CONC 7.20 Regulated deferred payment credit agreements: information about missed payments and giving notice before taking certain action

1. (1) This rule applies where a borrower has failed to make a payment by the time it has fallen due under the terms of a regulated deferred payment credit agreement (‘a missed payment’).
2. (2) As soon as possible after a missed payment has occurred the firm must:
   1. (a) notify the borrower:
      1. (i) that the missed payment has occurred; and
      2. (ii) about any sums which have become payable under the regulated deferred payment credit agreement but remain unpaid (including unpaid charges for non-compliance with the agreement); and
   2. (b) provide the borrower with sufficient information for the borrower to understand:
      1. (i) which regulated deferred payment credit agreement the missed payment relates to;
      2. (ii) any adverse consequences for the borrower arising out of the missed payment;
      3. (iii) any adverse consequences for the borrower that the firm considers are likely to arise out of the missed payment; and
      4. (iv) (where relevant) any steps the borrower can take to mitigate those adverse consequences.
3. (3) The information required under (2) must be provided together. 

4. (4) In this rule references to ‘payment’ refer to the repayment of capital but exclude payment of a charge for non-compliance with a regulated deferred payment credit agreement.

    

For the purposes of CONC 7.20.1R(2)(b)(ii), (iii) and (iv), the firm should consider in particular the circumstances in which: 

1. (1) the firm applies charges in respect of missed payments; and 

2. (2) the firm reports missed payments to a credit reference agency.

    

1. (1) Before a firm takes any of the actions specified in (2), it must give the borrower reasonable notice of its intention to do so.

2. (2) The actions mentioned in (1) are:

   1. (a) taking steps to enforce a term of a regulated deferred payment credit agreement by:
      1. (i) demanding the earlier payment of any sum;
      2. (ii) treating any right conferred on the borrower by the agreement as terminated, restricted or deferred; or
      3. (iii) enforcing any security; 
   2. (b) terminating a regulated deferred payment credit agreement.

   (3) If any of the actions mentioned in (2) are conditional on whether the borrower takes steps in response to notice given by the firm, the firm must explain that to the borrower when giving notice by setting out: 

   1. (a) the steps that the borrower is required to take; and
   2. (b) the date by which such steps must be taken.

   (4) Where a firm intends to take any of the actions specified in (2) and the borrower is in arrears, the firm must when giving notice in accordance with (1):

   1. (a) inform the borrower that free and impartial money guidance and debt advice is available from not-for-profit debt advice bodies and can be accessed through a range of delivery channels, including digital tools; and
   2. (b) effectively communicate to the borrower the potential benefits of accessing money guidance or free and impartial debt advice from not-for-profit debt advice bodies.

   [Note: see section 129(1) of the CCA.]