10. Contract Terms
Contract terms and conditions should be fair, written in plain, intelligible language and easily legible, and must provide for the following:-
- Detail the nature of services being provided, ie the debts which are included, and those that will not be included in the programme.
- Where it is not possible to state firmly the cost or duration of a contract a best estimate of the total cost and duration of the service, based on the amount of payment being made, the management fees charged and the amount of debt outstanding. The assumptions on which this is based should be set out.
- Contract terms must specify a period within which payments received from clients will normally be passed on. As specified under “Client Account” below payments must be made within 5 working days of clearance.
- Procedures for withdrawal from a programme.
- Compliance with the Financial Services (Distance Marketing) Regulations 2004 regulations 9 & 10 regarding the cancellation rights enjoyed by consumers, which include the right to cancel, in certain circumstances, even if written information has been received by the consumer..
- Any contract must not include any term which says or implies that there are no circumstances in which a client is entitled to a refund. For example a refund may be due to a dissatisfied client if:
- The member has promised more than it can deliver.
- The member has failed to conduct negotiations with the reasonable care and skill required by section 13 of the Supply of Goods and Services Act; or
- There has been a total failure of consideration
- Clients on debt management programmes must not be prohibited from corresponding with, or responding to creditors or their agents. It is reasonable for members to request that all contact/correspondence with creditors be copied to them. Members must deal with all correspondence promptly, and must keep the client informed of relevant communications.
- The contract should allow the client to withdraw from the contract where, following signing of the contract the total fee differs significantly from the estimate given prior to the contract (for example, because a full investigation of the client’s circumstances reveal that the monthly payment must be larger than first thought).
