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  • Disclosure to Individual Customers: Initial Disclosure Requirements of Key Terms

    • BC-3.1.17

      Licensees must make clear to potential customers, prior to entering into a credit agreement, all relevant key terms of the agreement in the credit application and 'key terms disclosure' document, in order for them to clearly understand the characteristics of the services and products on offer. Licensees must also comply with the disclosure requirements under the "Code of Best Practice on Consumer Credit and Charging" (see Appendix CM-1).

      January 2014

    • BC-3.1.18

      The above "key terms disclosure" document must be summarised in plain English and Arabic. This document must be signed and dated by the customer(s) in duplicate as having been read and understood, prior to signing a credit agreement. One copy should be retained by the customer and the other must be retained by the licensee in their customer file.

      January 2014

    • BC-3.1.19

      For credit agreements where a retailer extends credit to purchase goods or services by operating in agreement with licensees, all conditions of the credit agreement must be disclosed in the credit agreement application and 'key terms disclosure' document, including when interest will begin to accrue, along with information on any indirect charges.

      January 2014

    • BC-3.1.20

      Credit agreements, referred to in Paragraph BC-3.1.19, must be finalised with an employee of the licensee, whether located at the premises of the retailer or at the premises of the licensee providing the credit. Profit/interest must in no event be charged before the disbursement of funds.

      January 2014

    • BC-3.1.21

      Licensees must inform the customers on the nature of their contractual relationship with the retail outlet and the customers' rights arising as a result of this relationship.

      January 2014

    • BC-3.1.22

      In addition to the initial disclosure of key terms noted in Paragraphs BC-3.1.17 to BC-3.1.21, the "key terms disclosure" document must, at the time of signing the credit agreement, amongst other things, make clear:

      (a) The detailed breakdown of the payments:
      (i) The principal amount being borrowed, the profit/interest per month and the maturity of the credit agreement;
      (ii) The net amount provided to the customer after deducting or applying any upfront or other charges;
      (iii) The total profit/interest payments and principal repayment for the term of the credit agreement; and
      (iv) The total administration/handling fees and all details of any other fees and charges spread over the term of the credit agreement;
      (b) The APR and annual nominal rate as defined in Paragraphs BC-3.1.10 and BC-3.1.4(d) respectively;
      (c) Whether the rate of profit/interest is fixed or can be varied, and under what circumstances;
      (d) The basis on which profit/interest is charged (e.g. actual reducing balance) and applied to the account (e.g. monthly or quarterly compounding) and whether principal repayments are taken into account in the calculation, together with an illustration of the calculation method;
      (e) The detailed costs associated with "top-ups" of credit agreements or other alternative arrangements for extending additional credit or early repayments, whether partial or full, of amounts due including the treatment of remaining profit/interest and the payment of premium for insurance;
      (f) Any late payment charges;
      (g) The annual profit/interest rate and credit limit being offered for credit agreements such as credit cards; and
      (h) Any other charges related to the credit agreement not included above all details of which must be provided to the customer.
      Amended: January 2019
      January 2014

    • BC-3.1.23

      Licensees are free to design the layout and wording to be used in their 'key terms disclosure' document, as they see fit, providing they contain the information specified in Paragraph BC-3.1.22. The CBB will monitor compliance with the spirit as well as the letter of the requirements in this Chapter.

      January 2014