The Payment Accounts Regulations 2015

Made: 15th December 2015

Coming into force in accordance with regulation 1(2)

A draft of these Regulations has been laid before and approved by a resolution of each House of Parliament in accordance with paragraph 2(2) of Schedule 2 to that Act.

PART 1 — Introductory provisions

Citation and commencement

1

• (1) These Regulations may be cited as the Payment Accounts Regulations 2015.

• (2) These Regulations come into force as follows—

• (a) regulations 6 to 12 come into force six months after the Authority publishes the linked services list in accordance with regulation 3;

• (b) otherwise, these Regulations come into force on 18th September 2016.

Interpretation

2

• (1) In these Regulations—

• “the Act” means the Financial Services and Markets Act 2000[^f00003];

• “alternative arrangement” means a switching service that has been designated as such under regulation 15(1);

• “the Authority” means the Financial Conduct Authority;

• “business day” means a day on which the relevant payment service provider is open for business as required for the execution of a payment transaction;

• “consumer” means any natural person who is acting for purposes which are outside that person’s trade, business, craft or profession;

• “credit institution” has the same meaning as in the Payment Services Regulations, but for the purposes of these Regulations does not include a credit union within the meaning of—the Credit Unions Act 1979[^f00004]; orthe Credit Unions (Northern Ireland) Order 1985[^f00005];

• “direct debit” has the same meaning as in the Payment Services Regulations;

• “designation notice” means a notice given under regulation 21(1);

• “designated credit institution” means a credit institution that has been designated under regulation 21(1);

• ...

• ...

• “Financial Ombudsman Service” means the ombudsman scheme referred to in section 225 of the Act;

• ...

• “framework contract” has the same meaning as in the Payment Services Regulations;

• ...

• ...

• “Money and Pensions Service” means the body established under section 1 of the Financial Guidance and Claims Act 2018;

• “overdraft facility” means an explicit credit agreement whereby a payment service provider makes available to a consumer funds which exceed the current balance in the consumer’s payment account;

• “payment account” means an account held in the name of one or more consumers through which consumers are able to place funds, withdraw cash and execute and receive payment transactions to and from third parties, including the execution of credit transfers, but does not include any of the following types of account provided that the account is not used for day-to-day payment transactions: savings accounts; credit card accounts where funds are usually paid in for the sole purpose of repaying a credit card debt; current account mortgages or e-money accounts;

• “payment account with basic features” has the meaning given in regulation 19(1);

• “the Payment Accounts Directive” means Directive 2014/92/EU of the European Parliament and of the Council of 23rd July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features[^f00007];

• “payment service provider” has the same meaning as in the Payment Services Regulations but for the purposes of these Regulations, does not include—a credit union within the meaning of—the Credit Unions Act 1979;the Credit Unions (Northern Ireland) Order 1985;National Savings and Investments; andthe Bank of England;

• “Payment Services Regulations” means the Payment Services Regulations 2017;

• “Payment Systems Regulator” means the body established pursuant to section 39 of the Financial Services (Banking Reform) Act 2013[^f00009];

• “payment transaction” has the same meaning as in the Payment Services Regulations;

• ...

• “switching” or “switching service” means, upon a consumer’s request, transferring from one payment service provider to another either the information about all or some standing orders for credit transfers, recurring direct debits and recurring incoming credit transfers executed on a payment account, or any positive payment account balance from one payment account to the other, or both, with or without closing the former payment account;

• “the Tribunal” means the Upper Tribunal;

• “United Kingdom credit institution” means a credit institution which is incorporated in, or formed under the law of any part of, the United Kingdom.

• (2) Except where provided otherwise, any expression used in these Regulations which is used in the Payment Accounts Directive has the meaning which is given in that Directive.

PART 2 — Comparability of fees connected with payment accounts

Publication of the linked services list

3

• (1) The Authority must maintain a published list of the most representative services linked to a payment account and subject to a fee (“the linked services list”).

• (2) The linked services list must—

• (a) feature at least 10 and no more than 20 of the most representative services linked to a payment account offered by at least one payment service provider and subject to a fee; and

• (b) contain terms and definitions for each of the services featured; ...

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Periodic review of the linked services list

4

• (1) The Authority must assess and, where appropriate, update the linked services list—

• (a) on or before 30th April 2022; and

• (b) at least every 4 years after that date.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revision of the linked services list

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Glossary

6

• (1) Any payment service provider that offers a payment account must make available to consumers a glossary of at least the terms set out in the linked services list and the related definitions (“the glossary”).

• (2) The glossary must be drafted in clear, unambiguous and non-technical language and must not be misleading.

Information for consumers

7

Where applicable, any payment service provider that offers a payment account must use the terms set out in the linked services list in its contractual, commercial and marketing information.

Fee information document

8

• (1) Without affecting the requirements of—

• (a) Part 6 (information requirements for payment services) of the Payment Services Regulations;

• (b) any rules made by the Authority under Part 9A[^f00010] (rules and guidance) of the Act for the purposes of implementing Article 12 of Directive 2008/48/EC of the European Parliament and of the Council on credit agreements for consumers[^f00011]; as amended immediately before IP completion day

• (c) regulations 3[^f00012] (information to be disclosed: agreements other than telephone contracts, non-telephone distance contracts, excluded pawn agreements and overdraft agreements), 4 (information to be disclosed: telephone contracts), 5 (information to be disclosed: non-telephone distance contracts), 10[^f00013] and 11(information to be disclosed: overdraft agreements) of the Consumer Credit (Disclosure of Information) Regulations 2010[^f00014]; and

• (d) sections 55C[^f00015] (copy of draft consumer credit agreement) and 61B(2)[^f00016] (duty to supply copy of overdraft agreement) of the Consumer Credit Act 1974[^f00017],

any payment service provider that offers a payment account must ensure that, in good time before entering into a contract for a payment account with a consumer, it provides the consumer with a fee information document.

• (2) Schedule 1 makes further provision regarding the fee information document.

Availability of fee information document and glossary

9

• (1) Any payment service provider that offers a payment account must ensure that the fee information document and the glossary are—

• (a) made available to consumers at any time;

• (b) provided in an easily accessible manner, including to non-customers—

• (i) in electronic form on the payment service provider’s website where available; and

• (ii) in the premises of the payment service provider which are accessible to consumers.

• (2) The fee information document and glossary must be provided on paper or another durable medium free of charge upon request by a consumer.

Statement of fees

10

• (1) Without affecting the requirements of Part 6 of the Payment Services Regulations, the Consumer Credit (Running-Account Credit Information) Regulations 1983[^f00018] and sections 78(4) (duty to give information to debtor under running-account credit agreement) and 78A[^f00019] (duty to give information to debtor on change of rate of interest) of the Consumer Credit Act 1974, any payment service provider that offers a payment account must provide an annual statement of fees (“statement of fees”) free of charge to all consumers holding a payment account with it.

• (2) The method of communication used to provide the statement of fees must be agreed with the consumer and the statement of fees must be provided on paper upon the request of the consumer.

• (3) A payment service provider may provide the statement of fees together with information required pursuant to the requirements of the legislation referred to in paragraph (1), so long as the statement is presented and laid out in a way that is easy to read, using characters of a readable size.

• (4) Schedule 2 makes further provision regarding the statement of fees.

Branding

11

• (1) A payment service provider that offers payment accounts may use brand names to designate its services in its contractual, commercial and marketing information to consumers, provided that it clearly identifies, where applicable, the corresponding terms set out in the linked services list.

• (2) A payment service provider that offers payment accounts may use brand names in the fee information document and the statement of fees, provided such brand names are used in addition to the terms set out in the linked services list and as a secondary designation of those services.

The comparison website

12

• (1) The Money and Pensions Service must provide consumers with access, free of charge, to a website comparing fees charged by payment service providers for at least the services featured in the linked services list (“the comparison website”).

• (2) The comparison website must—

• (a) give payment service providers equal treatment in search results;

• (b) clearly disclose that it is owned by the Money and Pensions Service;

• (c) set out, clear, objective criteria on which the comparison is to be based;

• (d) use plain and unambiguous language and, where applicable, the terms set out in the linked services list;

• (e) provide accurate and up-to-date information and state the time of the last update;

• (f) include a broad range of payment account offers covering a significant part of the market, and where the information presented is not a complete overview of the market, a clear statement to that effect before displaying results; and

• (g) provide an effective procedure to report incorrect information on published fees.

Payment accounts packaged with another product or service

13

• (1) Where a payment account is offered as part of a package with another product or service which is not linked to a payment account, the payment service provider must inform the consumer whether it is possible to purchase the payment account from it separately.

• (2) Where a payment service provider informs the consumer pursuant to paragraph (1) that it is possible to purchase the payment account from it separately, the payment service provider must additionally provide the consumer with separate information regarding the costs and fees associated with each of the other products and services offered in the package that can be purchased separately from the payment service provider.

PART 3 — Switching

Provision of the switching service

14

• (1) A payment service provider must offer a switching service between payment accounts that are—

• (a) denominated in the same currency; and

• (b) opened or held with a payment service provider located in the United Kingdom.

• (2) A switching service must meet the requirements set out in Schedule 3, except where regulation 15 applies.

Alternative arrangements

15

• (1) This regulation applies where a payment service provider is a party to and compliant with the requirements of a switching service which the Payment Systems Regulator has designated as an alternative arrangement.

• (2) In order to be designated as an alternative arrangement, the Payment Systems Regulator must be satisfied that the switching service —

• (a) is clearly in the interest of the consumer;

• (b) does not impose upon the consumer any burden additional to those imposed by paragraphs 2 to 6 of Schedule 3;

• (c) ensures that the procedure for switching is completed at least within the same overall time-frame that applies in the case of a switching service that meets the requirements of paragraphs 2 to 6 of Schedule 3.

Designation of alternative arrangements etc.

16

• (1) Schedule 4 makes provision in connection with—

• (a) the designation of alternative arrangements; and

• (b) the powers of the Payment Systems Regulator over operators of switching services designated as alternative arrangements.

• (2) Schedule 5 makes provision in connection with—

• (a) fees connected with an alternative arrangement;

• (b) compensation for financial losses incurred by consumers switching accounts under an alternative arrangement; and

• (c) information relating to an alternative arrangement that a payment service provider must make available to consumers.

Facilitation of cross-border account opening for consumers

17

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PART 4 — Access to payment accounts

Non-discrimination in the provision of payment accounts

18

• (1) A credit institution must not discriminate against consumers legally resident in the United Kingdom by reason of their nationality or place of residence or by reason of sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation when those consumers apply for or access a payment account.

• (2) The conditions applicable to holding a payment account with basic features must not be discriminatory.

Payment account with basic features

19

• (1) A payment account with basic features is a payment account, denominated in sterling, which allows consumers to—

• (a) open, operate and close the account;

• (b) place funds in the account at the counter of the publicly accessible premises of—

• (i) the credit institution offering the payment account with basic features (“A”); and

• (ii) any other credit institution with which A has agreed arrangements that allow any consumer who holds a payment account with A which is not a payment account with basic features to place funds with that institution;

• (c) withdraw cash from the account within the United Kingdom in sterling—

• (i) at the counter of the publicly accessible premises of—

• (aa) the credit institution offering the payment account with basic features; and

• (bb) any relevant third party;

• (ii) at automated teller machines operated by the credit institution offering the payment account with basic features and any relevant third party during or outside the credit institution’s or relevant third party’s opening hours;

• (d) execute the following payment transactions within the United Kingdom in sterling —

• (i) direct debits;

• (ii) payment transactions through a payment card, including online payments;

• (iii) credit transfers, including standing orders, at, where available, terminals and counters and via the online facilities of the credit institution.

• (2) For the purposes of paragraph (1), “relevant third party” means a payment service provider with which A has agreed arrangements that allow any consumer who holds a payment account with A which is not a payment account with basic features to withdraw cash from—

• (a) that payment service provider’s publicly accessible premises; and

• (b) automated teller machines operated by that payment service provider.

• (3) A payment account with basic features must allow consumers to execute an unlimited number of operations in relation to the services set out in paragraph (1).

• (3A) A payment account with basic features may allow consumers to—

• (a) withdraw cash from the account in a country other than the United Kingdom or in a currency other than sterling in the manner specified in paragraph (1)(c)(i) or (ii);

• (b) execute a payment transaction specified in paragraph (1)(d)(i), (ii) or (iii) in a country other than the United Kingdom or in a currency other than sterling.

• (4) A credit institution offering a payment account with basic features must allow consumers to manage and initiate payment transactions from the consumer’s payment account with basic features—

• (a) at its publicly accessible premises; and

• (b) via online facilities, where available.

• (5) A credit institution must not provide an overdraft facility in relation to a payment account with basic features, and must take all reasonable steps to prevent consumers from carrying out any payment transaction using a payment account with basic features where executing that transaction would result in overrunning.