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CONC 1.1 Application and purpose

Application

CONC 1.1.1 G RP
  1. (1)

    1The Consumer Credit sourcebook (CONC) is the specialist sourcebook for credit-related regulated activities.

  2. (2)

    CONC applies as described in this chapter, unless the application of a chapter, section or a rule is described differently in the chapters, sections or rules in CONC.

Purpose

CONC 1.1.2 G RP

The purpose of CONC is to set out the detailed obligations that are specific to credit-related regulated activities and activities connected to those activities carried on by firms. These build on and add to the high-level obligations, for example, in PRIN, GEN and SYSC, and the requirements in or under the CCA.

CONC 1.1.3 G RP

Firms are reminded that other parts of the FCA Handbook and PRA Handbook also apply to credit-related regulated activities. For example, the arrangements for supervising firms, including applicable reporting obligations, are described in the Supervision manual (SUP) and the detailed requirements for handling complaints are set out in the Dispute Resolution: Complaints sourcebook (DISP). The Client Assets sourcebook (CASS) also contains rules about client money that apply in certain circumstances.

The Principles for Businesses: a reminder

CONC 1.1.4 G RP

The Principles for Businesses (PRIN) apply as a whole to firms with respect to credit-related regulated activities and ancillary activities in relation to credit-related regulated activities (see PRIN 3). In carrying on their activities, firms should pay particular attention to their obligations under:

  1. (1)

    Principle 1 (a firm must conduct its business with integrity);

  2. (2)

    Principle 2 (a firm must conduct its business with due skill, care and diligence);

  3. (3)

    Principle 3 (a firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems);

  4. (4)

    Principle 6 (a firm must pay due regard to the interests of its customers and treat them fairly);

  5. (5)

    Principle 7 (a firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading);

  6. (6)

    Principle 9 (a firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment);

  7. (7)

    Principle 10 (a firm must arrange adequate protection for clients' assets when it is responsible for them); and

  8. (8)

    Principle 11 (a firm must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the firm of which that regulator would reasonably expect notice).

CONC 1.2 Who? What? Where?

CONC 1.2.1 R RP

CONC applies

  1. (1)

    unless otherwise stated in, or in relation to, a rule, to a firm:

    1. (a)

      except where (b) applies, with respect to carrying on credit-related regulated activities;

    2. (b)

      with respect to operating an electronic system in relation to lending in relation to a borrower or prospective borrower under a P2P agreement; and

  2. (2)

    with respect to activities connected to the activities in (a) and (b).

CONC 1.2.2 R RP

A firm must:

  1. (1)

    ensure that its employees and agents comply with CONC; and

  2. (2)

    take reasonable steps to ensure that other persons acting on its behalf comply with CONC.

Guidance on appointed representatives

CONC 1.2.3 G RP
  1. (1)

    Although CONC does not apply directly to a firm'sappointed representatives, a firm will always be responsible for the acts and omissions of its appointed representatives in carrying on business for which the firm has accepted responsibility (section 39(3) of the Act). In determining whether a firm has complied with any provision of CONC, anything done or omitted by a firm'sappointed representative (when acting as such) will be treated as having been done or omitted by the firm (section 39(4) of the Act).

  2. (2)

    Firms should refer to SUP 12 (Appointed representatives), which sets out requirements which apply to firms using appointed representatives.

Where?

CONC 1.2.5 R RP

CONC, except in relation to CONC 3, applies with respect to activities carried on by a firm:

  1. (1)

    with a customer whose habitual residence is in the UK from an establishment maintained by the firm (or its appointed representative) in the UK; or

  2. (2)

    with a customer whose habitual residence is in the UK from an establishment of the firm (or its appointed representative) outside the UK.

EEA territorial scope rule: compatibility with European law

CONC 1.2.6 R RP
  1. (1)

    CONC does not apply to an incoming ECA provider where, in providing a service, the provider is acting as such.

  2. (2)

    CONC applies to an outgoing ECA provider where, in providing a service, the provider is acting as such.

  3. (3)

    The territorial scope of CONC is otherwise modified to the extent necessary to be compatible with European law.

  4. (4)

    This rule overrides every other rule in this sourcebook.

Note: article 3(3) of, and the Annex to, the E-Commerce Directive

CONC 1.3 Guidance on financial difficulties

CONC 1.3.1 G RP

In CONC (unless otherwise stated in or in relation to a rule), the following matters, among others, of which a firm is aware or ought reasonably to be aware, may indicate that a customer is in financial difficulties:

  1. (1)

    consecutively failing to meet minimum repayments in relation to a credit card or store card;

  2. (2)

    adverse accurate entries on a credit file, which are not in dispute;

  3. (3)

    outstanding county court judgments for non-payment of debt;

  4. (4)

    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, or the customer only being able to meet repayments of debts by the disposal of assets or security;

  5. (5)

    consecutively failing to meet repayments when due;

  6. (6)

    agreement to a debt management plan or other debt solution;

  7. (7)

    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.