CONSUMER CREDIT PART I PRELIMINARY Citation, commencement, interpretation and revocation 1 1 These Regulations may be cited as the Consumer Credit (Advertisements) Regulations 1989 and shall come into force on 1st February 1990. 2 In these Regulations, unless the context otherwise requires:— “ the Act ” means the Consumer Credit Act 1974; “advance payment” includes any deposit but does not include a repayment of credit or any insurance premium or any amount entering into the total charge for credit; “the APR ” means the annual percentage rate of charge for credit determined in accordance with the Total Charge for Credit Regulations and Schedule 3 to these Regulations; “cash price” in relation to any goods, services, land or other things means the price or charge at which the goods, services, land or other things may be purchased by, or supplied to, persons for cash, account being taken of any discount generally available from the dealer or supplier in question; “cash purchaser” means, in relation to any advertisement, a person who, for a money consideration— acquires goods, land or other things; or is provided with services, under a transaction which is not financed by credit; “Consumer credit tables” means tables contained in Parts 1 to 15 of “Consumer credit tables” published in 1977 by Her Majesty’s Stationery Office as modified by Correction Slips so published in December 1978 (being tables calculated in accordance with the principles set out in the Total Charge for Credit Regulations); “contract of insurance” means a contract of insurance to which the Insurance Companies Act 1982 applies; “credit advertisement” means an advertisement to which Part IV of the Act applies by virtue of it falling within section 43(1)(a) or which falls within section 151(1) of the Act in so far as section 44 is applied to such an advertisement; “current account” means an account under which the customer may, by means of cheques or similar orders payable to himself or to any other person or by any other means, obtain or have the use of money held or made available by the person with whom the account is kept and which records alterations in the financial relationship between the said person and the customer; “dealer” means, in relation to a hire-purchase, credit sale or conditional sale agreement under which he is not the creditor, a person who sells or proposes to sell goods, land or other things to the creditor before they form the subject matter of any such agreement and, in relation to any other agreement, means a supplier or his agent; “hire advertisement” means an advertisement to which Part IV of the Act applies by virtue of it falling within section 43(1)(b) or which falls within section 151(1) of the Act in so far as section 44 is applied to such an advertisement; “hire payment” means any payment to be made by a person in relation to any period in consideration of the bailment to him of goods, other than an advance payment; “identified dealer” means, in relation to an advertisement— a dealer who is named in the advertisement or is identified in it by reference to a business connection he has with the advertiser; or a dealer upon whose premises the advertisement is published; “premises” includes any place, stall, vehicle, vessel, aircraft or hovercraft at which a person is carrying on any business (whether on a permanent or temporary basis); “supplier” has the meaning assigned to it by section 189(1) of the Act, except that it does not include, in relation to a hire-purchase, credit sale or conditional sale agreement, a creditor to whom goods, land or other things are sold or proposed to be sold by a dealer before becoming the subject matter of such an agreement; “total charge for credit” shall be determined in accordance with the Total Charge for Credit Regulations and Schedule 3 to these Regulations; and “the Total Charge for Credit Regulations” means the Consumer Credit (Total Charge for Credit) Regulations 1980 . 3 Any reference in these Regulations to bailment is in Scotland a reference to hiring. 4 In these Regulations, references to repayment of credit are references to repayment of credit with or without any other amount. 5 In these Regulations, any reference to the name of any person is— a in the case of any person covered by a standard licence, a reference to any name of his specified in the licence; and b in the case of any other person, a reference to any name under which he carries on business. 6 Where any expression is used in these Regulations and in the Act, for the purposes of these Regulations that expression shall be construed as if in the Act (except section 8) references to consumer credit agreements and to regulated agreements (being consumer credit agreements) included references to personal credit agreements. 7 The Regulations specified in Schedule 4 to these Regulations are hereby revoked to the extent specified in the third column of that Schedule. PART II FORM AND CONTENT OF ADVERTISEMENTS General rules 2 1 The person who causes any credit advertisement to be published shall ensure that, subject to the following provisions of these Regulations, every such advertisement is:— a a simple credit advertisement that is to say a credit advertisement containing only the information set out in paragraphs 1 to 5 of Part I of Schedule 1 to these Regulations in whole or in part and any other information referred to in paragraph 6; b an intermediate credit advertisement that is to say a credit advertisement containing only the information set out in paragraphs 1 to 9 of Part II ofSchedule 1 and no other information except as referred to in paragraph 10; c a full credit advertisement that is to say a credit advertisement containing, subject to sub-paragraph (d) below, at least the information set out in Part III of Schedule 1; or d a full credit advertisement which invites individuals (being individuals who, at the date the advertisement is published, are debtors under agreements made with the advertiser) to agree to a specified variation of those agreements, containing— i the name of the advertiser and a postal address of his and the information within Part III of Schedule 1 as varied in relation to those agreements if the invitation is accepted by the debtor; and ii the information, other than the name and a postal address of the advertiser, specified in that Part which the advertisement does not indicate will remain unaltered if the invitation is accepted. 2 The person who causes any hire advertisement to be published shall ensure that, subject to the following provisions of these Regulations, every such advertisement is— a a simple hire advertisement that is to say a hire advertisement containing only the information set out in paragraphs 1 to 5 of Part I of Schedule 2 to these Regulations in whole or in part and any other information referred to in paragraph 6; b an intermediate hire advertisement that is to say a hire advertisement containing only the information set out in paragraphs 1 to 7 of Part II of Schedule 2 and no other information except as referred to in paragraph 8; c a full hire advertisement that is to say a hire advertisement containing, subject to sub-paragraph (d) below, at least the information set out in Part III ofSchedule 2, but not containing the expression “no deposit” or any expression to the like effect, except where no advance payments are to be made by the hirer; or d a full hire advertisement which invites individuals (being individuals who, at the date the advertisement is published, are hirers under agreements made with the advertiser) to agree to a specified variation of these agreements, containing:— i the name of the advertiser and a postal address of his and the information within Part III of Schedule 2 as varied in relation to the hire facility if the invitation is accepted by the hirer; and ii the information, other than a name and postal address of the advertiser, specified in that Part which the advertisement does not indicate will remain unaltered if the invitation is accepted; but not containing the expression “no deposit” or any expression to the like effect, except where no advance payments are to be made by the hirer. 3 In the case of an advertisement relating to a debtor-creditor agreement enabling the debtor to overdraw on a current account under which the creditor is the Bank of England, an institution authorised under the Banking Act 1987 , the Post Office for the purposes of a transaction entered into in the ordinary course of that part of the business of the Post Office which consists of the provision of banking services or a building society incorporated (or deemed to be incorporated) under the Building Societies Act 1986 , for any reference in Schedule 1 to these Regulations to the APR there may be substituted a reference to the statement of— a a rate, expressed to be a rate of interest, being a rate determined as the rate of the total charge for credit calculated on the assumption that only interest is included in the total charge for credit; and b the nature and amount of any other charge included in the total charge for credit. 4 Paragraphs 6 and 7 of Part II, and paragraph 6 of Part III, of Schedule 1 to these Regulations do not apply to an advertisement in so far as it relates to fixed-sum credit to be provided under a debtor-creditor-supplier agreement, where the cash price of the goods, services, land or other things to be supplied under a transaction financed by the agreement does not exceed £50. 5 The APR referred to in Schedule 1 to these Regulations shall be denoted in advertisements as “APR” or “annual percentage rate” or “annual percentage rate of the total charge for credit”. 6 The specific information referred to in Schedules 1 and 2 to these Regulations in every credit advertisement or hire advertisement shall be clear and easily legible and, subject to the following provisions of these Regulations and except for the name and address or telephone number, shall be shown together as a whole. 7 Any information in any book, catalogue, leaflet or other document which is likely to vary from time to time shall be taken for the purpose of paragraph (6) above to be shown together as a whole if— a it is set out together as a whole in a separate document issued with the book, catalogue, leaflet or other document; and b the other information in the credit advertisement or hire advertisement as the case may be is shown together as a whole in the book, catalogue, leaflet or other document. Representative terms 3 1 Where in any advertisement relating to credit to be provided under a consumer credit agreement or relating to a consumer hire agreement as the case may be— a the advertisement refers to transactions of a particular class; and b any item of information mentioned in paragraph (2) below which applies in relation to one transaction of a particular class differs from an item of the like information which applies in relation to another transaction of the same class, there may be substituted for such an item in the advertisement representative information together with an indication that the information is representative information. 2 The items of information referred to in paragraph (1)(b) above are— a the APR in an intermediate credit advertisement or a full credit advertisement; or b the cash price and the frequency, number or amount of any payment or charge included in Parts II and III of Schedules 1 and 2 to these Regulations or of any repayment of credit in any full credit advertisement, and the total amount payable by the debtor in any full credit advertisement including its constituent parts. 3 In this Regulation “representative information” means information shown as a typical example which the advertiser may reasonably expect at the date the information is published to be representative of transactions of the class in question, being transactions which he might then reasonably contemplate that he would enter into on or after that date. PART III SPECIAL PROVISIONS FOR CREDIT ADVERTISEMENTS Credit advertisements in dealers' publications covering a calendar or seasonal period 4 1 Regulations 2 and 3 above shall not apply to a credit advertisement contained in, or in a separate document issued with, a publication published by or on behalf of a dealer which relates to goods or services which may be sold or supplied by him in a calendar or seasonal period specified in the publication if the advertisement contains the information specified in paragraph (2) below and no other indication that a person is willing to provide credit. 2 The information referred to in paragraph (1) above is— a the name of the creditor, credit-broker or dealer and a postal address of his with or without his occupation or a statement of the general nature of his occupation; and b an indication that individuals may obtain on request a quotation in writing about the terms on which the advertiser is prepared to do business. Full credit advertisements in dealers' publications 5 Information contained in a full credit advertisement relating to credit to be provided under a debtor-creditor-supplier agreement, being an advertisement contained in a publication published by or on behalf of a dealer which relates to goods or services which may be sold or supplied by him, shall be taken for the purposes of regulation 2(6) above to be shown together as a whole— a if— i the cash price alone; or ii the cash price, any advance payment and the information specified in paragraphs 12 to 14 of Part III of Schedule 1 to these Regulations, and (except in the case of agreements for credit under which the total amount payable by the debtor is not greater than the cash price of the goods or services, the acquisition of which is to be financed by credit under the agreement) the APR is clearly indicated in close proximity to every description of, or specific reference to, goods or services to which the information in the publication relates; b if the remaining information in the advertisement is so presented as to be readily comprehensible as a whole by a prospective debtor and an indication is given in close proximity to any of that information that it relates to all or specified descriptions of goods or services; and c if, except as mentioned in paragraph (a) above, no information relating to the provision of credit is shown together with the cash price. Credit advertisements on the premises of a dealer 6 1 This regulation applies to an advertisement which does not contain either— a the cash price alone; or b each of the cash price, the information about the APR specified in sub-paragraphs (a) to (c) of paragraph 7 in Part II of Schedule 1 to these Regulations and the information about the total amount payable by the debtor specified in paragraph 14 in Part III of that Schedule, but which would otherwise be an intermediate credit advertisement or a full credit advertisement. 2 Subject to paragraph (3) below, an advertisement to which this regulation applies— a which is conspicuously displayed on any part of the premises of a dealer; and b which specifies goods or services the acquisition of which from that dealer may be financed by credit and which may be acquired from that part of those premises, shall be treated as complying with these Regulations if the information in paragraph (1)(a) or (b) above as the case may be— i in the case of goods, is clearly marked on or displayed in close proximity to the goods; and ii in the case of services, is displayed at any place on the premises at which customers may enquire about them, with an indication that other information relating to the supply of goods or services on credit is displayed on the premises but without any other information indicating that the goods or services are available on credit. 3 An advertisement to which this regulation applies by virtue of paragraph (1)(b) above shall not be treated as complying with these Regulations by virtue of paragraph (2) above unless the total amount payable by the debtor in respect of the goods or services specified in the advertisement as goods or services the acquisition of which from the dealer in question may be financed by credit is also in the case of goods clearly marked on or displayed in close proximity to the goods and, in the case of services, displayed at any place on the premises at which customers may enquire about them, the total amount payable in the case of an agreement for running-account credit being calculated on each of the following assumptions:— a the debtor is provided with an amount of credit equal to the cash price of the goods or services less any advance payment required; b there are no changes in the rates of interest on the credit which may be provided under the agreement; c the debtor pays the amount stated in the advertisement or if none is stated the fixed or minimum sums payable under the agreement; d all repayments of credit and of the total charge for credit are made on the due date under the agreement; and e the debtor acquires no further goods or is provided with no further services under the agreement. Restrictions on certain expressions in credit advertisements 7 A credit advertisement shall not include— a the word “overdraft” or any cognate expression as describing any agreement for running-account credit except an agreement enabling the debtor to overdraw on a current account; b any indication whether express or implied that any of the terms of a credit agreement impose on customers a lesser expense or obligation than is being imposed by other persons, except in the case of a full credit advertisement which states, in close proximity to that indication with no less particularity and prominence, the other persons concerned and their comparable terms; c the expression “interest free” or any expression to the like effect indicating that a customer is liable to pay no greater amount in respect of a transaction financed by credit than he would be liable to pay as a cash purchaser in relation to the like transaction, except where the total amount payable by the debtor does not exceed the cash price; or d the expression “no deposit” or any expression to the like effect, except where no advance payments are to be made. Prominence to be afforded to the APR in credit advertisements and wording of prescribed information 8 1 The APR referred to in Schedule 1 to these Regulations shall be afforded in every credit advertisement— a greater prominence than a statement relating to any other rate of charge; and b no less prominence than a statement relating to— i any period; ii the amount of any advance payment or any indication that no such payment is required; or iii the amount, number or frequency of any other payments or charges (other than the cash price of goods, services, land or other things) or of any repayments of credit. 2 Where words are shown in capital letters in any prescribed form of statement set out in Schedule 1 or 2 to these Regulations and are reproduced in an advertisement they shall be afforded no less prominence than any other information relating to credit or bailment of goods which is required or permitted to be included under these Regulations in the advertisement except the APR. PART IV GENERAL Application of Regulations 9 1 These Regulations do not apply to any advertisement which a whether expressly or by implication indicates clearly that a person is willing— i to provide credit; or ii to enter into an agreement for the bailment of goods, for the purposes of a person’s business; and b does not indicate (whether expressly or by implication) that a person is willing to do either of those things otherwise than for the purposes of such a business. 2 References in paragraph (1) above to a business do not include references to a business carried on by the advertiser or any person acting as a credit-broker in relation to the credit or hire facility to which the advertisement relates. Transitional provisions 10 1 Subject to paragraph (2) below, a person shall not be guilty of an offence under section 47(1) or 167 of the Act for contravention of these Regulations if the advertisement would have complied with the requirements of the Consumer Credit (Advertisements) Regulations 1980 if those Regulations had not been revoked by these Regulations. 2 This regulation only applies to advertisements published in a catalogue, diary or work of reference comprising at least 50 printed pages— a of which copies are first published, or made available for publication in the ordinary course of business, before 1st May 1990; and b which in a reasonably prominent position either contains the date of its first publication or specifies a period, being a calendar or seasonal period, throughout which it is intended to have effect. Francis Maude Parliamentary Under-Secretary of State, Department of Trade and Industry 5th July 1989