or approval for communication of a financial promotion in relation to a credit agreement;(3) a communication with a customer in relation to credit broking;(4) the communication or approval for communication of a financial promotion in relation to credit broking;(5) a communication with a borrower or a prospective borrower
CONC 3 does not apply to:(1) a financial promotion or a communication which expressly or by implication indicates clearly that it is solely promoting credit agreements or consumer hire agreements or P2P agreements for the purposes in each case of a customer's business;(2) a financial promotion or a communication to the extent that it relates to qualifying credit; or(3) an excluded communication.
This chapter applies to a firm in relation to:(1) a communication with, or the communication or approval for communication of a financial promotion to, a person in the UK;(2) the communication of an unsolicited real time financial promotion, unless it is made from a place, and for the purposes of a business which is only carried on, outside the UK; and(3) the communication or approval for communication of a financial promotion that is an electronic commerce communication to a
2When a firm assesses whether a shared equity credit agreement is appropriate to the needs and circumstances of the customer for the purposes of MCOB 4.7A.5R (1) it must consider, in addition to the factors listed in MCOB 4.7A.6 R, whether it is appropriate for the customer to: (1) take out the shared equity credit agreement for a particular term, taking into account the customer's intentions about the repayment of that shared equity credit agreement and the term of the customer's
In complying with MCOB 4.7A.5R (1) a firm is not required to consider whether it would be preferable for the customer to:(1) purchase a property by using his own resources, rather than by borrowing under a regulated mortgage contract (save for where the customer is seeking to enter into a shared equity credit agreement (see MCOB 4.7A.14AR (4);2 or(2) rent a property, rather than purchase one; or(3) delay entering into a regulated mortgage contract until a later date (on the grounds
(1) When a firm provides a quotation to a customer in connection with a prospective credit agreement which would or might be secured on the customer's home, the firm must include (or cause to be included) in the quotation a statement that such security would or might be required. [Note: regulation 3a of SI 1999/2725](2) When a firm provides a quotation to a customer (C) in connection with a prospective credit agreement which would or might be secured on C’s home under which, while
(1) When a firm provides a quotation to a customer in connection with a prospective credit agreement which would or might be secured on the customer's home, the firm must include (or cause to be included) in the quotation a statement that such security would or might be required.[Note: regulation 6 of SI 1999/2725](2) When a firm provides a quotation to a customer (C) in connection with a prospective credit agreement which would or might be secured on C’s home under which, while
(1) Paragraphs (2) to (5) apply to CONC 4.1.3 R and CONC 4.1.4 R (rules on content of quotations).(2) “Quotation” means any document by which a person gives a customer information about the terms on which the person or a lender or owner is prepared to do business, but it does not include:(a) a communication which is also a financial promotion;(b) any document given to a customer under section 58 of the CCA (opportunity for withdrawal from prospective land mortgage);(c) any document
(1) A firm must not exercise its rights under a continuous payment authority (or purport to do so):(a) unless it has been explained to the customer that the continuous payment authority would be used in the way in question; and(b) other than in accordance with the terms specified in the credit agreement or the P2P agreement.(2) If a firm wishes a customer to change the terms of a continuous payment authority it must contact the customer and:(a) provide the customer with an adequate
A firm should not:(1) request a payment service provider to make a payment from the customer's payment account1 unless:(a) (i) the amount of the payment (or the basis on which payments may be taken) is specified in or permitted by the credit agreement or P2P agreement; and(ii) the amount of the payment (or the basis on which payments may be taken) was referred to in the adequate explanation required by CONC 4.6.2 R; or(b) the firm has complied in relation to such a request with
(1) 2This rule applies where the terms of a regulated credit agreement or a P2P agreement do not provide for a continuous payment authority and it is proposed that a customer will grant a continuous payment authority to:(a) a lender or a person who has permission to carry on the activity of operating an electronic system in relation to lending; or(b) a debt collector¸ provided that the debt collector is acting under an arrangement with the lender or the person who has permission
(1) 2Where a regulated credit agreement or a P2P agreement does not incorporate the terms of a continuous payment authority, CONC 7.6.2AR enables a continuous payment authority to be put in place (for example, for a repayment plan) without necessarily requiring an amendment to the agreement. But CONC 7.6.2AR applies only where the customer is in arrears or default, and the creation of the continuous payment authority supports the fair treatment of the customer and facilitates
Except as provided for in CONC 11.1.2 R or where PROF 5.4.1 R (1) or PROF 5.4.1 R (2) applies, a consumer has a right to cancel a distance contract without penalty and without giving any reason, within 14 calendar days where that contract is:(1) a credit agreement;(2) an agreement between a consumer and a firm the subject matter of which comprises or relates to credit broking,1debt counselling, debt adjusting, providing credit information services or providing credit references,
(1) For a credit agreement there is no right to cancel under CONC 11.1.1 R, unless (2) or (3) applies, in respect of:(a) a regulated consumer credit agreement (within the meaning of that section) to which section 66A (right to withdraw) of the CCA applies;(b) a credit agreement under which a lender provides credit to a consumer and where the consumer's obligation to repay is secured by a legal mortgage on land;(c) a credit agreement cancelled under regulation 15(1) of the Consumer
Section 66A of the CCA (right to withdraw) does not apply to an agreement for credit exceeding £60,260 (unless the agreement is a residential renovation agreement)2, an agreement secured on land, a restricted-use credit agreement to finance the purchase of land or an agreement for a bridging loan in connection with the purchase of land. Section 67 of the CCA (cancellable agreements) applies to regulated credit agreements (apart from agreements secured on land, restricted-use credit
Article 28B (Real time communications: introductions) exempts a real time financial promotion that relates to one or more of the controlled activities about regulated mortgage contracts, as well as home reversion plans, home purchase plans,4regulated sale and rent back agreements3, certain consumer hire agreements and relevant credit agreements4. The exemption is subject to the following conditions being satisfied:224(1) the financial promotion must be made for the purpose of,
4Rights under a relevant credit agreement are also a controlled investment. A relevant credit agreement is a credit agreement other than a regulated mortgage contract or a regulated home purchase plan. Entering into a relevant credit agreement as lender, or exercising or having the rights to exercise the rights of the lender under such an agreement, is a controlled activity under paragraph 10BA of Schedule 1 to the Financial Promotion Order, except where the agreement is for the
4Guide to potential application of MCOB 3A5 and CONC 3 to financial promotion of credit. This table belongs to PERG 8.17.20 G.
5Subject of promotion |
5 | CONC 3 may apply |
|
(1) |
Yes |
No |
|
(2) |
credit agreements secured on land where the lender also enters into regulated mortgage contracts as lender |
Yes |
No |
(3) |
credit agreements not secured on land, whether or not the lender also enters into regulated mortgage contracts as lender |
No |
Yes |
(4) |
credit agreements secured on land where the lender does not enter into regulated mortgage contracts as lender |
No |
Yes |
(5) |
credit agreements partly secured on land that include some unsecured credit and where the lender enters into regulated mortgage contracts as lender |
Yes |
No |
(6) |
credit agreements with features as in (1), (2) or (5) promoted in combination with other unsecured credit agreements |
Yes |
Yes |
A default must be considered to have occurred with regard to a particular obligor when either or both of the two following events has taken place:(1) the firm considers that the obligor is unlikely to pay its credit obligations to the firm, the parent undertaking or any of its subsidiary undertakings in full, without recourse by the firm to actions such as realising security (if held); and(2) the obligor is past due more than 90 days on any material credit obligation to the firm,
The following provisions also apply with respect to the definition of default:(1) for overdrafts, days past due commence once an obligor has breached an advised limit, has been advised a limit smaller than current outstandings, or has drawn credit without authorisation and the underlying amount is material;(2) an advised limit means a limit which has been brought to the knowledge of the obligor;(3) days past due for credit cards commence on the minimum payment due date;(4) in
(1) Elements to be taken as indications of unlikeliness to pay must include the items set out in this rule.(2) The firm putting the credit obligation on non-accrued status must be taken as an indication of unlikeliness to pay.(3) The firm making a value adjustment resulting from a significant perceived decline in credit quality subsequent to the firm taking on the exposure must be taken as an indication of unlikeliness to pay.(4) The firm selling the credit obligation at a material
2Prior to 21 March 2016, the definition of ‘regulated mortgage contract’ in article 61(3)(a) of the Regulated Activities Order was limited to mortgage contracts secured by a first legal mortgage (but not a second charge mortgage or an equitable mortgage) of land in the United Kingdom (rather than land in the EEA), and the regulated activity of administering a regulated mortgage contract was limited to mortgage contracts entered into on or after 31 October 2004, being the date
(1) 2Mortgage contracts that potentially became regulated mortgage contracts on 21 March 2016 include, for example:(a) mortgages entered into before 31 October 2004;(b) second charge mortgages; and(c) equitable mortgages.(2) However: (a) a mortgage contract entered into before 21 March 2016, which was not already a regulated mortgage contract only became a regulated mortgage contract if it was a ‘consumer credit back book mortgage contract’ within the meaning of article 2 of
This chapter applies to anyone involved in publishing periodicals, or in providing news services or broadcasts, who gives (or proposes to give) advice about securities, structured deposits,4relevant investments, P2P agreements,4home finance transactions1or certain pension transfers or conversions4 and who wishes to determine whether he will be carrying on the regulated activities of advising on investments, advising on regulated credit agreements for the acquisition of land2 oradvising
The purpose of this chapter is to provide guidance as to:(1) when a person involved in publishing periodicals, or in providing news services or broadcasts, requires authorisation to carry on the regulated activities of advising on investments, advising on regulated credit agreements for the acquisition of land,4advising on a home finance transaction1or advising on conversion or transfer of pension benefits4 (see PERG 7.3 (Does the activity require authorisation));21(2) if he does,
(1) Failure to comply with CONC 6.5.2 R, which sets out when a firm must give notice to a customer where a regulated credit agreement has been assigned to a third party, will be taken into account by the FCA in taking decisions about a firm'spermission or about taking other action.[Note: paragraph 3.7g of DCG](2) CONC 6.5.2 R makes it clear that where arrangements for servicing the credit change at the time of the assignment of a regulated credit agreement, notice must be given
The obtaining, recording, holding and passing on of information about individuals for the purposes of tracing a customer and/or recovering a debt due under a credit agreement or a consumer hire agreement or a P2P agreement will involve the processing of personal data. Accordingly, firms processing such data are data controllers or data processors and are obliged to comply with data protection legislation2 and, in particular, to adhere to the 2data protection principles.[Note:
Where a firm has established that an individual being pursued for a debt is not the true borrower or hirer under the credit agreement, regulated credit agreement, consumer hire agreement or regulated consumer hire agreement or that the debt has been paid, the firm must update its records and the data supplied to the credit reference agencies (where applicable).[Note: paragraph 3.23f of DCG]
Where a firm applies for such permission, the FCA would expect the scope should be defined according to a range of characteristics, including the type of asset class and the structural features of the transaction. The characteristics the FCA would expect a firm to consider when scoping a permission application include:(1) asset class (eg, residential mortgages, commercial mortgages, credit card receivables, leasing, loans to corporates or small and medium-sized enterprises (SMEs),
The FCA will seek to ensure that the securitisation framework is not used to undermine or arbitrage other parts of the prudential framework. For other similar credit protection arrangements (eg, those subject credit risk mitigation or trading book requirements), the impact of certain features (such as significant premiums or call options) may cast doubt on the extent of risk transferred and the resulting capital assessment. Features which result in inadequate own funds requirements