The following extracts are taken from the Consumer Credit Sourcebook.
I am listing these as background information for people considering complaining about having to agree to a secured loan at the end of an IVA. This is not a complete set of the CONC rules relating to secured lending
CONC 5.2.2 R
(1) Before entering into a regulated credit agreement which is excluded from CONC 5.2.1 R (see (4), (5) and (6)), a firm must carry out an assessment of the potential for the commitments under the agreement to adversely impact the customer’s financial situation, taking into account the information of which the firm is aware at the time the agreement is to be made.
(3) A firm must consider sufficient information to enable it to make a reasonable creditworthiness assessment or a reasonable assessment required by (1).
The extent and scope of the creditworthiness assessment or the assessment required by CONC 5.2.2 R (1), in a given case, should be dependent upon and proportionate to factors which may include one or more of the following:
Before a regulated credit agreement secured on land is entered into:
(1) the firm should consider the adequate explanations it should give to the customer under CONC 4.2; and
(2) the firm is required under CONC 5.2.2 R (1) to assess the potential for commitments under the agreement to adversely impact the customer’s financial situation.
In accordance with PRIN 9 (customer: relationships of trust):
(1) a firm must take reasonable steps to ensure the suitability of its advice, which would include acting in the best interests of a customer where the firm makes a recommendation;
(2) if it appears to the firm that entering into a regulated credit agreement secured on land is not in the best interests of the customer, that fact should be made clear to the customer; and
(3) the firm should encourage the customer to consider whether the credit can be afforded, including in the event the customer’s circumstances change, for example, through a change in employment or retirement.