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CONC 5C.5 Interpretation

CONC 5C.5.1R

1In this chapter:

  1. (1)

    An “arranged overdraft” is the running-account facility provided for in an authorised non-business overdraft agreement that is a regulated credit agreement.

  2. (2)

    An “arranged overdraft charge” is a charge that a firm is contractually entitled to levy:

    1. (a)

      (by way of interest or otherwise) and that would not be due but for the fact that the customer has borrowed, or borrowed further or continues to borrow, using an arranged overdraft; or

    2. (b)

      exclusively for making available to the customer an arranged overdraft with a pre-arranged limit of £10,000 or less, whether or not the customer borrows, borrows further or continues to borrow, using the arranged overdraft.

  3. (3)

    An “excluded account” is a personal current account that is offered on terms that:

    1. (a)

      an agreement which provides authorisation in advance for the customer to overdraw on the account cannot arise; and

    2. (b)

      either:

      1. (i)

        the account cannot become overdrawn without prior arrangement; or

      2. (ii)

        no charge is payable (by way of interest or otherwise) if the account becomes overdrawn without prior arrangement; and

    3. (c)

      no charge is payable where the firm refuses a payment due to lack of funds.

  4. (4)

    A “personal current account” means an account, other than a current account mortgage, which is a payment account within the meaning of the Payment Accounts Regulations (see CONC 5C.5.2G(1)).

  5. (5)

    A “private bank” is a bank or building society, or an operationally distinct brand of such a firm, over half of whose personal current account customers each had throughout the previous financial year net assets with a total value of not less than £250,000. For this purpose:

    1. (a)

      net assets do not include:

      1. (ii

        the value of the customer’s primary residence or any loan secured on that residence;

      2. (ii)

        any rights of the customer under a qualifying contract of insurance within the meaning of the Regulated Activities Order; and

      3. (iii)

        any benefits (in the form of pensions or otherwise) which are payable on the termination of the service of the customer or on retirement, and to which the customer (or the customer’s dependents) are, or may be, entitled; and

    2. (b)

      “previous financial year” means the most recent period of one year ending with 31 March.

  6. (6)

    An “unarranged overdraft” is a regulated credit agreement that arises as a result of:

    1. (a)

      a personal current account becoming overdrawn in the absence of an arranged overdraft; or

    2. (b)

      the firm making available to the customer funds which exceed the limit of an arranged overdraft.

  7. (7)

    An “unarranged overdraft charge” is a charge (by way of interest or otherwise) that a firm is contractually entitled to levy and that would not be due but for the fact that the customer has borrowed, borrowed further or continues to borrow, using an unarranged overdraft.

CONC 5C.5.2G
  1. (1)

    1The definition of “personal current account” refers to the definition of a “payment account” under the Payment Accounts Regulations, that is: “an account held in the name of one or more consumers through which consumers are able to place funds, withdraw cash and execute and receive payment transactions to and from third parties, including the execution of credit transfers, but does not include any of the following types of account provided that the account is not used for day-to-day payment transactions: savings accounts; credit card accounts where funds are usually paid in for the sole purpose of repaying a credit card debt; current account mortgages or e-money accounts”. The FCA has issued guidance on this definition: see ‘FG16/6 – Payment Accounts Regulations 2015’.

[Note: https://www.fca.org.uk/publications/finalised-guidance/fg16-6-payment-accounts-regulations-2015-definition-payment-account]

  1. (2)

    The definition of excluded account captures personal current accounts where there cannot be a pre-arranged overdraft facility, there cannot be an unarranged overdraft to which interest or charges apply and charges for refusing a payment due to lack of funds cannot arise.