Related provisions for CONC 2.10.7
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Where a firm reasonably suspects a customer has, or may have, some form of mental capacity limitation which would constrain the customer's ability to make a decision to borrow, the firm should not regard the customer as lacking capacity to make the decision unless the firm has taken reasonable steps without success to assist the customer to make a decision. [Note: paragraph 3.2 of MCG]
A firm is likely to have reasonable grounds to suspect a customer may have some form of mental capacity limitation if the firm observes a specific indication (behavioural or otherwise) that could be indicative of some form of limitation of the customer's mental capacity. Examples (amongst others) of indications might include: (1) where a firm has an existing relationship with a customer, the customer making a decision that appears to the firm to be unexpected or out of character;
Firms' practices and procedures should be designed to assist customers that firms understand have, or reasonably suspect of having, mental capacity limitations to overcome, to the extent possible, the effect of the limitations and place them, to the extent possible, on an equivalent basis to customers who do not have such limitations, to increase the likelihood of customers being able to make informed borrowing decisions. [Note: paragraph 4.4 of MCG]
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation it should consider allowing the customer: (1) sufficient time in the circumstances to weigh up the information and explanations the firm has given;(2) sufficient time in the circumstances to make an informed borrowing decision;(3) to defer a decision to borrow to a later date.[Note: paragraphs 4.26, 4.27 and 4.28 of MCG]
Where a firm understands, or reasonably suspects, a customer has or may have a mental capacity limitation it should apply a high level of scrutiny to the customer's application for credit, in order to mitigate the risk of the customer entering into unsustainable borrowing2.[Note: paragraphs 4.32 and 4.33 of MCG]
(1) A firm should balance the risk of a customer taking on unsustainable borrowing against inappropriately or unnecessarily denying credit to a customer. (2) Where a firm understands or reasonably suspects a customer has or may have a mental capacity limitation, it should undertake an appropriate and effective creditworthiness assessment (see CONC 5.2A)2 and it would be appropriate not to place over-reliance on information provided by the customer for the assessment. [Note: paragraph