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.

PROD 5.1 Ensuring the customer can make an informed decision

PROD 5.1.1 R
  1. (1)

    1A firm must give the customer the information in (3), at the same time and in the same document, when it offers to sell them an extended warranty.

  2. (2)

    A firm must ensure that any other person to whom it has referred the customer or invited or induced the customer to obtain an extended warranty from gives the customer the information in (3), at the same time and in the same document, when that person offers to sell the customer an extended warranty.

  3. (3)

    The information is:

    1. (a)

      the total cost of the extended warranty, separate from any other prices, in the following terms:

      1. (i)

        weekly;

      2. (ii)

        annually; and

      3. (iii)

        over the duration of the rent-to-own agreement;

    2. (b)

      the significant features and benefits, significant and unusual exclusions or limitations of the extended warranty, with cross-references to the relevant warranty document provisions;

    3. (c)

      a statement that extended warranties may be available from other persons;

    4. (d)

      an explanation of how the extended warranty interacts with and compares against any other products sold or offered for sale in connection with the rent-to-own agreement (e.g. theft and accidental damage insurance);

    5. (e)

      an explanation of how the extended warranty interacts with and compares against any standard manufacturer’s warranty that may apply to the goods which are the subject of the rent-to-own agreement, given in a way that enables the customer to make a clear comparison between the two;

    6. (f)

      when the extended warranty can be concluded, as described in PROD 5.2.1R; and

    7. (g)

      the date the information in (a) to (f) is provided to the customer.

  4. (4)

    The information in (3) must be communicated in a way that is:

    1. (a)

      fair, clear and not misleading;

    2. (b)

      in writing or another durable medium; and

    3. (c)

      made available and accessible to the customer.

  5. (5)

    The information in (3) must be drawn to the customer’s attention and must be clearly identifiable as key information that the customer should read.

PROD 5.1.2 G
  1. (1)

    1A firm that sells extended warranties that constitute contracts of insurance must also comply with the rules in ICOBS 6 (Product Information).

  2. (2)

    Firms should also take into account the Supply of Extended Warranties on Domestic Electrical Goods Order 2005. Other consumer protection legislation may also be relevant.

PROD 5.2 Deferred opt-in for extended warranties

PROD 5.2.1 R
  1. (1)

    1A firm must:

    1. (a)

      not conclude the sale of an extended warranty; and

    2. (b)

      ensure that no other person to whom the firm has referred the customer concludes the sale of an extended warranty;

until at least two clear days have passed since the required information was provided to the customer (PROD 5.1.1R).

  1. (2)

    The period in (1) is one clear day after providing the information if the customer:

    1. (a)

      initiates the conclusion of the sale of the extended warranty;

    2. (b)

      consents to the conclusion of the sale of the extended warranty earlier than provided for in (1); and

    3. (c)

      confirms that they understand the restriction in (1).

PROD 5.2.2 G

1For example, if a firm provided the required information to the customer on Monday, it would not (absent the customer’s consent) be able to conclude the sale of the extended warranty until Thursday.

PROD 5.2.3 G

1Before the conclusion of the sale of an extended warranty, a firm should have regard to the information needs of its customers and consider whether it would be in the customer’s interest to receive the information in PROD 5.1.1R again, for example if a long time has passed between the provision of the information and the conclusion of the sale.