Financial Services (Consumer Credit) Act 2011 (Gibraltar)

Financial Services (Consumer Credit) Act 2011

Published: 2011-02-16

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Financial Services (Consumer Credit)

2011-12

FINANCIAL SERVICES (CONSUMER CREDIT)

ACT 2011

Principal Act

Act. No. 2011-12 Commencement (LN. 2011/093) 16.6.2011

Assent 4.5.2011

Amending

enactments

Relevant current

provisions

Commencement

date

LN. 2012/220 Sch. 3 1.1.2013

2013/022 ss. 7(1)(m) & (o), 12(1), Schs. 1 & 2 14.2.2013

2016/055 s. 4(5) 21.3.2016

English sources:

None cited

Transposing:

Directive 87/102/EEC

Directive 2008/48/EC

Directive 2011/90/EU

EU Legislation/International Agreements involved:

Financial Services (Consumer Credit)

2011-12

FINANCIAL SERVICES (CONSUMER CREDIT) ACT 2011

ARRANGEMENT OF SECTIONS

Section

PART I

PRELIMINARY

1. Title.

2. Scope of Act.

PART II

INTERPRETATION

3. Interpretation.

PART III

AGREEMENTS TO WHICH THIS ACT APPLIES

4. Application of Act

PART IV

OBLIGATIONS OF THE CREDITOR AND CREDIT

INTERMEDIARY

5. Obligation to comply with Act.

6. Obligation to provide pre-contractual information.

7. Content of pre-contractual information.

8. Pre-contractual information relating to an overdraft facility where

credit has to be repaid within three months.

9. Pre-contractual information relating to an overdraft facility where

credit has to be repaid within one month.

10. Creditworthiness.

PART V

RIGHTS OF THE CONSUMER

11. Right to receive copy of agreement.

12. Content of consumer credit agreement.

13. Right to terminate an open-end credit agreement.

14. Right to withdraw.

15. Linked credit agreements: Right of consumer to pursue claim against

creditor.

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16. Right to early repayment.

17. Rights relating to assignment of rights and set-off.

18. Overrunning.

PART VI

MISCELLANEOUS

19. Advertisements.

20. Cross border credit.

21. Calculation of the annual percentage rate of charge.

PART VII

FINAL PROVISIONS

22. Enforcement and monitoring.

23. Offences.

24. Act to prevail.

25. Application of existing law.

26. Continuity of the law.

27. Regulations.

28. Codes of practice.

29. Alternative dispute resolution.

SCHEDULE 1

STANDARD EUROPEAN CONSUMER CREDIT INFORMATION

SCHEDULE 2

EUROPEAN CONSUMER CREDIT INFORMATION FOR

(1) overdrafts

(2) consumer credit offered by certain credit organisations

(3) debt conversion

SCHEDULE 3

I. The basic equation expressing the equivalence of drawdowns on the

one hand and repayments and charges on the other

II. Additional assumptions for the calculation of the annual percentage

rate of charge

Financial Services (Consumer Credit)

2011-12

Financial Services (Consumer Credit)

2011-12

AN ACT TO MAKE PROVISION FOR THE REGULATION OF

CONSUMER CREDIT; AND MATTERS CONNECTED THERETO.

PART I

PRELIMINARY

Title and commencement.

1. This Act may be cited as the Financial Services (Consumer Credit) Act

2011 and comes into operation on the day appointed by the Government by

notice in the Gazette.

Scope of Act.

2. This Act transposes into the law of Gibraltar the provisions of Directive

2008/48/EC of the European Parliament and of the Council of 23 April 2008

on credit agreements for consumers and repealing Council Directive

87/102/EEC.

PART II

INTERPRETATION

Interpretation.

3. For the purpose of this Act

“annual percentage rate of charge” shall have the meaning assigned to it

under section 21;

“borrowing rate” means the interest rate expressed as a fixed or variable

percentage applied on an annual basis to the amount of credit

drawn down;

“consumer” means a natural person who, in transactions covered by this

Act, is acting for purposes which are outside his trade, business or

profession;

“creditor” means a natural or legal person who grants or promises to

grant credit in the course of his trade, business or profession;

“credit agreement” means an agreement whereby a creditor grants or

promises to grant to a consumer credit in the form of a deferred

payment, loan or other similar financial accommodation, except for

agreements for the provision on a continuing basis of services or

for the supply of goods of the same kind, where the consumer pays

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for such services or goods for the duration of their provision by

means of instalments;

“credit intermediary” means a natural or legal person who is not acting as

a creditor and who, in the course of his trade, business or

profession, for a fee, which may take a pecuniary form or any other

agreed form of financial consideration

(a) presents or offers credit agreements to consumers;

(b) assists consumers by undertaking preparatory work in respect

of credit agreements other than as referred to in (a); or

creditor;

“the Directive” means Directive 2008/48/EC of the European Parliament

and of the Council of 23 April 2008 on credit agreements for

consumers and repealing Council Directive 87/102/EEC, as

amended from time to time;

“the Director” means such person as the Minister shall appoint;

“durable medium” means any instrument which enables the consumer to

store information addressed personally to him in a way accessible

for future reference for a period of time adequate for the purposes

of the information and which allows the unchanged reproduction of

the information stored;

“fixed borrowing rate” means that the creditor and the consumer agree in

the credit agreement on one borrowing rate for the entire duration

of the credit agreement or on several borrowing rates for partial

periods using exclusively a fixed specific percentage. If not all

borrowing rates are determined in the credit agreement, the

borrowing rate shall be deemed to be fixed only for the partial

periods for which the borrowing rates are determined exclusively

by a fixed specific percentage agreed on the conclusion of the credit

agreement;

“linked credit agreement” means a credit agreement where

(a) the credit in question serves exclusively to finance an

agreement for the supply of specific goods or the provision of a

specific service; and

(b) those two agreements form, from an objective point of view, a

commercial unit,

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and, for the purpose of this definition, a commercial unit shall

be deemed to exist where the supplier or service provider

himself finances the credit for the consumer or, if it is financed

by a third party, where the creditor uses the services of the

supplier or service provider in connection with the conclusion

or preparation of the credit agreement, or where the specific

goods or the provision of a specific service are explicitly

specified in the credit agreement;

“the Minister” means the Minister responsible for financial services;

“overdraft facility” means an explicit credit agreement whereby a creditor

makes available to a consumer funds which exceed the current

balance in the consumer’s current account;

“overrunning” means a tacitly accepted overdraft whereby a creditor

makes available to a consumer funds which exceed the current

balance in the consumer’s current account or the agreed overdraft

facility;

“total amount of credit” means the ceiling or the total sums made

available under a credit agreement;

“total amount payable by the consumer” means the sum of the total

amount of the credit and the total cost of the credit to the consumer;

“total cost of the credit to the consumer” means all the costs, including

interest, commissions, taxes, and any other kind of fees which the

consumer is required to pay in connection with the credit agreement

and which are known to the creditor, except for legal costs; costs in

respect of ancillary services relating to the credit agreement, in

particular insurance premiums, are also included if, in addition, the

conclusion of a service contract is compulsory in order to obtain the

credit or to obtain it on the terms and conditions marked.

PART III

AGREEMENTS TO WHICH THIS ACT APPLIES

Application of Act.

4.(1) This Act shall apply to credit agreements.

(2) Without prejudice to sub-section (1), this Act shall not apply to credit

agreements

(a) which are secured

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(i) by a mortgage, or

(ii) by a privilege or by a right,

related to immovable property;

(b) the purpose of which is to acquire or retain property rights over

the land or over an existing or projected building;

than Euro 75,000;

(d) relating to hiring or leasing where an obligation to purchase the

object of the agreement is not laid down either by the

agreement itself or by a separate agreement. Such an obligation

shall be deemed to exist if it is so decided unilaterally by the

creditor;

(e) in the form of an overdraft facility and where the credit has to

be repaid within one month, except for section 9;

(f) where the credit is granted free of interest and any other

charges;

(g) under the terms of which the credit has to be repaid within

three months and only insignificant charges are payable;

(h) where the credit is granted by an employer to his employees as

a secondary activity free of interest or at annual percentage

rates of charge which are lower than those prevailing on the

market and which are not offered to the public;

(i) which are concluded with investment firms as defined in the

Financial Services (Markets in Financial Instruments) Act 2006

or with credit institutions as defined in the Financial Services

(Banking) Act for the purpose of allowing an investor to carry

out a transaction relating to one or more of the instruments

listed in Section C of Schedule 1 to the Financial Services

(Markets in Financial Instruments) Act 2006 where the

investment firm or credit institution granting the credit is

involved in such transaction and is regulated under that Act or

the Financial Services (Banking) Act;

(j) which are the outcome of a settlement reached in court or

before a statutory authority;

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(k) which relate to deferred payment, free of charge, of an existing

debt;

(l) upon the conclusion of which the consumer is requested to

deposit an item as security in the creditor’s safe-keeping and

where the liability of the consumer is strictly limited to that

pledged item;

(m) which relate to loans granted to a restricted public under a

statutory provision with a general interest purpose and at lower

interest rates than those prevailing on the market or free of

interest or on other terms which are more favourable to the

consumer than those prevailing on the market and at interest

rates not higher than those prevailing on the market.

(3) Credit agreements in the form of an overdraft facility and where the

credit has to be repaid on demand or within three months, shall be subject to

only sections 3, 4, 8, 9, 10, 11, the obligation in section 12(1) that the

consumer credit agreement be drawn up in writing or on a durable medium,

12(2), 12(3), 12(6), 12(7), 15, 17, 19(1), 19(2)(a) to (d), 20 and 21 to 29.

(4) An overrunning, shall be subject to sections 3, 4, 18 and 22 to 29.

(5) Despite subsection (2)(c) this Act applies to unsecured credit

agreements the purpose of which is the renovation of a residential

immovable property involving a total amount of credit above Euro 75 000.

PART IV

OBLIGATIONS OF THE CREDITOR AND CREDIT

INTERMEDIARY

Obligation to comply with Act.

5.(1) A creditor shall take all necessary steps to ensure full compliance with

this Act.

(2) For the purpose of this Part, unless otherwise provided, the obligations

of the creditor shall equally apply to a credit intermediary where a credit

intermediary presents or offers credit agreements to consumers, assists

consumers by undertaking preparatory work in respect of credit agreements,

or concludes credit agreements with consumers on behalf of the creditor.

(3) Where a credit intermediary participates or intends to participate in

terms of sub-section (2), a credit intermediary shall

(a) indicate in advertising and documentation intended for

consumers, the extent of his powers in particular whether he

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works exclusively with one or more creditors or as an

independent broker;

(b) disclose the fee, if any, payable by the consumer to the credit

intermediary for his services, which fee shall be agreed by in

writing or on another durable medium between the consumer

and the credit intermediary before the conclusion of the credit

agreement;

intermediary for his services to the creditor for the purpose of

calculating the annual percentage rate of charge.

(4) Sub-section (2) does not apply to suppliers of goods or services acting

as credit intermediaries in an ancillary capacity. This is without prejudice to

the creditor’s obligation to ensure that the consumer receives the pre-

contractual information referred to under sections 7 and 8.

Obligation to provide pre-contractual information.

6.(1) In good time before a credit agreement is concluded, a creditor and,

where applicable, a credit intermediary, on the basis of the credit terms and

conditions offered by the creditor, and taking into account the preferences

expressed and information supplied by the consumer, shall provide to the

consumer the information identified under sections 7 and 8, in order to assist

the consumer in comparing different offers and reaching an informed

decision on whether to conclude a credit agreement with the creditor.

(2) In assisting a consumer under sub-section (1) a creditor and, where

applicable, a credit intermediary, shall provide adequate explanations to the

consumer in order to place the consumer in a position enabling him to assess

whether the proposed credit agreement is adapted to his needs and financial

situation, where appropriate by explaining the pre-contractual information to

be provided under section 7, the essential characteristics of the products

proposed and specific effects they may have on the consumer, including the

consequences of default in payment by the consumer.

Content of pre-contractual information.

7.(1) The information to be disclosed by a creditor or credit intermediary to

consumers under section 6, other than consumers whose credit agreement is

regulated by sections 8 and 9, shall be the following

(a) the type of credit to be provided under the agreement;

(b) the identity and geographical address of the creditor and of the

credit intermediary, where applicable;

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and the conditions governing the drawdown of credit;

(d) the duration of the credit agreement;

(e) in the case of credit in the form of deferred payment for

specific goods or services or linked credit agreements, a

description of the goods, services and the cash price;

(f) the borrowing rate, the conditions governing the application of

that rate and, where available, any index or reference rate

applicable to the initial borrowing rate, as well as the periods,

conditions and procedure for changing the borrowing rate; and

if different borrowing rates apply in different circumstances,

the above information shall be supplied in respect of all the

applicable rates;

(g) the annual percentage rate of charge and the total amount

payable by the consumer illustrated by means of a

representative example mentioning all the assumptions used in

order to calculate that rate. Where the consumer has informed

the creditor of one or more components of his preferred credit,

such as the duration of the credit agreement and the total

amount of credit, the creditor shall take those components into

account; and if a credit agreement provides different ways of

drawdown with different charges or borrowing rates and the

creditor uses the assumptions set out in point (b) of Part II of

Schedule 3, he shall indicate that other drawdown mechanisms

for this type of credit agreement may result in higher annual

percentage rates of charge;

(h) the amount, number and frequency of payments to be made by

the consumer and, where appropriate, the order in which

payments will be allocated to different outstanding balances

charged at different borrowing rates for the purpose of

reimbursement;

(i) where applicable, the charges for maintaining one or several

accounts recording both payment transactions and drawdowns,

unless the opening of an account is optional, and the charges

for using a means of payment for both payment transactions

and drawdowns;

(j) any other charges deriving from a credit agreement and the

conditions under which those charges may be changed;

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(k) where applicable, a statement that legal costs will be payable

by the debtor on conclusion of the credit agreement;

(l) the obligation, if any, to enter into a contract for ancillary

services relating to the consumer credit agreement, in particular

insurance services, where the conclusion of such a contract is

compulsory in order to obtain the credit or to obtain it on the

terms and conditions marketed;

(m) the interest rate applicable in the case of late payments and the

arrangements for its adjustment, and, where applicable, any

charges payable for default;

(n) a warning relating to the consequences of missing payments;

(o) where applicable, the sureties required;

(p) in the case of a credit agreement under which payments made

by a consumer do not give rise to an immediate corresponding

amortisation of the total amount of credit, but are used to

constitute capital during periods and under conditions laid

down in the credit agreement or in an ancillary agreement, a

clear and concise statement that such credit agreements do not

provide for a guarantee of repayment of the total amount of

credit drawn down under the credit agreement unless such a

guarantee is given;

(q) the existence or absence of a right of withdrawal;

(r) the consumer’s right to early repayment and, where applicable,

the creditor’s right to compensation and the way in which

compensation is to be determined in accordance with section

16;

(s) the consumer’s right to be informed immediately and free of

charge of information relating to his creditworthiness;

(t) if applicable, the period of time during which the creditor is

bound by the pre-contractual information;

(u) the consumer’s right to be supplied, on request and free of

charge with a copy of the draft credit agreement; save that this

provision shall not apply if the creditor is at the time of the

request unwilling to proceed to the conclusion of the credit

agreement with the consumer.

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(2) The information under sub-section (1) shall be provided on paper or on

another durable medium by means of the form contained in Schedule 1; and

the creditor shall have discharged the obligation of providing information

under this section and of providing information under sub-section (1) and

(2) of section 7 of the Financial Services (Distance Marketing) Act 2006 if

he has supplied the information in the form contained in Schedule 1.

(3) Should the creditor provide to the consumer additional information to

the one identified under sub-section (1), a separate document shall be

entered into between the creditor and the consumer, and shall be annexed to

the one under sub-section (2).

(4) In the case of a voice telephone communication as referred to in sub-

section (3) of section 7 of the Financial Services (Distance Marketing) Act

2006, the obligation to provide a description of the main characteristics of

the financial services shall include

(a) a reference to

(i) the total amount of credit and the conditions governing

the drawdown;

(ii) the duration of the credit agreement;

(iii) a description of the goods, services and the cash price in

the case of credit in the form of deferred payment for

specific goods or services or linked credit agreements;

(iv) the borrowing rate, the conditions governing the

application of that rate and, where applicable, any index

or reference applicable to the initial borrowing rate, as

well as the periods, conditions, and procedure for

changing the borrowing rate; and if different borrowing

rates apply in different circumstances, the above

information shall be supplied in respect of all the

applicable rates; and

(v) the amount, number and frequency of payments to be

made by the consumer and where appropriate, the order

in which payments will be allocated to different

outstanding balances charged at different borrowing rates

for the purpose of reimbursement;

(b) the annual percentage rate of charge illustrated by means of a

representative example; and

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(5) If the agreement has been concluded at the consumer’s request using a

means of distance communication which does not enable the information to

be provided in accordance with sub-section (1), in particular in the case

referred to in sub-section (4), the creditor shall provide the consumer with

the full pre-contractual information, using the form in Schedule 1,

immediately after the conclusion of the credit agreement.

Pre-contractual information relating to an overdraft facility where the

credit has to be repaid on demand or within three months.

8.(1) In good time before the agreement is entered into, the creditor and,

where applicable, the credit intermediary, shall provide to the consumer the

following information in the case of a credit agreement which takes the form

of an overdraft facility and where the credit has to be repaid on demand or

within three months

(a) the type of credit to be provided under the agreement;

(b) the identity and geographical address of the creditor and of the

credit intermediary, where applicable;

(d) the duration of the credit agreement;

(e) the borrowing rate, the conditions governing the application of

that rate and, where applicable, any index or reference rate

applicable to the initial borrowing rate, the charges applicable

from the time the credit agreement is concluded and, where

applicable, the conditions under which those charges may be

changed;

(f) the annual percentage rate of charge, illustrated by means of

representative examples mentioning all the assumptions used in

order to calculate that rate;

(g) the conditions and procedure for terminating the agreement;

(h) an indication that the consumer may be requested to repay the

amount of credit in full at any time;

(i) the interest rate applicable in the case of late payment and the

arrangements for its adjustment, and, where applicable, any

charges payable for default;

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(j) the charges applicable from the time the agreement is

concluded and, where applicable, the conditions under which

those charges may be changed;

(k) the consumer’s right to be informed immediately and free of

charge of information relating to his creditworthiness;

(l) if applicable, the period of time during which the creditor is

bound by the pre-contractual information.

(2) The information under sub-section (1) shall be provided in writing or

on a durable medium, and may be provided in the form contained in

Schedule 2; and the creditor shall have discharged the obligation of

providing information under this section and the information under sub-

section (1) and (2) to section 7 of the Financial Services (Distance Selling

Marketing) Act 2006 if he has supplied the information in the form

contained in Schedule 2.

(3) In the case of a voice telephony communication and where the

consumer requests that the overdraft facility be made available with

immediate effect, the description of the main characteristics of the financial

service shall include at least the items identified under paragraphs (c), (e),

(f) and (h) of sub-section (1).

(4) If the agreement has been concluded at the consumer’s request using a

means of distance communication which does not enable the information to

be provided in accordance with sub-sections (1) and (2), including in the

cases referred to in sub-section (3), the creditor shall immediately, after the

conclusion of the credit agreement, fulfil his obligations under sub-sections

(1) to (3) by providing the contractual information pursuant to section 12 in

so far as that section is applicable.

Pre-contractual information relating to an overdraft facility where the

credit has to be repaid within one month.

9. Notwithstanding section 4(2)(e), in the case of a credit agreement in the

form of an overdraft facility and where the credit has to be repaid within one

month, the creditor shall disclose to the debtor the following information

(a) the total amount of credit to be provided under the agreement

and the conditions governing the drawdown of credit;

(b) the borrowing rate, the conditions governing the application of

that rate and, where applicable, any index or reference

applicable to the initial borrowing rate, as well as the periods,

conditions and procedure for changing the borrowing rate; and

if different rates apply in different circumstances, the above

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information shall be supplied in respect of all the applicable

rates;

representative examples mentioning all the assumptions used in

order to calculate that rate; and

(d) an indication that the consumer may be requested to repay the

amount of credit in full at any time.

Creditworthiness.

10.(1) Before the conclusion of an agreement the creditor shall assess the

creditworthiness of the consumer by obtaining sufficient information where

appropriate from the consumer and where necessary on the basis of a

consultation of a relevant database.

(2) If the parties agree to change the total amount of credit after the

conclusion of the credit agreement, the creditor shall

(a) update the financial information at this disposal concerning the

consumer; and

(b) assess the consumer’s creditworthiness,

before the total amount of credit is significantly increased.

PART V

RIGHTS OF THE CONSUMER

Right to receive copy of agreement.

11.(1) The consumer shall be entitled to receive, free of charge, and upon

request, a copy of the draft consumer credit agreement.

(2) Sub-section (1) does not apply if the creditor is, at the time of the

consumer’s request, unwilling to proceed to the making of the agreement

with the consumer.

(3) On conclusion of the consumer credit agreement, the consumer shall

be entitled to receive, free of charge, a copy of the final agreement.

Content of consumer credit agreement.

12.(1) The consumer credit agreement referred to in section 11(3) shall

specify in a clear and concise manner and shall contain the following

information

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(a) the information listed under sub-section (a) to (f), (h), (i), (j),

(k), (m), (n), and (o) of sub-section (1) to section (7);

(b) the annual percentage rate of charge and the total amount

payable by the consumer calculated at the time the credit

agreement is concluded; provided that

(i) all the assumptions used in calculating the rate shall be

mentioned;

(ii) for the purpose of credit facilities granted by banking

institutions, the credit agreement relating to such

facilities shall be deemed to be concluded on the

acceptance by the consumer in writing to the terms and

conditions stipulated in the sanction letter.

duration is involved, the right of the consumer to receive, on

request and free of charge, at any time throughout the duration

of the credit agreement, a statement of account in the form of

an amortisation table. The amortisation table shall contain the

following information

(i) the payments owing and the periods and conditions

relating to the payment of such amounts;

(ii) a breakdown of each repayment showing capital

amortisation;

(iii) the interest calculated on the basis of the borrowing rate;

(iv) where applicable, the amount of any additional costs; and

(v) where the interest is not fixed or the additional costs may

be changed under the credit agreement, it shall indicate

clearly and concisely that the data contained in the table

will remain valid only until such time as the borrowing

rate or the additional costs are changed in accordance

with the credit agreement;

(d) if charges and interest are to be paid without capital

amortisation, a statement showing the periods and conditions

for the payment of the interest and of any associated recurrent

and non-recurrent charges;

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(e) the existence or absence of a right of withdrawal together with

conditions attached to such right, which conditions shall

include the

(i) period during which the right may be exercised;

(ii) information concerning the obligation of the consumer to

pay the capital drawn down and the interest in

accordance with section 14(3)(b); and

(iii) amount of interest payable per day;

(f) information concerning the rights resulting under sections 15

and 16 and the conditions attached to such rights;

(g) the procedure to be followed in exercising the right of

termination of the credit agreement;

(h) whether or not there is a procedure to be followed should a

complaint be lodged by the consumer, the redress mechanism

available for the consumer and the methods for having access

to it;

(i) where applicable, details of the competent supervisory

authority;

(j) where applicable, other contractual terms and conditions.

(2) In the case of a credit agreement under which payments made by the

consumer do not give rise to an immediate corresponding amortisation of

the total amount of credit, but are used to constitute capital during periods

and under conditions laid down in the credit agreement or in an ancillary

agreement, the information contained in sub-section (1) shall, unless a

guarantee is provided, include a clear and concise statement that such credit

agreements do not provide a guarantee of repayment of the total amount of

credit drawn under the credit agreement.

(3) In the case of a credit agreement falling under section 8(1), the

agreement shall contain, in a clear and precise manner, the following

information

(a) the type of credit;

(b) the identities and geographical addresses of the contracting

parties, and where applicable, of the credit intermediary

involved;

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drawdown;

(d) the borrowing rate and the conditions governing the application

of that rate, and, where available, any index or reference rate

applicable to the initial borrowing rate, as well as the periods,

conditions and procedures for changing the borrowing rate; if

different borrowing rates apply in different circumstances, the

above information should be made applicable to all respective

rates;

(e) the annual percentage rate of charge and the total cost of the

credit to the consumer, calculated at the time the credit

agreement is concluded; all the assumptions used in order to

calculate that rate in terms of section 21(3) to (5) in

conjunction with the definitions of “total cost of credit to the

consumer” and “annual percentage rate of charge” in section 3

shall be mentioned;

(f) an indication that the consumer may, at any time, upon demand

be requested to repay the amount of credit in full;

(g) conditions relating to the exercise of the right of withdrawal

from the credit agreement;

(h) the charges applicable from time the agreement is concluded

and, where applicable, the conditions under which those

charges may be changed; and

(i) the duration of credit agreement.

(4) Should there be a change in the borrowing rate, the creditor shall

(a) inform the consumer of such a change before the change enters

into force;

(b) communicate the information in writing or on a durable

medium;

after the entry into force of the new borrowing rates; and

(d) if the number or frequency of the payments changes, particulars

of such payment changes.

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(5) The parties may agree in the credit agreement that the information

referred to in sub-section (4) is to be given to the consumer periodically in

cases where the

(a) change in the borrowing rate is caused by a change in a

reference rate;

(b) new reference rate is made publicly available by appropriate

means; and

available in the premises of the creditor.

(6) Where the credit agreement covers credit in the form of an overdraft

facility

(a) the consumer is entitled to be kept regularly informed in

writing or on a durable medium in writing by means of a

statement of account of

(i) the precise period to which the statement of account

relates;

(ii) the amounts and dates of drawdowns;

(iii) the balance from the previous statement and the date

thereof;

(iv) the new balance;

(v) the dates and amounts of payments made by the

consumer;

(vi) the borrowing rate applied;

(vii) any charges that have been applied;

(viii) where applicable, the minimum amount to be paid;

(b) should there be any increase in the borrowing rate, and before

the change enters into force, the consumer is entitled to be

informed in writing or on a durable medium by the creditor of

the increase involved and of any charges payable.

(7) The parties may agree in the credit agreement that information

concerning changes in the borrowing rate is to be given in the manner

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2011-12

provided for in sub-section (6)(a) in the circumstances described in

paragraphs (a) to (c) of sub-section (5).

Right to terminate an open-end credit agreement.

13.(1) A consumer is entitled to terminate an open-end credit agreement at

any time and free of charge.

(2) A consumer credit agreement may however provide for a period of

notice not exceeding one month before termination by the consumer.

(3) If provided for in the agreement, the creditor may terminate an open-

end consumer credit agreement by giving the consumer not less than two

months’ notice in writing or on a durable medium.

(4) A creditor may not terminate the consumer’s right to draw down credit

under an open-end consumer credit agreement unless such termination is

provided for in the agreement and is for an objectively justified reason. For

these purposes, “objectively justified reasons” include suspicion by the

creditor that the consumer is involved in an unauthorised or fraudulent use

of a credit, or that there is significant risk that the consumer will be unable

to fulfil his obligation to pay the credit.

(5) Where the creditor intends to invoke sub-section (4), he shall inform in

writing or on a durable medium the consumer of the termination and the

reasons leading to such termination before the date of termination or, if that

is not practicable, immediately thereafter.

(6) Sub-section (5) shall not apply where provision of the information

would be contrary to public policy or public security or is unlawful.

Right to withdraw.

14.(1) A consumer has a right to withdraw from a consumer credit

agreement without giving any reasons.

(2) The consumer’s right to withdraw must be exercised within a period of

14 calendar days which period starts to run either

(a) from the day of the conclusion of the credit agreement, where a

copy of the agreement is given to the consumer on the same

date; or

(b) from the day when the consumer receives a copy of the

agreement, where a copy of the agreement is given to the

consumer at a later date,

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provided that for the purpose of credit facilities granted by banking

institutions which necessitate the issue of a letter of acceptance, the

agreement shall be deemed to be concluded on the day the consumer accepts

in writing the terms and conditions listed in the letter of acceptance.

(3) If the consumer exercises his right of withdrawal, he shall

(a) in order to give effect to the withdrawal before the expiry of the

period specified in sub-section (2), notify in writing the creditor

in conformity with the information given to the consumer

under section 12(1)(e). The deadline shall be deemed to have

been met if that notification, if it is in writing or on a durable

medium that is available and accessible to the creditor, is

dispatched before the deadline expires;

(b) repay to the creditor the credit provided and pay the interest

accrued on it, to be calculated on the basis of the borrowing

rate in the agreement, from the date the credit was drawn down

until the date it is repaid, without any undue delay and no later

than 30 calendar days after giving a notification in accordance

with sub-section (a),

provided that the creditor shall not be entitled to any other compensation

from the consumer in the event of withdrawal, except compensation for any

non-refundable charges paid by the creditor to any public administrative

body.

(4) Where an ancillary service relating to a consumer credit agreement is

provided by the creditor or by a third party on the basis of an agreement

between the third party and the creditor, the consumer shall not be bound by

the ancillary service agreement if the consumer exercises his right of

withdrawal in accordance with this section.

(5) By virtue of sub-sections (1) to (4), sections 9 and 13 of the Financial

Services (Distance Marketing) Act 2006 and article 5 of Council Directive

85/577/EEC as applied by section 42 of the Contract and Tort Act do not

apply.

Linked credit agreements: Right of consumer to pursue claim against

creditor

15.(1) Where the consumer has exercised a right of withdrawal concerning

a contract for the supply of goods or services, he shall no longer be bound

by a linked credit agreement.

(2) A consumer shall have the right to take action against the creditor for

the fulfilment of his claim where

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(a) in order to buy goods or obtain services, the consumer enters

into a credit agreement with a creditor other than the supplier

of such goods or services;

(b) the creditor and the supplier of the goods or services have a

pre-existing agreement where credit is made exclusively by that

creditor to customers of that supplier for the acquisition of

goods or services from that supplier;

pursuant to that pre-existing agreement;

(d) the goods or services covered by the linked-credit agreement

are not supplied, are supplied in part, or are not in conformity

with the contract for supply thereof; and

(e) the consumer has pursued his remedies against the supplier but

has failed to obtain the remedy to which he is entitled in whole

or in part.

(2) Sub-section (2) is without prejudice to any statutory provision or rule

of law relating to joint and several liability in respect of any claim which the

consumer may have against the supplier where the purchase of the goods or

services from the supplier has been financed by a credit agreement.

Right to early repayment.

16.(1) A consumer shall have the right to discharge his obligations under a

consumer credit agreement, in full or in part, before the time established in

the agreement.

(2) If the consumer pays the creditor before the time established by the

agreement

(a) the consumer shall be entitled to a reduction of total costs of

the credit consisting of the interest and the costs for the

remaining duration of the credit; and

(b) the creditor shall be entitled to a fair and objectively justified

compensation for possible costs directly linked to early

repayment of credit; provided that the early repayment falls

within a period for which the borrowing rate is fixed, and that

the compensation may not exceed

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(i) 1% of the amount of credit repaid early, if the period of

time between the early repayment and the agreed

termination of the credit agreement exceeds one year;

(ii) 0.5% of the amount of credit repaid early, if the period of

time between the early repayment and the agreed

termination of the credit agreement does not exceed one

year.

(3) The limitations under sub-section (2) in terms of the amount of

compensation which may be claimed by the creditor shall exceptionally not

apply if the creditor proves that the loss suffered from early repayment

exceeds the amount determined under sub-section (2).

(4) Compensation for early repayment under sub-section (2)(b) shall not

apply

(a) if the repayment has been made under an insurance contract

intended to provide a credit repayment guarantee;

(b) in the case of an overdraft facility;

rate is not fixed; or

(d) if the amount of early repayment does not exceed Euro 3,000

within any period of 12 months.

(5) A creditor may not claim compensation which is in excess of the

amount of interest which the consumer would have paid during the period

between the early repayment and the agreed date of termination of the credit

agreement.

(6) A consumer may claim a reduction to the compensation claimed by the

creditor if the compensation claimed exceeds the loss actually suffered. For

these purposes, the loss suffered shall consist of the difference between the

initial agreed interest rate and the interest rate at which the creditor can lend

out the money repaid early on the market at the time of early repayment.

Consideration shall also be given to the impact of early repayment on

administrative costs.

Rights relating to assignment of rights and set-off.

17.(1) Where the rights of the creditor under a credit agreement are

assigned to a third party, the consumer shall be entitled to raise against that

assignee any defence available to him against the original creditor. Such

defence may also include the right to set-off; provided that set-off may only

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be raised subject to the provisions of the Contract and Tort Act, which shall

apply irrespective of anything to the contrary contained in the credit

agreement.

(2) Where the rights of the credit are assigned as provided under sub-

section (1), the consumer is entitled to be informed of such assignment in

writing, except where the original creditor, by agreement with the assignee,

continues to service the credit towards the consumer.

Overrunning.

18.(1) Where a consumer enters into an agreement to open a current

account and the consumer is allowed an overrun, the agreement shall

contain information relating to

(a) the borrowing rate;

(b) the conditions governing the application of that rate;

rate;

(d) the charges applicable from the time the credit agreement is

concluded; and

(e) the conditions under which those charges may be changed, if

applicable.

(2) In the event of a significant overrunning exceeding a period of one

month, the creditor shall inform the consumer without delay, in writing or

on another durable medium of the

(a) overrunning;

(b) amount involved;

(d) penalties, charges or interests on arrears which are applicable.

(3) The information under sub-section (1) shall be in writing or on a

durable medium and provided on a regular basis.

PART VI

MISCELLANEOUS

Advertisements.

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2011-12

19.(1) Where a credit advertisement includes an interest rate or any figure

relating to the cost of the credit to the consumer, the advertisement shall also

include standard information by means of a representative example in

accordance with sub-section (2).

(2) The representative example referred to in sub-section (1) shall

comprise the following items of information

(a) the borrowing rate, whether fixed, variable or both;

(b) particulars of any charges included in the total charge for

credit;

(d) the annual percentage rate of charge;

(e) the duration of the agreement except where the agreement is

open ended;

(f) in the case of credit in the form of a deferred payment for

specific goods or services, the cash price and the amount of any

advance payment;

(g) if applicable, the total amount payable by the consumer;

(h) if applicable, the amount of each instalment for the repayment

of credit.

(3) The following provisions apply–

(a) a credit advertisement shall include a clear and concise

statement in respect of any obligation to enter into a contract in

respect of an ancillary service relating to the credit agreement,

in particular an insurance service, where

(i) the conclusion of that service is compulsory in order to

obtain the credit or to obtain it on the terms and

conditions advertised;

(ii) the cost of that service cannot be determined in advance;

(b) the obligation referred to in sub-section (1) shall be advertised

in a prominent way and accompanied by the annual percentage

rate of charge.

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2011-12

Cross border credit.

20.(1) A creditor from a Member State who intends to enter, or has entered,

into a credit agreement with a consumer in Gibraltar, shall have access

under the same conditions as a Gibraltarian creditor, to the databases which

are available in Gibraltar in order to assess the creditworthiness of the

consumer; provided that a request by a creditor for access to the said

database may be refused by the holder of the database if the information to

be provided is contrary to the public policy or public security of Gibraltar, or

is subject to protection under the Data Protection Act 2004.

(2) If the credit application is rejected on the basis of consultation of a

database, the creditor shall inform the consumer immediately and without

charge of the result of such consultation and of the particulars of the

database consulted.

Calculation of the annual percentage rate of charge.

21.(1) The annual percentage rate of charge means the total cost of credit to

the consumer, expressed as an annual percentage of the total amount of

credit.

(2) The annual percentage rate of charge, equating, on an annual basis, to

the present value of all commitments (drawdowns, repayments and charges),

future or existing, agreed by the creditor and the consumer, shall be

calculated in accordance with the mathematical formula set out in Part I of

Schedule 3.

(3) The following costs shall be included in the total cost of credit to the

consumer

(a) the costs of maintaining an account recording both payment

transactions and drawdowns;

(b) the costs of using a means of payment for both payment

transactions and drawdowns; and

(4) The costs at sub-section (3) shall not be included in the total cost of

credit to the consumer where the opening of the account is optional and the

costs of the account have been clearly and separately shown in the credit

agreement or in any other agreement made with the consumer.

(5) For the purpose of calculating the annual percentage rate of charge, the

total cost of the credit to the consumer shall be determined, with the

exception of any charges payable by the consumer for non compliance with

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2011-12

any of his commitments laid down in the credit agreement and charges other

than the purchase price which, for purchases of goods or services, he is

obliged to pay whether the transaction is effected in cash or on credit.

(6) The calculation of the annual percentage rate of charge shall be based

on the assumption that

(a) the credit agreement is to remain valid for the period agreed

and that the creditor and the consumer will fulfil their

obligations under the terms and by the dates specified in the

credit agreement;

(b) the borrowing rate and other charges will remain fixed in

relation to the initial level and will remain applicable until the

end of the credit agreement in the circumstance that the credit

agreement contains a clause allowing variations in the

borrowing rate and, where applicable, the charges contained in

the annual percentage rate of charge but are unquantifiable at

the time of calculation.

(7) Where necessary the additional assumptions set out in Part II of

Schedule 3 may be used in calculating the annual percentage rate of charge.

PART VII

FINAL PROVISIONS

Enforcement and monitoring.

22. It shall be the responsibility of the Director under this Act to

(a) monitor the working and effectiveness of this Act and take

such measures as the Director deems necessary in order to

ensure compliance with this Act;

(b) supervise the creditors and credit intermediaries in order to

ensure compliance by them with the obligations identified

under this Act;

diminished by any other enactment or rule of law.

Offences.

23.(1) Any person who contravenes or fails to comply with any of the

provisions of this Act shall be guilty of an offence.

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(2) Proceedings in respect of an offence against this Act shall be

commenced within three years from the commission of the offence.

(3) Any person guilty of an offence against this Act shall on conviction be

liable to a fine at level 5 on the standard scale.

(4) Any proceedings undertaken under this Act shall be without prejudice

to the right of the consumer to undertake any action to seek compensation

due to any loss or damage incurred by him as a result of the breach of this

Act.

Act to prevail.

24.(1) The provisions of this Act shall prevail and apply notwithstanding

anything to the contrary contained in any credit agreement entered into by

the consumer.

(2) Any waiver by the consumer of any of the rights granted to him by this

Act shall be null and void.

Application of existing law.

25.(1) Where there is a conflict between the provisions of this Act and the

Financial Services (Moneylenders) Act in respect of a credit agreement to

which this Act applies by virtue of section 4, the provisions of this Act shall

prevail.

(2) For the avoidance of doubt, the Financial Services (Moneylenders) Act

shall continue to apply in respect of a credit agreement to which this Act

does not apply by virtue of section 4.

(3) A licence granted to a moneylender under the Financial Services

(Moneylenders) Act shall clearly state whether the moneylender is

authorised to enter into credit agreements to which this Act applies, and any

such licence shall be granted subject to the provisions of this Act being

honoured at all times by the moneylender.

Continuity of the law.

26.(1) This Act shall only apply in relation to credit agreements that are

concluded after the coming into force of this Act.

(2) Notwithstanding subsection (1), sections 12(4) to (7), 13, 17, 18(2) and

18(3) apply to open-end credit agreements concluded prior to the coming

into force of this Act.

Regulations.

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2011-12

27.(1) The Minister may, by regulations, prescribe anything requiring to be

prescribed and generally do anything requiring to be done pursuant to the

provisions of this Act.

(2) Without prejudice to the generality of sub-section (1) the Minister

may, by regulations

(a) provide for applications for authorisations, fees, forms and

offences as he may deem appropriate in order to make better

provision for the execution of this Act;

(b) amend the Schedules;

condition subject to which an authorisation is granted has been

breached, including penalties, withdrawal or suspension of the

authorisation or other sanctions;

(d) make such provision as he deems appropriate to apply this Act,

or parts thereof, to credit agreements which provide for

arrangements to be agreed by the creditor and the consumer in

respect of deferred payment or repayment methods, where the

consumer is already in default on the initial credit agreement.

Codes of practice.

28.(1) The Director shall, with the prior consent of the Minister, cause to be

published in the form of codes of practice, statements setting out the criteria

and any variation in the criteria from time to time by reference to which the

Director proposes to exercise his functions under this Act.

(2) The Director shall, with the prior consent of the Minister, publish in

the form of codes of practice under this Act, criteria to facilitate compliance

in Gibraltar with the provisions of this Act.

(3) A code of practice published under this section shall be admissible in

evidence in any action commenced in connection with the operation of this

Act.

Alternative dispute resolution.

29.(1) Any dispute between parties to an agreement to which this Act

applies may be put to the Director for resolution.

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(2) For the purposes of this section, the Director may deal with the dispute

as if an arbitration agreement between the parties to the dispute to which the

Arbitration Act applies subsisted appointing him sole arbitrator.

Revocation.

30. The Financial Services (Moneylending) (Amendment) Regulations

2011 are revoked.

Financial Services (Consumer Credit)

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SCHEDULE 1

Section 7(2)

STANDARD EUROPEAN CONSUMER CREDIT INFORMATION

1. Identity and contact details of the creditor/credit intermediary.

Creditor [Identity]

Address [Geographical address to be used by

the consumer]

Telephone number (*)

E-mail address (*)

Fax number (*)

Web address

If applicable

Credit intermediary [Identity]

Address [Geographical address to be used by

the consumer]

Telephone number

E-mail address (*)

Fax number (*)

Wed address

(1) This information is optional for the creditor.

Wherever 'if applicable' is indicated, the creditor must fill in the box if the

information is relevant to the credit product or delete the respective

information or the entire row if the information is not relevant for the type

of credit considered.

Indications between square brackets provide explanations for the creditor

and must be replaced with the corresponding information.

2. Description of the main features of the credit product.

The type of credit

The total amount of credit

This means the ceiling or the total

sums made available under the

credit agreement.

The conditions governing the

drawdown

This means how and when you will

obtain the money.

The duration of the credit agreement

Instalments and, where appropriate,

the order in which instalments will

You will have to pay the following:

[The amount, number and frequency

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2011-12

be allocated of payments to be made by the

consumer]

Interest and/or charges will be

payable in the following manner:

The total amount you will have to

pay

This means the amount of borrowed

capital plus interest and possible

costs related to your credit.

[Sum of total amount of credit and

total cost of credit]

If applicable

The credit is granted in the form of a

deferred payment for a good or

service or is linked to the supply of

specific goods or the provision of a

service

Name of good/service

Cash price

If applicable

Sureties required

This is a description of the security

to be provided by you in relation to

the credit agreement

[Kind of sureties]

If applicable

Repayments do not give rise to

immediate amortisation of the

capital

Costs of the credit.

The borrowing rate or, if applicable,

different borrowing rates which

apply to the credit agreement

— fixed or,

— variable (with the index or

reference rate applicable

to the initial borrowing rate),

— periods],

Annual Percentage Rate of Charge

(APR)

This is the total cost expressed as an

annual percentage of the total

amount of credit.

The APR is there to help you

compare different offers.

[% A representative example

mentioning all the assumptions used

for calculating the rate to be set out

here]

Is it compulsory, in order to obtain

the credit or to obtain it on the terms

and conditions marketed, to take out

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2011-12

— an insurance policy securing the

credit, or

— another ancillary service contract,

If the costs of these services are not

known by the creditor they are not

included in the APR.

Yes/no [if yes, specify the kind of

insurance]

Yes/no [if yes, specify the kind of

ancillary service]

Related costs

If applicable

Maintaining one or more accounts is

required for recording both payment

transactions and drawdowns

If applicable

Amount of costs for using a specific

means of payment

(e.g. a credit card)

If applicable

Any other costs deriving from the

credit agreement

If applicable

Conditions under which the

abovementioned costs related to the

credit agreement can be changed

If applicable

Obligation to pay legal costs

Costs in the case of late payments

Missing payments could have severe

consequences for you (e.g. forced

sale) and make obtaining credit

more difficult.

You will be charged [……

(applicable interest rate and

arrangements for its adjustment and,

where applicable, default charges)]

for late payments.

4. Other important legal aspects.

Right of withdrawal

You have the right to withdraw from

the credit agreement within a period

of 14 calendar days.

Yes/no

Early repayment

You have the right to repay the

credit early at any time in full or

partially.

If applicable

The creditor is entitled to

compensation in the case of early

repayment

[Determination of the compensation

(calculation method) in accordance

with the provisions implementing

Article 16 of Directive 2008/48/EC]

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Consultation of a database

The creditor must inform you

immediately and without charge of

the result of a consultation of a

database, if a credit application is

rejected on the basis of such a

consultation. This does not apply if

the provision of such information is

prohibited by European Community

law or is contrary to objectives of

public policy or public security.

Right to a draft credit agreement

You have the right, upon request, to

obtain a copy of the draft credit

agreement free of charge. This

provision does not apply if the

creditor is at the time of the request

unwilling to proceed to the

conclusion of the credit agreement

with you.

If applicable

The period of time during which the

creditor is bound by the pre-

contractual information

This information is valid from …

until …

If applicable

5. Additional information in the case of distance marketing of financial

services.

(a) concerning the creditor

If applicable

Representative of the creditor in

your Member State of residence

Address

Telephone number (*)

E-mail address (*)

Fax number (*)

Web address (*)

[Identity]

[Geographical address to be used by

the consumer]

If applicable

Registration

[The trade register in which the

creditor is entered and his

registration number or an equivalent

means of identification in that

If applicable

The supervisory authority

(b) concerning the credit agreement

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If applicable

Exercise of the right of withdrawal

[Practical instructions for exercising

the right of withdrawal indicating,

inter alia, the period for exercising

the right, the address to which

notification of exercise of the right of

withdrawal should be sent and the

consequences of non-exercise of that

right]

If applicable

The law taken by the creditor as a

basis for the establishment of

relations with you before the

conclusion of the credit contract

If applicable

Clause stipulating the governing law

applicable to the credit agreement

and/or the competent court

[Relevant clause to be set out here]

If applicable

Language regime

Information and contractual terms

will be supplied in [specific

language]. With your consent, we

intend to communicate in [specific

language/languages] during the

duration of the credit agreement.

Existence of and access to out-of-

court complaint and redress

mechanism

[Whether or not there is an out-of-

court complaint and redress

mechanism for the consumer who is

party to the distance contract and, if

so, the methods of access to it]

(*) This information is optional for

the creditor.

Financial Services (Consumer Credit)

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SCHEDULE 2

Section 8(2)

EUROPEAN CONSUMER CREDIT INFORMATION FOR

(1) overdrafts

(2) consumer credit offered by certain credit organisations (Article 2(5)

of Directive 2008/48/EC)

(3) debt conversion

3. Identity and contact details of the creditor/credit intermediary.

Creditor

Address

Telephone number (*)

E-mail address (*)

Fax number (*)

Web address (*)

[Identity]

[Geographical address to be used by

the consumer]

If applicable

Credit intermediary

Address

Telephone number (*)

E-mail address (*)

Fax number (*)

Web address (*)

[Identity]

[Geographical address to be used by

the consumer]

(*) This information is optional for

the creditor.

Wherever 'if applicable' is indicated, the creditor must fill in the box if the

information is relevant to the credit product or delete the respective

information or the entire row if the information is not relevant for the type

of credit considered.

Indications between square brackets provide explanations for the creditor

and must be replaced with the corresponding information.

2. Description of the main features of the credit product.

The type of credit

The total amount of credit

This means the ceiling or the total

sums made available under the credit

agreement.

The duration of the credit agreement

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If applicable

You may be requested to repay the

amount of credit in

full on demand at any time.

3. Costs of the credit.

The borrowing rate or, if applicable,

different borrowing rates which

apply to the credit agreement

[ %

— fixed or,

— variable (with the index or

reference rate applicable to the initial

borrowing rate)],

If applicable

The annual percentage rate of charge

(APR) (*)

This is the total cost of credit

expressed as an annual percentage

of the total amount of credit. The

APR is there to help you compare

different offers.

[ % A representative example

mentioning all the assumptions used

for calculating the rate to be set out

here]

If applicable

Costs

If applicable

The conditions under which those

costs may be changed

[The costs applicable from the time

the credit agreement is concluded]

Costs in the case of late payments You will be charged [……

(applicable interest rate and

arrangements for its adjustment and,

where applicable,

default charges)] for late payments.

(*) Not applicable to European

Consumer Credit Information for

overdrafts in those Member States

which decide on the basis of

Article 6(2) of Directive 2008/48/EC

that the APR need not be provided

for overdrafts.

4. Other important legal aspects.

Termination of the credit agreement [The conditions and procedure for

terminating the credit agreement]

Consultation of a database

The creditor must inform you

immediately and without charge of

the result of a consultation of a

database if a credit application is

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rejected on the basis of such a

consultation. This does not apply if

the provision of such information is

prohibited by European Community

law or is contrary to objectives of

public policy or public security.

If applicable

The period of time during which the

creditor is bound by the pre-

contractual information

This information is valid from …

until…

If applicable

5. Additional information to be given where the pre-contractual

information is provided by certain credit organisations (Article 2(5) of

Directive 2008/48/EC or relates to a consumer credit for debt

conversion.

Instalments and, where appropriate,

the order in which instalments will

be allocated

You will have to pay the following:

[Representative example of an

instalment table including the

amount, number and frequency of

payments to be made by the

consumer]

The total amount you will have to

pay

Early repayment

You have the right to repay the

credit early at any time in full or

partially.

If applicable

The creditor is entitled to

compensation in the case of early

repayment

[Determination of the compensation

(calculation method) in accordance

with the provisions implementing

Article 16 of Directive 2008/48/EC]

If applicable

6. Additional information to be given in the case of distance marketing

of financial services.

(a) concerning the creditor

If applicable

Representative of the creditor in

your Member State of residence

Address

Telephone number (*)

E-mail address (*)

[Identity]

[Geographical address to be used by

the consumer]

Financial Services (Consumer Credit)

2011-12

Fax number (*)

Web address (*)

If applicable

Registration

[The trade register in which the

creditor is entered and his

registration number or an equivalent

means of identification in that

If applicable

The supervisory authority

(b) concerning the credit agreement

Right of withdrawal

You have the right to withdraw from

the credit agreement within a period

of 14 calendar days.

If applicable

Exercise of the right of withdrawal

Yes/no

[Practical instructions for exercising

the right of withdrawal indicating,

inter alia, the address to which

notification of exercise of the right of

withdrawal should be sent and the

consequences of non-exercise of that

right]

If applicable

The law taken by the creditor as a

basis for the establishment of

relations with you before the

conclusion of the credit contract

If applicable

Clause stipulating the law applicable

to the credit agreement and/or the

competent court

[Relevant clause to be set out here]

If applicable

Language regime

Information and contractual terms

will be supplied in [specific

language]. With your consent, we

intend to communicate in [specific

language/languages] during the

duration of the credit agreement.

Existence of and access to out-of-

court complaint and redress

mechanism

[Whether or not there is an out-of-

court complaint and redress

mechanism for the consumer who is

party to the distance contract and, if

so, the methods of access to it]

(*) This information is optional for

the creditor.

Financial Services (Consumer Credit)

2011-12

SCHEDULE 3

Section 21(2) and (7)

PART I

The basic equation expressing the equivalence of drawdowns on the one

hand and repayments and charges on the other.

The basic equation, which establishes the annual percentage rate of charge

(APR), equates, on an annual basis, the total present value of drawdowns on

the one hand and the total present value of repayments and payments of

charges on the other hand, i.e. –

where -

— X is the APR,

— m is the number of the last drawdown,

— k is the number of a drawdown, thus 1 ≤ k ≤ m,

— Ck is the amount of drawdown k,

— tk is the interval, expressed in years and fractions of a year, between the

date of the first drawdown and the date of each subsequent drawdown, thus

t1 = 0,

— m’ is the number of the last repayment or payment of charges,

— l is the number of a repayment or payment of charges,

— Dl is the amount of a repayment or payment of charges,

— S

l is the interval, expressed in years and fractions of a year, between the

date of the first drawdown and the date of each repayment or payment of

charges.

Remarks

Financial Services (Consumer Credit)

2011-12

(a) The amounts paid by both parties at different times shall not

necessarily be equal and shall not necessarily be paid at equal

intervals.

(b) The starting date shall be that of the first drawdown.

expressed in years or in fractions of a year. A year is presumed

to have 365 days (or 366 days for leap years), 52 weeks or 12

equal months. An equal month is presumed to have 30,41666

days (i.e. 365/12) regardless of whether or not it is a leap year.

(d) The result of the calculation shall be expressed with an

accuracy of at least one decimal place. If the figure at the

following decimal place is greater than or equal to 5, the figure

at that particular decimal place shall be increased by one.

(e) The equation can be rewritten using a single sum and the

concept of flows (AO, which will be positive or negative, in

other words either paid or received during periods 1 to k,

expressed in years, i.e. -

S being the present balance of flows. If the aim is to maintain the

equivalence of flows, the value will be zero.

PART II

Additional assumptions for the calculation of the annual percentage

rate of charge.

1. The additional assumptions for the calculation of the annual percentage

rate of charge shall be as follows–

(a) if a credit agreement gives the consumer freedom of

drawdown, the total amount of credit shall be deemed to be

drawn down immediately and in full;

(b) if a credit agreement gives the consumer freedom of drawdown

in general but imposes, amongst the different ways of

drawdown, a limitation with regard to the amount of credit and

period of time, the amount of credit shall be deemed to be

Financial Services (Consumer Credit)

2011-12

drawn down on the earliest date provided for in the credit

agreement and in accordance with those drawdown limits;

different charges or borrowing rate, the total amount of credit

shall be deemed to be drawn down at the highest charge and

borrowing rate applied to the most common drawdown

mechanism for this type of credit agreement;

(d) in the case of an overdraft facility, the total amount of credit

shall be deemed to be drawn down in full and for the whole

duration of the credit agreement. If the duration of the overdraft

facility is not known, the annual percentage rate of change shall

be calculated on the assumption that the duration of the credit

is 3 months;

(e) in the case of an open-end credit agreement, other than an

overdraft facility, it shall be assumed that–

(i) the credit is provided for a period of 1 year starting from

the date of the initial drawdown, and that the final

payment made by the consumer clears the balance of

capital, interest and other charges, if any,

(ii) the capital is repaid by the consumer in equal monthly

payments, commencing 1 month after the date of the

initial drawdown. However, in cases where the capital

must be repaid only in full, in a single payment, within

each payment period, successive drawdowns and

repayments of the entire capital by the consumer shall be

assumed to occur over the period of 1 year. Interest and

other charges shall be applied in accordance with those

drawdowns and repayments of capital and as provided

for in the credit agreement,

for the purposes of this subparagraph, an open-end credit

agreement is a credit agreement without fixed duration and

includes credits which must be repaid in full within or after a

period but, once repaid, become available to be drawn down

again;

(f) in the case of credit agreements other than overdrafts and open-

end credits as referred to in the assumptions set out in

subparagraphs (d) and (e)–

(i) if the date or amount of a repayment of capital to be

made by the consumer cannot be ascertained, it shall be

assumed that the repayment is made at the earliest date

Financial Services (Consumer Credit)

2011-12

provided for in the credit agreement and is for the lowest

amount for which the credit agreement provides,

(ii) if the date of conclusion of the credit agreement is not

known, the date of the initial drawdown shall be assumed

to be the date which results in the shortest interval

between that date and the date of the first payment to be

made by the consumer;

(g) where the date or amount of a payment to be made by the

consumer cannot be ascertained on the basis of the credit

agreement or the assumptions set out in subparagraphs (d), (e)

or (f) it shall be assumed that the payment is made in

accordance with the dates and conditions required by the

creditors and, when these are unknown–

(i) interest charges are paid together with the repayments of

capital,

(ii) a non-interest charge expressed as a single sum is paid at

the date of the conclusion of the credit agreement,

(iii) non-interest charges expressed as several payments are

paid at regular intervals, commencing with the date of

the first repayment of capital, and if the amount of such

payments is not known they shall be assumed to be equal

amounts,

(iv) the final payment clears the balance of capital, interest

and other charges, if any;

(h) if the ceiling applicable to the credit has not yet been agreed,

that ceiling is assumed to be EUR 1,500;

(i) if different borrowing rates and charges are offered for a

limited period or amount, the borrowing rate and the charges

shall be deemed to be the highest rate for the whole duration of

the credit agreement;

(j) for consumer credit agreements for which a fixed borrowing

rate is agreed in relation to the initial period, at the end of

which a new borrowing rate is determined and subsequently

periodically adjusted according to an agreed indicator, the

calculation of the annual percentage rate shall be based on the

assumption that, at the end of the fixed borrowing rate period,

the borrowing rate is the same as at the time of calculating the

annual percentage rate, based on the value of the agreed

indicator at the time.