Often Overlooked Key Areas of the Consumer Credit Sourcebook (CONC)
Although many of us feel confident we know the FCA’s Consumer Credit Sourcebook (CONC) inside and out, even I, as somebody who covers it continually, sometimes find new information that I hadn’t considered before.
Perhaps one of the reasons we struggle with CONC is the manner in which it’s written. Understandably the FCA write in a fairly legalistic style and continually reference to other sections of the handbook. While we understand the need for this to happen, it does slow our reading and can, sometimes, make us miss a key point. We’re busy creating a document which sets out the key provisions in CONC but written in ‘plain English’. Keep an eye-out for this on our Resources Section as it could save you countless hours of work!
That said, in this week's article, I wanted to point out some of my recent "discoveries" when reviewing CONC.
Generally speaking CONC covers the following areas:
a. Conduct of Business Standards
b. Financial Promotions and contact with customers
c. Pre-contractual requirements
d. Responsible Lending
e. Post-contractual requirements
f. Responsible recoveries
Whilst reviewing CONC, I’ve recently discovered that firms are not able to imply their service is “stress free”, whilst I was aware of most of the restricted expressions in adverts / financial promotions, this particular one had escaped my attention.
Additionally, let’s not forget that a credit check is no longer sufficient to assess a borrower’s position. Instead, firms now must also include a creditworthiness assessment analysing their monthly disposable income. With that, I hadn’t realised that firms are actually allowed to factor in the fact that customers may decide to make payments from their savings or from realising assets! This appears a little out of step with CONC 7!
Another key area is that persistent debt is defined as a customer who has paid more in interest and charges than they have paid towards the capital over an 18 month period and once this has occurred the firm is under an obligation to contact the customer to warn them of the potential implications and encourage them to discuss their financial arrangements.
Additionally, I often find clients struggling in a few key areas including understanding the full scope of the information which is required to be included in the distance marketing information, see CONC 2.7.2R and appendix.
Finally, don't forget that a document which sets out the key provisions in CONC but written in ‘plain English’ will be released soon. Sign up to Compliance Insights so that you'll be the first to know when it is available to download.