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Representative example

What is a representative example?

This shows consumers the typical costs associated with a product being advertised. From this, they can work out whether it is affordable or suitable for them.
(1) CONC 3.5.5R states clear rules that it must include certain information:

Financial Promotions Guide

Home
1.0 | About Evolution Funding
2.0 | What is a financial promotion?
2.1 | Consumer understanding
2.2 | Representative APR
2.3 | Representative example
2.4 | Prominence
2.5 | Regulatory disclosures

A: The rate of interest – whether it is fixed, or variable, or both. It needs to be expressed as a fixed or variable percentage, applied on an annual basis to the amount of credit drawn down;

B: The nature and amount of any other charge included in the total charge for credit;

C: The total amount of credit;

D: The representative APR;

E: If the credit is in the form of a deferred payment for specific goods, services, land or other things, the cash price and the amount of any advance payment;

F: The duration of the agreement;

G: The total amount payable;

H: The amount of each repayment of credit.

(2) The information needed in (1) must be what we accurately think at the time of promotion to be representative, and that these representative figures are expected to be entered into as a result of the promotion.

For example – if your average balance to finance is £8,000, your representative example should not be for a £25,000 balance.

Example of how to use a compliant representative example in financial promotions

The representative example must be:

  • Clear, concise and prominent;
  • Accompanied by the words “representative example”;
  • Presented in full with equal prominence (e.g. size, colour, position);
  • Given no less prominence than any information about the cost of credit, or any incentives in the promotion.

When must a representative example be shown?

If your financial promotion shows a rate of interest, e.g. 9.9% APR, or an amount relating to the cost of credit, e.g. £325 per month, with the exception of the representative APR, a full representative example must be shown within your promotion.
These are called ‘triggers’, for example:
  • Buy now from as low as 6.9% APR
  • Buy now from just £199 per month
  • Interest-free for 6 months
  • Finance from 3.5% PAF
An example of how to use other examples of finance in a financial promotion

Can I show other finance examples within the promotion?

You can include other finance examples, but these must be less prominent than the representative example, and clear that they are for illustrative purposes only.

To include another example, you need to make sure:

  • There is only one representative example;
  • The representative example is more prominent than the other finance examples;
  • All other finance examples are labelled differently, e.g. “HP finance example”, “PCP finance example”
The finance examples include at least:
  • Number and amount of monthly payments;
  • Deposit;
  • Optional final payment;
  • Term of agreement, which needs to be shown in the terms and conditions;
  • If it’s a PCP – contract mileage and excess mileage charges also needs to be in the terms and conditions.

Next // Prominence

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