Cost Cap for High-Cost Short-Term Credit and Reference Agencies | Mortgage Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

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Credit Reference Agencies

[Delete this section if it does not apply to you]

The company understands that as a credit reference agency, it has an obligation under the regulatory system to keep accurate and up-to-date records and databases with regards to information held about individuals.

The company understands that within 10 working days after any of the following events: –

• the company giving notice under section 159(2) of the CCA that it has removed an entry from the file kept by it about an individual or has amended such an entry
• the company giving notice under section 159(4) of the CCA that it has received a notice under section 159(3) requiring it to add a notice of correction to the file and intends to comply with the notice
• the expiry of the period specified in an order of the FCA or the Information Commissioner under section 159(5) of the CCA as the period within which the order is to be complied with

The company must give notice of the particulars specified below to each person to whom at any time since the relevant date it has furnished information relevant to the financial standing of the individual concerned.

The particulars referred to above are: –

• in relation to information included in any entry which has been removed or amended or which is referred to in a notice of correction
  • particulars of any entry which has been removed from the file and a statement that it has been removed
  • particulars of any entry which has been amended and of the amendment, or of the entry as amended
  • particulars of the entry, together with a copy of the notice of correction; and
• where the information did not include the entry, which has been removed or amended or which is referred to in a notice of correction, but which (whether in the form of a rating or opinion or otherwise) was based in whole or in part on any such entry and has been, or falls to be, modified by reason of the removal, amendment or notice:
  • particulars of the modified information; and
  • a statement that the information has been modified by reason of the removal, amendment or notice, as the case may be.

21.23.1 Cost Cap for High-Cost Short-Term Credit

[Delete this section if CONC 5A is not applicable to your firm]

the company confirms that any agreements for high-cost short-term credit that we entered into on or after the 2nd January 2015, comply with the regulatory rules and requirements as set out in CONC 5A of the FCA Handbook.

The company are committed to protecting our borrowers from excessive charges and high interest applications. Examples of the types of charges that we limit and comply with the regulatory requirements on include (but are not limited to): –

• interest on the credit provided
• a charge related to late payment by, or default of, the borrower
• a charge related to the transmission of credit or for using a means of payment to or from the borrower
• a charge related to early repayment, or refinancing or changing the payment date or termination of the agreement
• a charge related to the application for, or drawing down of, credit
• a charge imposed by a credit broker in the same group or with whom the lender has arrangements to share the charge
• a charge for ancillary services related to the provision of credit

We confirm that we have procedures in place to ensure that all rules are complied with and our lending methods have been assessed and are continuously audited and reviewed to ensure continued compliance.

For the purposes of this manual section, the term ‘charges’ applies to added fees, interest, early repayment charges or general repayment charges,

The objectives and aims of the procedures and controls on our lending and subsequent charges are to ensure that: –

• Any charge or combination of charges applied to high-cost short-term credit do not exceed the amount of credit provided under the agreement
• Any charge or combination of charges applied to high-cost short-term credit do not exceed 0.8% of the amount of credit provided under the agreement, calculated per day from that date the borrower draws down on the credit
• We do not enter into an agreement for high-cost short-term credit which replaces an earlier agreement, where the replacement contains charges that together with the initial loan charges, exceed the amount of credit provided under the agreement
• We do not enter into an agreement for high-cost short-term credit, which provides for a charge, by way of interest, other than a charge by way of simple interest
• We do not instruct any other firm (DCA etc), to impose charges on the borrower which exceed the cost of the initial credit
• We do not impose charges in connection with an agreement breach, where those charges in connection with other charges imposed by the agreement, exceed or are capable of exceeding £15

The company understands that if it breaches any of the above objectives or the regulatory rules as set out in CONC 5A of the FCA handbook, in addition to the penalties applicable under the FCA regulatory system, any agreements with the borrower will be unenforceable or that the borrower may chose not to continue with the agreement, whereby any charges already paid to us must be refunded.

[Any specific procedures that you have in place for high-cost short-term lending must be added here]