Consumer Credit Regulations, 2005

L.N. 84 of 2005

CONSUMER AFFAIRS ACT

(CAP. 378)

Consumer Credit Regulations, 2005

IN exercise of the powers conferred by article 7 of the Consumer

Affairs Act, the Minister for Competitiveness and Communications,

after consulting the Consumer Affairs Council, has made the following

regulations>-

(1) The title of these regulations is the Consumer Credit Citation

and

Regulations, 2005.

commencement.

(2) These regulations shall come into force on such day as

the Minister responsible for consumer affairs may by notice in the

Gazette prescribe, provided that different dates may be prescribed for

different provisions or purposes of these regulations.

Regulation 3(4)

1. In credit agreements for financing the supply of particular goods or services

(i)

a description of the goods or services covered by the agreement;

(ii)

the cash price and the price payable under the credit agreement;

(iii)

the amount of the deposit, if any, the number and amount of instalments and

the dates on which they fall due, or the method of ascertaining any of the same if

unknown at the time the agreement is concluded;

(iv)

an indication that the consumer shall be entitled, as provided in regulation 9,

to a reduction if he repays early;

(1) Any reference in these regulations to “the Act” is a Interpretation.

reference to the Consumer Affairs Act, and subject to the provisions of

sub-regulation (2) of this regulation, the provisions of article 2 of the

Act shall apply to these regulations.

(2)

In these regulations, unless the context otherwise

requires>

“annual percentage rate of charge” means the total cost of the

credit to the consumer expressed as an annual percentage of the

amount of the credit granted and calculated in accordance with

regulation 6<

“creditor” means a trader who grants credit in the course of

his trade, business, craft or profession or a group of such traders in

connection with the supply of goods or services to consumers, or

in connection with home loan agreements<

“credit agreement” means an agreement whereby a creditor

grants or promises to grant to a consumer, credit in the form of a

deferred payment, loan or other similar financial accommodation>

Provided that agreements for the provision on a continuing

basis of a service or a utility whether private or public, where the

consumer has the right to pay for them, for the duration of their

provision, by means of periodical payments, are not deemed to be

credit agreements for the purpose of these regulations<

“credit intermediary” means a natural or legal person who,

for a consideration, habitually acts as an intermediary by presenting

or offering credit agreements<

“home loan agreement” means a credit agreement whereby

the consumer may purchase, reconstruct, alter or improve

immovable property for his own residence or that of his dependants

and which is secured either by a hypothec or similar right or charge

howsoever described on an immovable property, or by a surety<

“total cost of the credit to the consumer” means all the costs,

including interest, commissions and any other kind of charge,

howsoever described or to whomsoever it is paid, which the

consumer has to pay for the credit.

ownership 1 does not pass immediately to the

(v)

who owns the goods (if the

consumer) and the terms on which the consumer becomes the owner of such goods;

(vi)

a description of the security required, if any;

(vii)

the period, if any, during which a consumer may withdraw from a credit

agreement without incurring any cost or penalty, however so described;

(viii) a clear indication of the insurance required, if any and, when the choice of

insurer is not left to the consumer, a clear indication of the cost thereof; and

(ix)

the obligation on the consumer to save a certain amount of money which

must be placed in a special account.

2. In credit agreements operated by credit cards

(i)

the amount of the credit limit, if any;

(ii)

the terms of repayment or the means of determining them;

(iii)

the period, if any, during which a consumer may withdraw from a credit

agreement without incurring any cost or penalty, however so described.

3. In credit agreements operated by running account which are not otherwise covered by

these regulations

(i)

the amount of the credit limit, if any, or the method of determining it;

(ii)

the terms of use and repayment ;

(iii)

the period, if any, during which a consumer may withdraw from a

credit agreement without incurring any cost or penalty, however so described.

4. In other credit agreements covered by these regulations

(i)

the amount of the credit limit, if any;

(ii)

an indication of the security required, if any;

(iii)

the terms of repayment;

(iv)

the period, if any, during which a consumer may withdraw from a credit

agreement without incurring any cost or penalty, however so described;

(v)

an indication that the consumer shall be entitled, as provided in regulation 9,

to a reduction if he repays early.

(1) Credit agreements shall in all instances be made in writing

and must be signed by the creditor and the consumer.

(2) The creditor shall be obliged to give the consumer a

copy of such written agreement within a period of ten working days

from the signing of the agreement.

(3) The written agreement shall include the following>

(a) a statement of the annual percentage rate of charge,

together with a statement of the conditions under which the annual

percentage rate of charge may be amended>

Provided that in cases where it is objectively impossible to

state the annual percentage rate of charge, the consumer shall be

provided with adequate information in the written agreement,

including the particulars listed in sub-regulation (1) of regulation

4<

(b) a statement of the amount, number and frequency or

dates of the payments which the consumer must make to repay the

credit, the payments for interests or other charges, as well as the

total amount of such payments<

(c) a statement of the cost items referred to in sub-regulation

(2) of regulation 6, with the exception of expenditure related to

the breach of contractual obligations which were not included in

the calculation of the annual percentage rate of charge but which

have to be paid by the consumer in given circumstances together

with a statement identifying such circumstances. Where the exact

amount of those items is known, that sum is to be indicated< where

the said exact amount is not known, either a method of calculation

or as accurate an estimate as possible shall be provided.

(4) The written agreement shall further incorporate the other

terms of the contract including all the terms stated in the First Schedule

to these regulations.

Regulation 5(1)

General Information on credit for home loans to be provided to the consumer

Initial information about home loans should include or be accompanied by the following

information in the same format as that initial information is itself provided

(i)

Identification and address of the creditor;

(ii)

Where appropriate, identification and address of the intermediary.

B – Home Loan

(i)

Purposes for which the home loan may be used;

(ii)

Form of surety;

(iii)

Description of the types of home loans available with short description of the

differences between fixed and variable rate products, including related implications

for the consumer;

(iv)

Types of interest rate – fixed, variable, and combinations thereof;

(v)

An indication of the cost of a typical home loan for the consumer;

(vi)

A list of related cost elements, such as administrative costs, insurance costs,

legal costs, the costs of intermediaries;

(vii)

The different options available for reimbursing the credit to the creditor,

including the number, frequency, amount of repayment (instalments if any);

(viii)

Whether there is a possibility of early repayment (if so, its conditions);

(ix)

Whether a valuation of the property is necessary and, if so, by whom it has to

be carried out;

(x)

General information on tax relief on home loan interest or other public

subsidies prevailing, or information on where one can obtain further advice;

(xi)

The duration of the period, if any, during which a consumer may withdraw

from a credit agreement without incurring any cost or penalty, however so described.

(1) Notwithstanding the exclusion provided for in paragraph Information

to be provided

(e) of sub-regulation (1) of regulation 7, where an agreement between a to consumer

credit institution and a consumer is being concluded for the granting of prior

during agreement.

credit in the form of an advance on a current account other than on

credit card accounts, the consumer shall, at the time or before the

agreement is concluded, be informed in writing of the following matters>

(a)

the credit limit, if any<

(b) the annual rate of interest and the charges applicable

from the time the agreement is concluded and the conditions under

which these may be amended<

(c)

the procedure for terminating the agreement.

(2) During the period of the credit agreement, the consumer

shall be informed of any change in the annual rate of interest or in the

relevant charges at the time it occurs. Such information shall be given

in a statement of account or by means of a press release or an

advertisement or a notice which is displayed on the creditor’s business

premises or in any other manner as the Director may establish by notice

in the Gazette.

(3) In the case of tacitly permitted overdrafts where the

overdraft extends beyond a period of three months, the consumer shall

be informed in writing by the creditor of the annual rate of interest and

any other charges that may be applicable.

Information to be presented in the Standardised Information Sheet

The contents of the Standardised information sheet are set out below.

STANDARDISED INFORMATION SHEET

Description

“This document does not constitute a legally binding offer. The

figures are provided in good faith and are an accurate representation

of the offer that the creditor would make under current market

conditions based on the information that has been provided. It should

be noted, however, that the figures could fluctuate with market

conditions. The provision of this information does not oblige the

creditor to grant a credit.”

2. Description of product This section should provide a brief but clear description of the

product. It should be made clear whether it is a hypothec on a

property or another commonly used surety. It should be made clear

whether the product on offer is an interest only home loan (namely

that it involves servicing the debt with a lump sum payment at the

end) or a repayment home loan (namely that it involves paying

interest and capital over the lifetime of the home loan). It should be

made clear whether the home loan terms are dependent on the

consumer supplying a certain amount of capital (perhaps expressed as

a percentage of house value). Where the home loan terms are

dependent on a third party guarantee, this should be clearly stated.

3. Nominal rate (indicate This section should provide information on the key condition of the

type of rate and duration home loan – the interest rate. Where relevant, the description should

include details of how the interest rate will vary including, for

example, review periods, lock in periods and related penalty clauses,

collars and caps etc. The description should include

– whether or not a variable rate is indexed; and

– provide details of indexation, where appropriate.

4. Annual percentage Where a national figure for APRC is not set in legislation, the

rate of charge (APRC) equivalent effective rate should be used.

7.

9. For interest only home The creditor should provide an indication – real or illustrative – of

(a) the amount of each regular interest repayment in accordance with

the frequency of the payments ( see point 7);

(b) the amount of each regular payment towards the repayment

vehicle, in accordance with the frequency of the payments (see point

7).

Where appropriate, a warning should be given that the repayment

vehicle may not cover the amount borrowed. If the creditor provides

the repayment vehicle and has included this in part of the offer then it

should be clear whether or not the offer is tied to the consumer’s

agreement on that repayment vehicle.

A list of initial non-recurring costs which the consumer is expected to

pay upon taking out the home loan must be provided. Where these

costs are under the direct or indirect control of the creditor, an

estimate of the costs should be provided. Where relevant, it should be

made clear if the cost is to be paid regardless of the outcome of the

home loan application. Such costs might include, for example: –

- administrative costs;

– legal fees;

– property valuation.

Where an offer would be dependent on the consumer’s receiving

these services through the creditor, it should be clearly stated.

This list should include, for example

– insurance against default on payments (unemployment/death);

– fire insurance;

– building and contents insurance.

Where an offer would be dependent on the consumer’s receiving

these services through the creditor it should be clearly stated.

The creditor should provide an indication of

– the terms of early repayment, if any;

– including an indication of any charges applicable.

Where it is not possible to stipulate the charge at this stage, an

indication should be provided that a sum sufficient to recoup the

creditor’s costs in unwinding the transaction would be payable.

Name, address and telephone number of contact point

The creditor should provide an illustrative and summarised

amortisation table which includes, at least

– monthly or quarterly payments ( if it is the case) for the first year;

– to be followed by yearly figures over the total duration of the loan.

The table should contain figures on

– amount of capital reimbursed;

– amount of interest;

– outstanding capital;

– amount of each instalment;

- sum of capital and interest

It should be clearly indicated that the table is illustrative only and

contain a warning if the home loan proposed has a variable interest

rate.

(1) Prior to the conclusion of a home loan agreement, the Home loan

Agreements.

creditor shall be obliged to provide the consumer with the general pre-

contractual information listed in the Second Schedule to these

regulations, together with a duly completed personalised standard

information sheet in the format provided for in the Third Schedule to

these regulations.

(2) In any home loan agreement, the creditor shall be obliged

to satisfy the following additional requirements relating to the form

and content of such an agreement>

(a) the right of the consumer for a reduction under regulation

9 if he pays credit before it is due<

(b) a clear description of the security provided to the

creditor<

(c) a clear indication of the costs payable by the consumer

for an eventual breach of his contractual obligations under the

agreement<

(d) a clear statement of the fees, if any, payable by the

consumer for a home loan agreement in respect of the submission,

approval or rejection of an application for such loan, the valuation

of the security provided and the cost of legal services payable to

the creditor in connection with the loan.

Regulation 6(1)

BASIC CALCULATION EXPRESSING THE EQUIVALENCE OF LOANS ON THE ONE

HAND AND REPAYMENT INSTALMENTS AND CHARGES ON THE OTHER

A K ′ ′

K ′ = m ′

A K

= ∑

K = 1 ( 1 + i )

( 1 + i ) t

t K

K ′

K ′ = 1

The serial number of a loan.

The serial number of a repayment installment or a payment of charges.

The amount of loan number K .

The amount of repayment installment or payment of charge number K '

The symbol for the sum.

The serial number of the last loan.

The serial number of the last repayment installment or payment of charges.

The interval, expressed in years and fractions of a year, between the date of

granting of loan no. 1 and the date of granting of the subsequent loans nos. 2

to m .

The interval, expressed in years and fractions of a year, between the date of

granting of loan no. 1 and the date of payment of the repayment installment

or charge nos. 1 to m ' .

The percentage rate that can be calculated (either by algebra, by successive

approximations, or by a computer programme) where the other terms in the

equation are known from the credit agreement or otherwise.

(a) The amounts paid by both parties at different times shall not necessarily be equal

and shall not necessarily be paid at equal intervals.

(b) The starting date shall be that of the first loan.

(c) Intervals between dates used in the calculations shall be expressed in years or in

fractions of a year. The year shall be considered as having 365 days or 365.25

days or (for the leap years) 366 days, 52 weeks or 12 equal months. An equal

month shall be considered as having 30.41666 days (namely 365/12).

(d) The results shall be expressed with an accuracy of at least one decimal place.

When rounding to a particular decimal place the following rule shall apply

If the value of the decimal place figure following this particular decimal place is

greater than or equal to 5, the figure of such particular decimal place shall be

increased by one.

(1) The annual percentage rate of charge shall be that rate

equivalent on an annual basis which equalises the present value of all

commitments (loans, repayments and charges), future or existing, agreed

by the creditor and the borrower, and shall be calculated in accordance

with the mathematical formula set out in the Fourth Schedule to these

regulations. By way of illustration, four examples of the method of

calculation are provided in the Fifth Schedule to these regulations.

(2) For the purpose of calculating the annual percentage

rate of charge and the “total cost of the credit to the consumer” as defined

in regulation 2, no account shall be taken of the following charges or

costs>

(a) charges payable by the consumer for non-compliance

with any of his commitments laid down in the credit agreement<

(b) charges other than the purchase price which, in purchases

of goods or services, the consumer is obliged to pay whether the

transaction is paid in cash or by credit<

(c) charges for the transfer of funds and charges for keeping

an account intended to receive payments towards the

reimbursement of the credit, the payment of interest and other

charges, except where the consumer does not have reasonable

freedom of choice in the matter and where such charges are

abnormally high>

Provided that this paragraph shall not apply to charges for

the collection of such reimbursements or payments, whether made

in cash or otherwise<

(d) membership subscriptions to associations or groups

arising from agreements separate from the credit agreement, even

though such subscriptions have an effect on the credit terms< and

(e)

charges for insurance or guarantees>

Provided that any charges designed to ensure payment to the

creditor, in the event of the death, invalidity, illness or

unemployment of the consumer, of a sum equal to or less than the

total amount of the credit together with relevant interest and other

charges which have to be imposed by the creditor as a condition

for credit being granted, shall be taken into account<

(f) in the case of home loan agreements, any charges payable

by the consumer to persons other than the creditor<

(g) any charges which would become payable by the

consumer to the creditor only when>

(i) the credit made available is not utilised in whole or

in part<

(ii) the consumer requests an amendment to the

rescheduling of payments and the creditor accedes to such a

request< or

(iii) the consumer exercises his rights under regulation

9 hereof.

(3) The annual percentage rate of charge shall be calculated>

(a) immediately prior to the conclusion of the credit

agreement, without prejudice to the provisions of regulation 11

concerning advertisements and special offers<

(b) on the assumption that the credit agreement is valid for

the period agreed and that the creditor and the consumer fulfil

their obligations under the terms and by the dates agreed.

(4) In the case of credit agreements containing clauses

allowing variations in the rate of interest and the amount or level of

other charges contained in the annual percentage rate of charge but

unquantifiable at the time when it is calculated, the annual percentage

rate of charge shall be calculated on the assumption that interest and

other charges remain fixed and shall apply until the end of the credit

agreement.

(5) Where necessary, the following assumptions may be

made in calculating the annual percentage rate of charge>

(a) if the contract does not specify a credit limit, the amount

of credit granted shall be deemed to be eight hundred Maltese Liri

or such other lesser amount as may be fixed by the Director after

consulting the Council<

(b) if there is no fixed timetable for repayments, and such

fixed timetable cannot be deduced from the terms of the agreement

and from the means for repaying the credit granted, the duration

of the credit shall be deemed to be one year<

(c) unless otherwise specified, where the contract provides

for more than one repayment date, the credit will be made available

and the repayments made at the earliest time provided for in the

agreement.

(1) These regulations shall not apply to>

Regulation 6(1)

EXAMPLES OF CALCULATIONS

A.

CALCULATION OF THE ANNUAL PERCENTAGE RATE OF CHARGE ON A

CALENDAR BASIS [1 YEAR = 365 DAYS (OR 366 DAYS FOR LEAP YEARS)].

First Example

Sum loaned: S = 1 000 Maltese Liri on 1 st January, 1994.

The sum is repaid in a single installment of 1200 Maltese Liri on 1 st July, 1995, that is 1½

years or 546 (=365 + 181) days after the date of the loan.

The equation becomes: 1000 =

( 1 + i ) 365

or

( 1 + i ) 546 365 = 1 . 2

1 + i

= 1 . 1296204

= 0 . 1296204

i

This amount shall be rounded to 13% (or 12.96% if an accuracy of two decimal places is

preferred).

Second Example

The sum loaned is S = 1000 Maltese Liri, but the creditor retains 50 Maltese Liri for

administrative expenses.

So that the real loan is 950 Maltese Liri.

The repayment of 1200 Maltese Liri, as in the first example, is again made on the 1 st July,

1995. The equation becomes: 950 =

( 1 + i ) 356

Or

( 1 + i ) 546 365 = 1 . 263157

1 + i

= 1 . 169026

= 0 . 169026

i

This amount shall be rounded to 16.9%

Third Example

The sum loaned is S = 1000 Maltese Liri, on the 1 st January, 1994, repayable in two

installments of 600 Maltese Liri paid after one and two years respectively.

The equation becomes

1000 =

+

=

+

( 1 + i ) ( 1 + i ) 365 1 + i ( 1 + i ) 2

The equation is solved by algebra and produces i = 0.1306623 rounded to 13.1% (or 13.07%

if an accuracy of two decimal places is preferred).

Fourth Example

The sum loaned is S = 1000 Maltese Liri, on 1 st January, 1994 and the amounts paid by the

borrower are

After 3 months (0.25 years/90 days)

272 Maltese Liri

After 6 months (0.5 years/181 days)

272 Maltese Liri

After 12 months (1 year/365 days)

544 Maltese Liri

TOTAL

1088 Maltese Liri

The equation becomes

1000 =

+

+

( 1 + i )

( 1 + i )

( 1 + i ) 365

The equation allows i to be calculated by successive approximations which can be

programmed on a calculator.

The result is i=0.13226 rounded to 13.2% (or 13.23% if an accuracy of two decimal places is

preferred).

B. CALCULATION OF THE ANNUAL PERCENTAGE RATE OF CHARGE ON

THE BASIS OF A STANDARD YEAR (1 YEAR = 365 DAYS OR 365. 25

DAYS, 52 WEEKS OR 12 EQUAL MONTHS)

First example

Sum loaned S = 1000 Maltese Liri

This sum is repaid in a single instalment of 1200 Maltese Liri in 1.5 years (that is 1.5 x 365 =

547.5 days, 1.5 x 365.25 = 547.875 days, 1.5 x 366 = 549 days, 1.5 x 12 = 18 months or 1.5 x

52 = 78 weeks) after the date of the loan.

The equation becomes

1000 =

=

=

=

( 1 + i )

( 1 + i )

( 1 + i )

( 1 + i ) 52

547 . 5

547 . 875

365 . 25

or

( 1 + i ) 1 . 5 = 1 . 2

1 + i = 1 . 129243

i = 0 . 129243

This amount shall be rounded to 12.9% (or 12.92% if an accuracy of two decimal places

preferred).

Second Example

The sum loaned is S = 1000 Maltese Liri, but the creditor retains 50 Maltese Liri for

administrative expenses. So that the real loan is 950 Maltese Liri. The repayment 1200

Maltese Liri, as in the first example, is made 1.5 years after the date of the loan.

The equation becomes

950 =

=

=

=

( 1 + i )

( 1 + i )

( 1 + i )

( 1 + i ) 52

547 . 5

547 . 875

365 . 25

or

( 1 + i ) 1 . 5 = 1200 950 = 1 . 263157

1 + i

= 1 . 168526

= 0 . 168526

i

This amount shall be rounded to 16.9% (or 16.85% if an accuracy of two decimal places is

preferred).

Third example

The sum loaned is S = 1000 Maltese Liri and is repaid in two instalments of 600 Maltese Liri

paid after one and two years, respectively.

The equation becomes

1000 =

+

=

+

( 1 + i )

( 1 + i )

( 1 + i )

( 1 + i ) 365 . 25

365 . 25

730 . 5

365 . 25

=

+

=

+

( 1 + i )

( 1 + i )

( 1 + i )

( 1 + i ) 52

=

+

( 1 + i ) ( 1 + i ) 2

The equation is solved by algebra and produces i = 0.13066 rounded to 13.1% (or 13.07% if

an accuracy of two decimal places is preferred).

Fourth Example

The sum loaned is S = 1000 Maltese Liri and the amounts paid by the creditor are

After 3 months

(0.25 years/13 weeks/91.25 days/91.3125 days)

272 Maltese Liri

After 6 months

(0.5 years/26 weeks/182.5 days/182.625 days)

272 Maltese Liri

After 12 months

(1 year/52weeks/365 days/365.25 days)

544 Maltese Liri

TOTAL

1088 Maltese Liri

The equation becomes

1000 =

+

+

( 1 + i ) 365 ( 1 + i ) 365 ( 1 + i ) 365

91 . 25

182 . 5

=

+

+

( 1 + i )

( 1 + i )

( 1 + i ) 365 . 25

91 . 3125

182 . 625

365 . 25

365 . 25

365 . 25

=

+

+

( 1 + i )

( 1 + i )

( 1 + i ) 12

=

+

+

( 1 + i )

( 1 + i )

( 1 + i ) 52

=

+

+

( 1 + i )

( 1 + i )

( 1 + i ) 1

0 . 25

0 . 5

This equation allows i to be calculated by successive approximations, which can be

programmed on a calculator.

The result is i=0.13185 rounded to 13.2% (or 13.19% if an accuracy of two decimal

places is preferred).

(a) hiring agreements except where these provide that the

title will pass ultimately to the hirer<

(b) hiring agreements where the title will pass to the hirer

solely at the discretion of the hirer<

(c) credit granted or made available without payment of

interest or any other charge<

(d) credit agreements under which no interest is charged

provided the consumer agrees to repay the credit in a single

payment<

(e) credit in the form of advances on a current account

granted by a credit institution other than on credit card accounts>

Provided that the provisions of regulation 4 shall in any case

apply to such credits<

(f) home loan agreements where the amount exceeds eighty

thousand (80,000) Maltese Liri<

(g) other credit agreements involving amounts of less than

eighty-seven (87) Maltese Liri or more than eight thousand seven

hundred (8,700) Maltese Liri <

(2) The Minister may, acting on the advice of the Director,

by Order in the Gazette exempt from the application of these regulations

certain types of credit which fulfil the following conditions>

(a) they are granted at rates of charge below those prevailing

in the market< and

(b) they are not offered to the public generally.

(1) Where a creditor in a credit agreement relating to the Repossession

of goods.

supply of goods reserves the right to repossess the goods in the event of

alleged default by the consumer, any such contractual repossession shall

only be exercised if explicitly agreed to in writing by the consumer and

any clause whereby the consumer exempts the creditor from the

obligation to have recourse to judicial proceedings in order to effect

such repossession or whereby the consumer otherwise renounces to his

right to have recourse to judicial proceedings in respect of such

repossession, shall be null and void>

Provided that, notwithstanding anything contained in the credit

agreement, the court shall not allow the creditor to exercise the right to

repossession where the consumer has already paid seventy per cent of

the total amount of credit payable under the agreement or where it deems

that the grant of such repossession would give rise to unjustified

enrichment.

(2) When, in accordance with the other provisions of this

regulation, a trader or a creditor, as the case may be, wishes to recover

possession of any goods from a consumer as a result of an alleged breach

of the credit agreement, he shall in the first instance send a notice by

registered post to the consumer, at his last known address, specifying

the following>

(a)

details of the credit agreement<

(b) the full name and address of the creditor<

(c)

the nature of the alleged breach of the agreement<

(d) information on the consequences should the consumer

fail to comply with the request stated in the notice, and

(e) how and where the breach may be rectified, provided

that the consumer shall in all cases be allowed at least fifteen days

from the date of receipt of the notice to rectify the breach.

(3) Any attempt to take repossession of goods not in

accordance with this regulation shall constitute a breach of these

regulations.

(4) The provisions of this regulation shall apply even where

the agreement under which a consumer acquires goods is described as a

hire-purchase agreement or otherwise with reservation of ownership.

(1) The consumer shall be entitled to discharge his

obligations under a credit agreement in full or in part before the time

established by the agreement.

(2) If the consumer pays the credit before the time

established by the agreement, he shall be entitled to a proportional

reduction of the total cost of the credit.

(3) If costs directly arising from the credit agreement have

been specified in the agreement and such costs are fair and reasonable

taking into account all relevant circumstances, the creditor may recover

such costs from a consumer who has exercised his right under sub-

regulation (1)>

Provided that the creditor shall inform the consumer of the

costs he would incur if early repayment is made>

Provided further that where such costs cannot be established

when the credit agreement is signed, the creditor shall inform the

consumer of the method of calculation to be used to establish such costs.

Where the rights of the creditor under a credit agreement are

assigned to a third party, the consumer shall be entitled to raise against

that third party any defence available to him against the original creditor>

Provided that set-off may only be raised in accordance with the

relevant provisions of articles 1196 to 1204 of the Civil Code, which

shall apply irrespective of anything to the contrary contained in a credit

agreement.

Without prejudice to articles 48 to 50 of the Act, any

advertisement or any offer displayed on any business premises in which

a person offers credit or offers to arrange a credit agreement wherein a

rate of interest or any figures relating to the cost of the credit are

indicated, shall also include a clear statement of the annual percentage

rate of charge, at least by means of a representative example if no other

means is practicable.

Without prejudice to the provisions of the Data Protection Collection and

processing of data.

Act, personal data obtained from a consumer or any other person in

connection with the conclusion and management of any credit agreement

may only be processed for the purpose of assessing the financial situation

of the consumer or of any such other person and their ability to repay.

(1) The credit agreement shall not prejudice the rights of Rights of

a consumer

the consumer against the trader who has supplied goods or services against a trader.

purchased by means of such an agreement where such goods or services

are not supplied or are otherwise not in conformity with the contract for

their supply entered into between the consumer and the trader.

(2) A consumer shall have the right to take action against

the grantor of credit for the fulfilment of his claim where>

(a) in order to buy goods or obtain services the consumer

enters into a credit agreement with a creditor other than the supplier

of such goods or services<

(b) the grantor of the credit and the supplier of the goods or

services have a pre-existing agreement whereunder credit is made

exclusively by that grantor of credit to customers of that supplier

for the acquisition of goods or services from that supplier<

(c) the consumer referred to in paragraph (a) obtains his

credit pursuant to that pre-existing agreement<

(d) the goods or services covered by the credit agreement

are not supplied, or are supplied only in part, or are not in

conformity with the contract for their supply< and

(e) the consumer has pursued his remedies against the

supplier but has failed to obtain the remedy to which he is entitled

in whole or in part.

Every creditor shall take all necessary steps to ensure full Responsibility

of creditors.

compliance with these regulations.

A creditor or any other person shall not, with regard to a Prohibition

person who he knows, or ought to know from circumstances, to be of

in relation to

under sixteen years of age, solicit any credit agreement or send him any persons under

sixteen.

document by which credit or information or advice for the obtaining of

credit is offered.

(1) The Director shall monitor the working and

effectiveness of these regulations and shall undertake the necessary

measures including, where appropriate, the initiation of legal

proceedings to ensure compliance therewith.

(2) The Director shall monitor the granting of credit to

consumers in connection with the supply of goods or services, and shall

investigate complaints from consumers arising out of, or in connection

with credit agreements, and he shall from time to time provide relevant

information and advice to consumers in any manner he considers

appropriate.

The provisions of these regulations shall prevail and apply

notwithstanding anything to the contrary contained in any credit

agreement, howsoever formulated or described, entered into by the

consumer. Any waiver by the consumer of any of his rights under these

regulations shall be null and void.

(1) Any person who contravenes or fails to comply with

any of the provisions of these regulations shall be guilty of an offence

against these regulations.

(2) Proceedings in respect of an offence against these

regulations shall be commenced within one year from the commission

of the offence.

(3) Any person guilty of an offence against these regulations

shall, on conviction, be liable>

(a) in the case of the first conviction, to a fine (multa) of

not less than two hundred (200) Maltese Liri and not exceeding

one thousand (1,000) Maltese Liri<

(b) in the case of a second or subsequent conviction, to a

fine (multa) of not less than four hundred (400) Maltese Liri and

not exceeding two thousand (2,000) Maltese Liri< and the Court

may in case of a second or subsequent conviction and in terms of

article 107 of the Act, order the publication in one or more daily

newspapers of any judgement, or a statement or summary thereof,

passed on the offender>

Provided that the expenses of any such publication shall be at

the expense of the person convicted in accordance with this

regulation.

(4) Any proceedings undertaken under these regulations

shall be without prejudice to the right of the consumer to undertake any

action to seek compensation because of any loss or damages he may

have incurred as a result of the breach of these regulations.

The purpose of these regulations is in part to transpose the Scope and

objective.

provisions of Council Directive 87#102#EEC of 22 December, 1986, as

amended by Council Directive 90#88#EEC and as further amended by

Directive of the European Council 98#7#EC of 16 February, 1998, for

the approximation of laws, regulations and administrative provisions

of Member States concerning consumer credit, and these regulations

shall be applied and interpreted accordingly.