Consumer Credit Sourcebook CONC | Introduction and Guidance on Financial Difficulties | Mortgage Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

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Consumer Credit Sourcebook (CONC)

21.1 Introduction

The Consumer Credit Sourcebook (CONC) is a supplementary FCA handbook which sets out the requirements and guidance for firms who carry out credit-related regulated activities. This sourcebook and its contents are to be read and followed in addition to the main FCA Handbook.

The obligations set out in CONC, build on and add to the high-level obligations, for example, in PRIN, COND and SYSC, and the requirements in or under the CCA.

As a Consumer Credit regulated firm, the company has to comply with the requirements set out in CONC in addition to its other regulatory requirements, as laid out in this Compliance Manual and in the FCA Handbook. We confirm that all staff working for us (meaning permanent, fixed term, and temporary staff, any third-party representatives or sub-contractors, agency workers, volunteers, interns and agents engaged with the company in the UK or overseas), understand their obligations under CONC and we are committed to ensuring their and our compliance with these requirements at all times.

21.2 Guidance on Financial Difficulties

The company are committed to ensuring that we as a firm and all of our staff, agents and firms working on our behalf, we identify, assist and engage with individuals who are experiencing financial difficulties for whatever reason. We understand that financial difficulties can often be resolved by working with the customer and acting in a positive and resourceful manner and we have strict and robust procedures and training practices in this area that are consistently reviewed for compliance and effectiveness.

In CONC and MCOB 13.3.2, we have an obligation to understand what is defined as a customer being in financial difficulty and we use these key markers to monitor accounts and payment arrangements and to act as soon as possible to help a customer get back on track and reduce their financial burden.

We also use the below list prior to accepting a customer onto any form of loan or repayment plan during the credit background check. Where the below are identified on a customer’s check or are disclosed by the customer, we use additional checks and measures before deciding to proceed with an agreement or contract. This is done on a case by case basis and in accordance with our Responsible Lending Policy and Affordability Assessment Calculator.

We deem a customer to be potentially experiencing financial difficulties where: –

• They consecutively failing to meet minimum repayments in relation to a:
  • credit card
  • store card
  • mortgage payments
  • loan
  • hire purchase
  • household bills
• There are adverse accurate entries on a credit file, which are not in dispute
• There are outstanding county court judgments for non-payment of debt
• There are recent default notices on their credit file
• There is an inability to meet repayments out of disposable income or at all, for example:
  • where there is evidence of non-payment of essential bills (such as, utility bills)
  • the customer having to borrow further to repay existing debts
  • the customer only being able to meet repayments of debts by the disposal of assets or security
• The customer consecutively fails to meet repayments when due
• There is an agreement with a debt management plan or other debt solution
• There is evidence of discussions with a firm (including a not-for-profit debt advice body) with a view to entering into a debt management plan or other debt solution or to seeking debt counselling