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CHAPTER 6

THE COST OF CREDIT

6.5.1Failure to Indicate APR —— In Breach of Statutory Law
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(a)

It is reasonable to deduce that the Mortgage Quotation (see Case 1 of Appendix 1/2), as presented to me by the First National Senior Official at our meeting in First National's office, has the status of a 'representation' to promote the supply of a Mortgage by First National / Irish Life to me. Such a representation could therefore be classified as 'advertising' in accordance with the definition of 'advertising' within the 1988 Misleading Advertising Regulations. 


It is reasonable to educe that the follow-on Mortgage Quotations (one of which was the Mortgage chosen by my wife and I), which were forwarded to me as a consequence of that meeting, also have, by direct association with the original representations made to me in First National's office, the equivalent  status of being a 'representation' to promote the supply of a Mortgage. (See Section 1.2: The Experts’ Advice and Representations.) 


The omission by First National / Irish Life of an indication of the APR on the above Mortgage Quotations is likely to deceive the borrower. Such omission is also likely (because of the fact that First National's / Irish Life's method of computing interest is obscured) to have an injurious effect on a competitor. (See Section 6.3.)


The representations of First National / Irish Life in their Mortgage Quotations, wherein they fail to indicate the APR when indicating the cost of credit, therefore constitute ‘misleading advertising’ within the ambit of the Misleading Advertising Regulations, and First National / Irish Life are therefore guilty of an infringement of these Regulations.


(See Section 6.1, followed by Section 2.4.2: Misleading Advertising.)



(b)


The omission by First National / Irish Life to indicate the APR on their Mortgage Quotations (as instanced in Appendix 1/2 and Appendix 1/3) would clearly be in breach of the U.K. Consumer Credit (Total Charge for Credit) Regulations 1980 and of the later Consumer Credit (Quotations) Regulations 1989.


(See Section 6.1 above.)




(c)

 


In the context of Statutory Legislation Governing Investment Business Relating To Consumer Credit Transactions: THE UNITED KINGDOM POSITION  —————

The omission by First National / Irish Life to indicate the APR on their Mortgage Quotations would be in contravention of the Principles applicable to the ‘conduct of business rules’, as defined in Schedule 8 of the U.K. Financial Services Act 1986.

In the matter of the Standards, it shows a want of care; and in the matter of Disclosure, First National / Irish Life have omitted information (the APR) relevant to the financial implications of the transaction that enables an informed decision to be made.

Again, First National / Irish Life would also be clearly in breach of specific provisions of the various Conduct of Business Rules issued in accordance with the Principles of the Act.


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In the context of Statutory Legislation Governing Investment Business Relating To Consumer Credit Transactions: THE IRISH POSITION  —————

The failure by First National / Irish Life to indicate the APR on their Mortgage Quotations is in breach of the stated requirements of the Code of Conduct for Insurance Intermediaries as issued under title of the Irish Insurance Act 1989.  ————  Such non-disclosure is in breach of the duties intrinsic to an Utmost Good Faith contract. First National / Irish Life have contravened the Statute Law legal requirements, as shown in (a) and (b) above. They are also in breach of their Common Law legal requirements (this will be shown in Section 6.5.2 and Section 6.5.3 below).


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(See Section 2.5 and Section 2.6: Statutory Legislation governing Investment Business relating to Consumer Credit Transactions.)

 

 

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