CLARIFICATION OF SCOPE
Payment Services and Electronic Money
Where regulated entities are providing payment services and/or issuing electronic money, only Provisions 3.1, 3.17 to 3.23 and 3.28 to 3.45 apply
TERM AND NOTICE DEPOSIT ACCOUNTS (3.13)
Prior to opening a joint account for two or more personal consumers, a regulated entity must:
- warn each personal consumer of the consequences of opening and operating such a joint account;
- specify the particular operations of the account for which consent is and is not required from all account holders;
- ascertain from the personal consumers whether statements are to be provided separately to each of the joint account holders; and
- ascertain from the personal consumers any limitations that they wish to impose on the operations of the account.
CREDIT (3.14 - 3.16)
A regulated entity must not offer unsolicited pre-approved credit to a personal consumer.
A regulated entity may only increase a personal consumer’s credit limit with the agreement of the personal consumer.
Where a regulated entity intends to impose a charge in respect of the provision or arrangement of a loan to a personal consumer, and it is proposed that this charge is incorporated into the loan amount advanced to the personal consumer, the regulated entity must give the personal consumer the right to pay this charge separately and not include it in the loan.
BUNDLING AND CONTINGENT SELLING (3.17 - 3.23)
A regulated entity must not make the sale of a product or service contingent on the consumer purchasing another product or service from the regulated entity. This provision does not prevent a regulated entity from offering additional products or services to consumers who are existing customers which are not available to potential consumers
Where a credit institution requires a consumer to open a feeder account in order to avail of another product, this shall not be prevented by Provision 3.17 where all of the following conditions are met:
- the consumer must not be obliged to use the feeder account for purposes other than facilitating payments to the product concerned;
- charges cannot be applied for using the feeder account for the purpose for which it was established;
- where additional facilities are available on the feeder account they must be optional and only activated if requested by the consumer; and
- these conditions must be communicated clearly to the consumer.
A regulated entity is prohibited from bundling except where it can be shown that there is a cost saving for the consumer.
Prior to offering, recommending, arranging or providing a bundled product, a regulated entity must provide the consumer with the following information on paper or on another durable medium:
- the overall cost to the consumer of the bundle;
- the cost to the consumer of each product separately;
- how to switch products within the bundle;
- the cost to the consumer of switching products within the bundle;
- how to exit the bundle; and
- the cost to the consumer of exiting the bundle.
Where a consumer wishes to switch one or more products in a bundle or exit a bundle, the regulated entity must:
- provide the consumer with the information set out in Provision 3.20 c) and d) or 3.20 e) and f) as appropriate, on paper or on another durable medium, and
- allow the consumer to retain any product(s) in the bundle that the consumer wishes to keep, without penalty or additional charge, apart from the loss of any discount.
Where a regulated entity offers an optional extra to a consumer in conjunction with a product or service, the regulated entity:
- must inform the consumer on paper or on another durable medium:
- that the consumer does not have to purchase the optional extra in order to buy the main product or service;
- of the cost of the basic product or service (excluding the optional extra); and
- of the cost of the optional extra; and
- must not charge the consumer a fee for any optional extra offered in conjunction with a product or service unless the consumer has confirmed that he or she wishes to purchase the optional extra.
In relation to Provisions 3.20 to 3.22, if the means of communication between the regulated entity and the consumer is by way of telephone only, the regulated entity must:
- provide this information orally at the time of offering, recommending, arranging or providing a bundled product; and
- provide this information to the consumer on paper or on another durable medium immediately after arranging or providing a bundled product.
PAYMENT PROTECTION INSURANCE (3.24)
Where a regulated entity offers payment protection insurance in conjunction with a loan, the regulated entity must:
- exclude the payment protection premium from the initial repayment estimate of the loan advised to the consumer and advise the consumer of the amount of the premium separately; and
- use separate application forms for the payment protection insurance and for the loan.
A regulated entity may pay a fee, commission, other reward or remuneration in respect of the provision of regulated activities only to a person that is:
- a regulated entity;
- a certified person;
- an individual for whom a regulated entity has taken full and unconditional responsibility under the Investment Intermediaries Act 1995;
- an agent, branch or entity to which activities are outsourced in accordance with the European Communities (Payment Services) Regulations 2009 where the regulated entity remains fully liable for the acts of that agent, branch or entity to which activities are outsourced;
- a distributor, agent, branch or entity to which activities are outsourced in accordance with the European Communities (Electronic Money) Regulations 2011 where the regulated entity remains fully liable for the acts of that distributor, agent, branch or entity to which activities are outsourced;
- an entity specifically exempted by law from requiring an authorisation, licence or registration to carry out the regulated activity in respect of which the fee, commission, other reward or remuneration is to be paid;
- a credit intermediary (within the meaning of the Consumer Credit Act 1995 and the European Communities (Consumer Credit Agreements) Regulations 2010); or
- no longer providing a regulated activity, where the fee, commission, other reward or remuneration is in respect of a regulated activity that the person provided when the person fell within any of the descriptions at a) to g) above.
DEPOSIT AGENTS (3.26 - 3.27)
A deposit agent must not retain in its possession an account passbook of a consumer.
A deposit agent must not operate from the same premises as a deposit broker.