Consumer credit agreements—pre-contract requirements
Produced in partnership with Jacqui Hatfield of Orrick, Herrington & Sutcliffe and Rebecca Kellner of Orrick, Herrington & Sutcliffe
Last updated on 27/07/2020

The following Financial Services practice note produced in partnership with Jacqui Hatfield of Orrick, Herrington & Sutcliffe and Rebecca Kellner of Orrick, Herrington & Sutcliffe provides comprehensive and up to date legal information covering:

  • Consumer credit agreements—pre-contract requirements
  • Consumer credit pre-contract requirements
  • What is the relevant consumer credit pre-contract law?
  • Which kinds of agreement do the Disclosure Regulations apply to?
  • What are the general requirements?
  • Are there any exceptions to the general requirements?
  • When must the information be provided to the prospective borrower?
  • What are the specific requirements for certain types of consumer credit agreement?
  • Telephone contracts (distance and non-distance contracts)
  • Non-telephone distance contracts
  • More...

Consumer credit agreements—pre-contract requirements

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

Consumer credit pre-contract requirements

In its Consultation Paper entitled 'Detailed proposals for the FCA regime for consumer credit (CP13/10), the Financial Conduct Authority (FCA) emphasised that one of the main principles underpinning the consumer credit rules is to ensure that consumers are treated fairly while still being responsible for their own decisions.

The practical application of this principle is encapsulated by the consumer credit rules relating to pre-contractual disclosure (CONC 4). By requiring a lender to disclose pre-contract information, adequate explanations and other risk warnings to the borrower ‘in good time’ before they decide to enter into a credit agreement, the borrower can make an informed decision about entering into the credit agreement. For information on post contract requirements, see Practice Note: Consumer credit agreements—post-contract requirements.

The rules in CONC 4 are largely prescriptive in nature, with general rules (CONC 4.2) applicable to all regulated consumer credit agreements, and further specific rules for

Related documents:
Key definition:
Consumer credit agreement definition
What does Consumer credit agreement mean?

It is an agreement between an individual (the 'debtor') and any other person (the 'creditor') by which the creditor provides the debtor with credit of any amount. It must provide certain pre-contractual information to the consumer in a standardised form as defined by EC Directive 2008/48/EC.

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