Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

MCOB 12.2 Purpose

MCOB 12.2.1GRP
  1. (1)

    Principle 6 requires a firm to pay due regard to the interests of its customers and treat them fairly. A firm is also under an obligation, as a consequence of this sourcebook's disclosure requirements,1 to make charges transparent to customers. This chapter reinforces these requirements by preventing a firm from imposing unfair and excessive charges.

    1
  2. (2)

    The level of charges under a regulated mortgage contract,2 home reversion plan1 or regulated sale and rent back agreement2 is not typically a matter for regulation. However, in certain limited circumstances, the FCA believes that customers should be protected from unfair and excessive charging practices. This chapter considers four specific circumstances, where:

    2
    1. (a)

      the charges imposed upon a customer seeking to terminate a regulated mortgage contract before the end of the term of the contract do not reflect the cost of termination to the firm;

    2. (b)

      the charges imposed on a customer in payment difficulties are not based upon the costs incurred by the firm;

    3. (c)

      the charges (including rates of interest) imposed on a customer under a regulated mortgage contract,2 home reversion plan1 or regulated sale and rent back agreement2 are excessive and contrary to the customer's interests; and

      2
    4. (d)

      the charges made to a customer in connection with a firm entering into, making a further advance on, administering, arranging or advising on a regulated mortgage contract,2 home reversion plan or regulated sale and rent back agreement2, or arranging or advising on a variation to the terms of a regulated mortgage contract, 2home reversion plan or regulated sale and rent back agreement 2are excessive.1

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