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CONC 11.2 Right of withdrawal: P2P agreements

[Note: Until the end of 30 September 2014, transitional provisions apply to CONC 11.2: see CONC TP 4.6]

Application

CONC 11.2.1R

This section applies to a firm with respect to operating an electronic system in relation to lending in relation to a borrower under a P2P agreement.

CONC 11.2.2R

This section does not apply to a P2P agreement under which credit exceeding £60,260 is, was or would be provided unless the agreement is a residential renovation agreement1.

Right to cancel

CONC 11.2.3R

A firm must ensure that a P2P agreement that the firm makes available to a borrower and a lender provides for the following contractual rights and obligations and procedure for and effect of the exercise of those rights and obligations:

  1. (1)

    a right for the borrower:

    1. (a)

      to withdraw from the agreement (“the right of withdrawal”);

    2. (b)

      without giving any reason; and

    3. (c)

      by giving oral or written notice of the withdrawal to the firm (on behalf of the lender) before the end of the period of 14 days:

      1. (i)

        beginning with the day after the P2P agreement is made; or

      2. (ii)

        beginning with the day on which the borrower receives the contractual terms and conditions of the service and any other pre-contractual information required, as the case may be, under CONC 4.3, if that is later than the date in (1);

  2. (2)

    where written notice is given of the right of withdrawal by electronic means:

    1. (a)

      it may be sent to the number or electronic address specified for the purpose in the agreement; and

    2. (b)

      where it is so sent, it is to be regarded as having been received by the firm (on behalf of the lender) at the time it is sent;

  3. (3)

    where written notice is given of the right of withdrawal, other than by electronic means:

    1. (a)

      it may be sent by post to, or left at, the postal address specified for the purpose in the agreement; and

    2. (b)

      where it is sent by post to that address, it is to be regarded as having been received by the firm (on behalf of the lender) at the time of posting;

  4. (4)

    where the borrower exercises the right of withdrawal from a P2P agreement:

    1. (a)

      the borrower must repay to the firm (on behalf of the lender) or the lender any credit provided and the interest accrued on it (at the rate provided for under the agreement); but

    2. (b)

      the borrower is not liable to pay to the firm (on behalf of the lender) or the lender any compensation, fees or charges, except any non-returnable charges paid by the lender or by the firm (on behalf of the lender) to a public administrative body;

  5. (5)

    the effect of exercising the right to withdraw is that the obligations of the borrower under the agreement cease to have effect except for the obligation in (4); and

  6. (6)

    where an amount is payable where (4) applies, the agreement may provide that the amount must be paid without undue delay and no later than the end of the period of 30 days beginning with the day after the day on which the notice of withdrawal was given (and if not paid by the end of that period the agreement may provide that the sum may be recovered from the borrower as a debt).

CONC 11.2.4R

A firm must ensure that a P2P agreement that it makes available to a lender and a borrower does not provide for any other obligations of the borrower in connection with the exercise of the rights in CONC 11.2.3 R.