The Consumer Credit (Total Charge for Credit) Regulations 1980

PART II TOTAL CHARGE FOR CREDIT

Total charge for credit

3.  For the purposes of the Act, the total charge for the credit which may be provided under an actual or prospective agreement shall be the total of the amounts determined as at the date of the making of the agreement of such of the charges specified in regulation 4 below as apply in relation to the agreement but excluding the amount of the charges specified in regulation 5 below.

Items included in total charge for credit

4.  Except as provided in regulation 5 below, the amounts of the following charges are included in the total charge for credit in relation to an agreement:—

(a) the total of the interest on the credit which may be provided under the agreement; and

(b) other charges at any time payable under the transaction by or on behalf of the debtor or a relative of his whether to the creditor or any other person,

notwithstanding that the whole or part of the charge may be repayable at any time or that the consideration therefor may include matters not within the transaction or subsisting at a time not within the duration of the agreement.

Items excluded from total charge for credit

5.—(1) The amounts of the following items are not included in the total charge for credit in relation to an agreement:—

(a) any charge payable under the transaction to the creditor upon failure by the debtor or a relative of his to do or to refrain from doing anything which he is required to do or to refrain from doing, as the case may be;

(b) any charge—

(i) which is payable by the creditor to any person upon failure by the debtor or a relative of his to do or to refrain from doing anything which he is required under the transaction to do or to refrain from doing, as the case may be, and

(ii) which the creditor may under the transaction require the debtor or a relative of his to pay to him or to another person on his behalf;

(c) any charge relating to an agreement which is an agreement to finance a transaction of a description referred to in paragraph (a) or (b) of section 11(1) of the Act, being a charge which would be payable if the transaction were for cash;

(d) any charge not within sub-paragraph (c) above—

(i) of a description which relates to services or benefits incidental to the agreement and also to other services or benefits which may be supplied to the debtor, and

(ii) which is payable pursuant to an obligation incurred by the debtor under arrangements effected before he applies to enter into the agreement, not being arrangements under which the debtor is bound to enter into any personal credit agreement;

(e) subject to paragraph (2) below, any charge under arrangements for the care, maintenance or protection of any land or goods;

(f) charges for money transmission services relating to an arrangement for a current account whereby the debtor may, by cheques or similar orders payable to himself or to any other person, obtain or have the use of money held or made available by the creditor and which records alterations in the financial relationship between the creditor and debtor, being charges which vary with the use made by the debtor of the arrangement.

(g) a premium under a contract of insurance made before the debtor applies to enter into the agreement;

(h) a premium under a contract of insurance in respect of risks relating to the use of a motor vehicle;

(i) a premium under a contract of life insurance where the policy monies payable under the contract are, under the transaction, to be used for the repayment of the credit or of the total charge for credit;

(j) a premium under a contract of insurance the making or maintenance of which is not required by the creditor as a condition of the making of the agreement;

(k) a premium under a contract of insurance against loss of, or damage to, land or to land and goods, being a contract which—

(i) is to be made or maintained by the debtor in a case where the agreement finances the acquisition by the debtor of an estate or interest in the land, and

(ii) is required by another person (not being the creditor) having an estate or interest in the land to be made or maintained with a person specified by him;

(l) subject to paragraph (2)(b) below, a premium under any other contract of insurance.

(2) Paragraph (1) above has effect only—

(a) in the case of a charge within sub-paragraph (e), where, in pursuance of the arrangements—

(i) the services are to be performed if, after the date of the making of the agreement, the condition of the land or goods becomes or is in immediate danger of becoming such that the land or goods cannot reasonably be enjoyed or used, and

(ii) the charge will not accrue unless the services are performed; and

(b) in the case of any other charge within sub-paragraph (e) and of any charge within sub-paragraph (l)—

(i) where provision of substantially the same description as that to which the arrangements or contract of insurance relate is available under comparable arrangements from a person who is not the creditor or a supplier or a credit-broker who introduced the debtor and the creditor, and

(ii) where the arrangements or contract of insurance are made with a person chosen by the debtor, and

(iii) if, in accordance with the transaction, the consent of the creditor or of a supplier or of the credit-broker who introduced the debtor and the creditor is required to the making of the arrangements or contract of insurance, where the transaction provides that such consent may not be unreasonably withheld whether because no incidental benefit will or may accrue to the creditor or to the supplier or to the credit-broker or on any other ground;

and references in this paragraph to the creditor, a supplier and a credit-broker include references to his near relative, his partner and a member of a group of which he is a member, to any person nominated by him or any such person in relation to the arrangements or the contract of insurance, and to a near relative of his partner; and “near relative” means, in relation to any person, the husband, wife, father, mother, brother, sister, son or daughter of that person and “group” means the person (including a company) having control of a company together with all the companies directly or indirectly controlled by him.