The firm's starting point should be that all customers have the capacity to enter into a finance agreement unless or until there are indicators that suggest otherwise.
Firms are not expected to undertake clinical assessments of customers' mental capacity – they can only be expected to form a suspicion that a customer may have some form of mental capacity limitation where they have information or evidence (possibly from observing specific behaviour by the customer) which triggers such a suspicion.
There is no exhaustive list of indicators that may lead a firm to suspect that a customer might have some form of mental capacity limitation. However, here are some examples:
- a relative, close friend, carer or clinician raises concerns with the firm;
- the customer clearly does not understand what they are applying for;
- they are clearly unable to understand the information and explanations provided;
- they appear confused about the personal or financial information being sought by the firm;
- they appear willing to enter an agreement they clearly cannot afford;
- they are unable to communicate their decision;
- they have no awareness of their own financial circumstances; and/or
- the information they have provided is inconsistent with other information provided.
Amongst the most common potential causes of mental capacity limitations are:
- a mental health condition;
- a learning disability;
- a developmental disorder;
- a neurological disability or brain injury;
- alcohol or drug (including prescribed drugs) induced intoxication.