What must be disclosed to borrowers of unsecured credit who have yet to pay their debt?
Financial institutions (FIs) must disclose to borrowers how much debt they will accumulate if they haven't paid their prior month's credit card and unsecured credit facilities.
The disclosure statement lets borrowers see how their debt will accumulate if not paid on time, so they can make informed debt repayment decisions.
It must be sent to borrowers who have not paid the prior month’s bills for credit cards or revolving unsecured credit facilities in full.
What to Include
The disclosure statement should include:
- The total amount and time needed to fully pay off their debts, if they pay only the minimum payment each month.
- The amount of debt they would accumulate at the end of 6 months, if they make no payments during that time.