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MCOB 3.8B Form and content of financial promotions of regulated sale and rent back agreements

Clear, fair and not misleading

MCOB 3.8B.1R

1A firm which communicates or approves a financial promotion of a regulated sale and rent back agreement must take reasonable steps to ensure that the financial promotion is clear, fair and not misleading.

MCOB 3.8B.2G

The guidance on the clear, fair and not misleading standard at MCOB 3.6.5 G, MCOB 3.6.10 G and MCOB 3.6.14 G may be relevant.

2

Ban on SRB leaflet dropping

MCOB 3.8B.3R

A regulated sale and rent back firm must not communicate an unsolicited non-real time financial promotion that relates to a regulated sale and rent back agreement to a potential SRB agreement seller in the form of a leaflet or brochure.

Non-real time financial promotions to customers and advertisements

MCOB 3.8B.4R

A non-real time financial promotion relating to a regulated sale and rent back agreement and any other advertisement which is issued by a regulated sale and rent back firm that could lead to the conclusion of a regulated sale and rent back agreement, must (unless it is of a kind listed in MCOB 3.2.5 R(2)) contain a risk warning that uses the following wording:

"If you enter into a sale and rent back agreement you are unlikely to get the market value of your home and, as a tenant, may only be able to remain there for a limited period. There may be other options available. Please ask for a key terms statement.".

MCOB 3.8B.5R

A non-real time financial promotion relating to a regulated sale and rent back agreement and any other advertisement which is issued by a regulated sale and rent back firm that could lead to the conclusion of a regulated sale and rent back agreement, must describe any regulated sale and rent back agreement as a "sale and rent back agreement" and not use any other expression such as "equity release" to describe it.

MCOB 3.8B.6E
  1. (1)

    A firm should take reasonable steps to ensure that, for a non-real time financial promotion:

    1. (a)

      it includes any matters the omission of which causes the financial promotion not to be clear, fair and not misleading;

    2. (b)

      if it describes a feature of any regulated sale and rent back agreement, it gives no less prominence to the possible disadvantages than to the benefits associated with that feature;

    3. (c)

      it uses plain and intelligible language, and is easily legible (or, in the case of oral promotions, clearly audible);

    4. (d)

      the accuracy of all statements of fact in it can be substantiated;

    5. (e)

      its promotional purpose is not in any way disguised or misrepresented;

    6. (f)

      any statement of fact, promise or prediction is clear, fair and not misleading and any relevant assumptions are clearly and prominently disclosed;

    7. (g)

      any statement of opinion is honestly held and, unless consent is impracticable, given with the written consent of the person concerned;

    8. (h)

      the facts on which any comparison or contrast is made are verified, or, alternatively, that relevant assumptions are prominently disclosed and that the comparison or contrast is presented in a fair and balanced way, which is not misleading and includes all factors which are relevant to the comparison or contrast;

    9. (i)

      it does not contain any false indications, in particular as to the firm's resources and scale of activities;

    10. (j)

      the design, content or format does not in any way disguise, obscure or diminish the significance of any statement, warning or other matter which the regulated sale and rent back agreement is required by this chapter to contain; and

    11. (k)

      it does not include any reference to approval by the FCA or any government body, unless that approval has been obtained in writing from the FCA or that body (see also GEN 1.2 (Referring to approval by the FCA)).

  2. (2)
    1. (a)

      Contravention of (1) may be relied on as tending to show contravention of MCOB 3.8B.1 R.

    2. (b)

      Compliance with (1) may be relied on as tending to show compliance with MCOB 3.8B.1 R.

MCOB 3.8B.7G

The effect of giving no less prominence to the possible disadvantages than to the benefits associated with a feature will depend on the context of the promotion. The costs, restrictions or conditions relating to a feature such as any option available should be detailed for the following non-exhaustive examples:

  1. (1)

    where any part of the discount on the market value of the property is to be repaid to the consumer after a qualifying period; and

  2. (2)

    where a consumer is to benefit from shared appreciation in the value of the property.

Exploitation of customer

MCOB 3.8B.8R

A firm must not in any financial promotion of a regulated sale and rent back agreement exploit the vulnerable nature or circumstances of any customer who may be in financial difficulties and at risk of losing his or her home and must accordingly avoid using in the promotion phrases or terms such as "fast sales", "rescue" or "cash quickly" or any other similar expression.

No approval of real time financial promotions of a regulated sale and rent back agreement

MCOB 3.8B.9R

Referring to the FCA

MCOB 3.8B.10G

The guidance on referring to the FCA in a financial promotion may be relevant (see MCOB 3.6.2 G (3)).