The purpose of MCOB 2.2 is to restate, in slightly amended form, and as a separate rule, the part of Principle 7 (Communications with clients) that relates to communication of information. This enables a customer, who is a private person, to bring an action for damages under section 138D (Contravention of rules) of the Act to recover loss resulting from a firm that carries on the activities referred to in MCOB 2.1.3 R communicating information, in the course of those activities, in a way that is not clear or fair, or that is misleading. MCOB 2.2 also clarifies the expectations of the FCA where any rule requires the provision of information and there are two or more customers.
In many circumstances there will be two or more customers under any home finance transaction,4 or two or more prospective customers looking to enter into the same home finance transaction.4 In such circumstances, where a rule in MCOB requires the provision of information to such customers and the customers have different addresses, a firm sending out this information should send it to each address. If the customers share the same address it will be sufficient to send a single copy of the information addressed to each of the customers.44
describe any early repayment charge as an 'early repayment charge';4
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and not use any other expression to describe them.
The rule on clear, fair and not misleading communications4 covers all communications with customers, for example any oral or written statements, telephone calls and any correspondence which is not a financial promotion4 to which MCOB 3 (Financial promotion) applies. In respect of financial promotions of qualifying credit,7 of home reversion plans or of regulated sale and rent back agreements7,4 firms should note the separate requirements of MCOB 3.4447
Prominence of relevant information can play a key role in ensuring that a communication is clear, fair and not misleading. Where this is the case, the firm should consider prominence in the context of the communication as a whole. Use can be made of the positioning of text, background and text colour and type size to ensure that specified information meets the requirements of MCOB.