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CONC 4.5 Commissions

Application

CONC 4.5.1 R RP
  1. (1)

    CONC 4.5.2 G applies to a firm with respect to consumer credit lending.

  2. (2)

    CONC 4.5.3 R and CONC 4.5.4 R apply to a firm with respect to credit broking in relation to:

    1. (a)

      regulated credit agreements; and

    2. (b)

      regulated consumer hire agreements.

  3. (3)

    CONC 4.5.3 R and CONC 4.5.4 R also apply to a firm carrying on the activities specified in article 36A(1)(a) or(c) of the Regulated Activities Order in relation to:

    1. (a)

      credit agreements that would be regulated credit agreements but for the relevant provisions; and

    2. (b)

      consumer hire agreements that would be regulated consumer hire agreements but for articles 60O and 60Q of the Regulated Activities Order.

Commissions lenders to credit brokers

CONC 4.5.2 G RP

A lender should only offer to, or enter into with, a firm a commission agreement providing for differential commission rates or providing for payments based on the volume and profitability of business where such payments are justified based on the extra work of the firm involved in that business.

[Note: paragraph 5.5 (box) of ILG]

Commissions: credit brokers

CONC 4.5.3 R RP

A credit broker must disclose to a customer in good time before a credit agreement or a consumer hire agreement is entered into, the existence of any commission or fee or other remuneration payable to the credit broker by the lender or owner or a third party in relation to a credit agreement or a consumer hire agreement, where knowledge of the existence or amount of the commission could actually or potentially:

  1. (1)

    affect the impartiality of the credit broker in recommending a particular product; or

  2. (2)

    have a material impact on the customer's transactional decision.

    [Note: paragraph 3.7i (box) and 3.7j of CBG and 5.5 (box) of ILG]

CONC 4.5.4 R RP

At the request of the customer, a credit broker must disclose to the customer, in good time before a regulated credit agreement or a regulated consumer hire agreement is entered into, the amount (or if the precise amount is not known, the likely amount) of any commission or fee or other remuneration payable to the credit broker by the lender or owner or a third party.

[Note: paragraph 3.7i (box) of CBG]