Except as set out in this section, MCOB applies if the customer of a firm carrying on home finance activities is, at the time that the home finance activity is carried on, resident in:
the United Kingdom; or
an EEA State, where the activity is carried on:
from an establishment maintained by the firm (or its appointed representative) in the United Kingdom; and
in respect of a regulated mortgage contract entered into before IP completion day.
The territorial scope of MCOB 3A Financial promotions and communications with customers) is set out in MCOB 3A.1.13R to MCOB 3A.1.16R (Territorial scope and Exceptions to territorial scope), rather than in this section.
Parts of MCOB relate to distance contracts (or distance mortgage mediation contracts and distance home purchase mediation contracts) with consumers. These expressions are derived from the Distance Marketing Directive, and the following paragraphs provide some guidance to firms on their meaning:
The rules which implemented the Distance Marketing Directive apply for distance contracts with 'any natural person who is acting for purposes which are outside his trade, business or profession', for which the term 'consumer' has been adopted. Examples of individuals who would be regarded as consumers include:
To be a distance contract, a contract must be concluded under an 'organised distance sales or service-provision scheme' run by the contractual provider of the service who, for the purpose of the contract, makes exclusive use (directly or through an intermediary) of one or more means of distance communication up to and including the time at which the contract is concluded. So:
the firm must have put in place facilities designed to enable a customer to deal with it exclusively at a distance, such as facilities for a customer to deal with it purely by post, telephone, fax or the Internet. If a firm normally operates face-to-face and has no facilities in place enabling a customer to deal with it customarily by distance means, the rules which implemented the Distance Marketing Directive will not apply. A one-off transaction effected exclusively by distance means to meet a particular contingency or emergency will not be a distance contract; and
there must have been no simultaneous physical presence of the firm and the other party to the contract throughout the offer, negotiation and conclusion of the contract. So, for example, contracts offered, negotiated and concluded over the Internet, through a telemarketing operation, or by post will normally be distance contracts.
The mere fact that an intermediary (acting for the supplier or for the consumer) is involved, does not make the sale of a financial product or service a distance contract. There will not be a distance contract if there has been simultaneous physical presence of the intermediary and the consumer at some stage in the offer, negotiation and conclusion of the contract.
