Financial Services (Consumer Credit) Act 2011

Link to law: http://www.gibraltarlaws.gov.gi/articles/2011-12o.pdf
Published: 2011-02-16

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I ASSENT Financial Services (Consumer Credit)
© Government of Gibraltar (www.gibraltarlaws.gov.gi)
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)
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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)
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2011-12
Financial Services (Consumer Credit)
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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

(c) concludes credit agreements with consumers on behalf of the
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;

(c) involving a total amount of credit less than Euro 200 or more
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;

(c) disclose the fee, if any, payable by the consumer to the credit
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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(c) the total amount of credit to be provided under the agreement
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

(c) the total amount payable by the consumer.
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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;

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

(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;

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

(c) where capital amortisation of a credit agreement with a fixed
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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(c) the total amount of the credit and the conditions governing the
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;

(c) inform the consumer of the amount of the payments to be made
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

(c) information concerning the new reference rate is also kept
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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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;

(c) the consumer referred to in paragraph (a) obtains his credit
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;

(c) if the repayment falls within a period for which the borrowing
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;

(c) the index or reference rate applicable to the initial borrowing
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;

(c) borrowing rate; and

(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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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;

(c) the total amount of 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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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

(c) other costs relating to payment transactions.

(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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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;

(c) ensure that the rights granted to consumers by this Act are not
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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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;

(c) make such provision as he deems appropriate in cases where a
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.

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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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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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-
— 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
register]
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.
(c) concerning redress
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.




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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]
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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
register]
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.
(c) concerning redress
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.


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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

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(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.

(c) Intervals between dates used in the calculations shall be
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
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drawn down on the earliest date provided for in the credit
agreement and in accordance with those drawdown limits;

(c) if a credit agreement provides different ways of drawdown with
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
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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.