SafetyNet Credit Facility An explanation of your running account credit agreement

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1 SafetyNet Credit Facility An explanation of your running account credit agreement Before we can process your application for credit we must provide you with some important information known in legal terms as an 'adequate explanation' of the product. This information aims to assist your understanding of the agreement that you are entering into and ensure that it is appropriate for you and your financial needs. You should carefully consider the information set out in the pre-contract credit information (Standard European Consumer Credit Information) and this sheet before signing the agreement. Is the agreement suitable for the type of credit you are looking for? The agreement is a running account credit agreement. This means that it is an ongoing credit arrangement between you and SafetyNet Credit. You may borrow up to the level of your credit limit and you will receive your credit via a transfer to your bank account. You will be advised of your credit limit which will appear on your agreement and on your online statements. Your credit limit may be varied from time to time and we will confirm any changes in writing. We may increase your credit limit if you request an increase, subject to our affordability assessment. We may also reduce your credit limit as part of our responsible lending assessment if your risk profile changes. The product is suitable for short term, small sum borrowing. It is not intended for longer term borrowing requirements. What does it cost? Interest is charged on your credit account at a rate of 0.8% per day (equating to 292% per annum) for each day during which you have a balance outstanding (whether for all or part of that day) on the daily outstanding capital balance of your SafetyNet facility from and including the date of each Credit Instalment for a maximum of 40 days (i.e. a 0.80 charge for every 100 of credit per day). The rate of interest under the agreement is variable. Interest rate changes may be made up or down as a result of changes applicable to all borrowers or to our assessment of lending risk. How does it work? One of the key features of this product is that in order to be eligible to borrow you must agree to give us access to see your current bank account transactions for the past 90 days via the SafetyNet Credit facility. We use this to monitor your bank account balance so we can: Carry out an affordability assessment at both the point of application and on an ongoing basis to determine your suitability for credit Make automatic (when enabled) deposits (Credit Instalments) into your account of an agreed sum up to your credit limit when the balance reaches a certain level (the SafetyNet Level). If you don't want to use the automatic deposit facility, you can just ask us for a drawdown of credit up to your limit by contacting us when you need to. Take repayments when we can see that you have money in your account to repay us. This helps ensure that you repay the amount you owe as quickly as possible and therefore reduces the amount of interest you have to pay. In this way, by enabling automatic deposits the product can operate like an overdraft, in that you can use it automatically when you need it and we take repayments automatically up to the amount you owe whenever we see that you have the money in your account to repay the debt, subject to the rules set out below. You can enable or disable the automatic SafetyNet deposit facility at any time on line by simply pressing the 'on/off' buttons on your customer dashboard. When and how much will I have to repay?

2 The minimum repayment as set out below is the amount you are required to repay each month in order to avoid falling into arrears. However, while ever you owe us money under the agreement and we have a connection to your real time banking data, unless we agree to the contrary, we may take a repayment up to the amount you owe each time we see money coming into your bank account subject to the following conditions: We will only ever take a repayment when your bank account balance is higher than your SafetyNet Level. We will never take a repayment which reduces your balance to the SafetyNet Level and therefore triggers a Credit Instalment. To make sure this is the case whenever we take a repayment we will always leave you a balance which is at least 30 above your SafetyNet Level. Subject to the above, the repayment amount will be the full amount you owe us in outstanding capital and interest whilst leaving you a balance which is at least 30 above your SafetyNet Level. The minimum amount of money being paid into your bank account which will trigger a repayment to us is 50, unless the balance you owe us is less than 50, in which case we may take the full amount owed on a lesser amount being paid into your bank account subject to the application of the above rules. If we have not collected and you have not otherwise paid the minimum repayment for any month by the due date for payment specified in your statement, we will make an attempt to take the minimum repayment from your account to prevent you going into arrears. However this is always subject to ensuring that in doing so we will leave you a balance which is 30 above your SafetyNet Level. Further information about your minimum repayment is set out below. Every month you will receive a statement detailing your Credit Instalments, your credit limit, your minimum repayment and the date this is due for repayment and any repayments and interest applicable to your SafetyNet facility since you received your last statement. Your Minimum Repayment Because of the way in which the account operates, we expect that any debt you incur will be paid off in full when you receive your salary or other significant deposit each month. However, in some cases that may not be possible, for example if you do not receive any deposits or if you have spent a large amount such that your bank account balance, even after your salary is paid, does not exceed your SafetyNet Level plus 30 (or 30 above your overdraft limit if you don't set a SafetyNet Level). In this case, you must pay us the minimum repayment shown on your statement by the billing date specified, or your account will go into arrears. The minimum repayment for the month is as shown on your statement and will be 5% of the outstanding balance of capital and interest subject to a minimum repayment of 20, or if you owe less than 20 the actual amount outstanding. If you pay more than the minimum payment, your payment will be applied to the capital and interest balances in proportion to the respective balances. The total amount you have to repay will depend on how much you drawdown as Credit Instalments and how much of the outstanding balance you repay each month. The sooner you are able to pay off your balance, the less interest you will be charged. So for example if you borrow 100 and repay it 10 days later when your salary is deposited in your account, you will pay a total of If you only make the minimum repayment in the first 40 days (calculated as set out above) to keep your SafetyNet facility from going into arrears, your credit will cost you more. You may choose to pay off more than the minimum repayment during the first 40 days which will reduce the interest charges you incur.

3 Additional examples of how the product works in practice are attached to aid your understanding. Use of Continuous Payment Authority and manual repayments When you enter into an agreement you provide us with a continuous payment authority (CPA) so that we can collect repayments automatically from your bank account when we see deposits being made and to attempt to take the minimum payment on the due date in accordance with the terms of the agreement using the debit card you nominate for this purpose. By signing the agreement you are consenting to the use of CPA on this basis. In circumstances where we do not have access to your real time banking data for whatever reason (for example IT failure or if you withdraw our access rights), then the automatic repayment facility will not operate. In these circumstances, repayments will not be made by reference to your account balance as this will not be visible to us; instead we will notify you that we are not connected to your bank account and, unless you have otherwise paid it since the statement date, use CPA to take the full amount you owe us in capital and interest from your account on the date your salary or other regular income is next anticipated by us to be paid into your bank account and when we believe you should have sufficient funds to make the full repayment under our predictive models (the Target Date). We will notify you by , SMS text or telephone call at least 48 hours before attempting to take payments on the Target Date. If we are unsuccessful in our attempts to take payment of the full amount you owe us in outstanding capital and interest on the Target Date, then we will instead seek to take the minimum repayment from your account on the Target Date. If, for any reason, we are not able to recover the minimum payment due from you using CPA as specified by the due date for payment given to you on your statement, you will be in arrears. We will make immediate attempts to contact you by phone, and/or text message to find out why repayment was unsuccessful and arrange an alternative repayment plan. We urge you to communicate with us in the event of default; we will show forbearance if you are experiencing financial hardship and the sooner you contact us the sooner we can make alternative repayment arrangements and minimise your default costs. If we cannot communicate with you to agree alternative repayment arrangements, we may make a further two attempts to recover the minimum repayment using CPA on the next date after the Target Date your salary or other regular income is anticipated by us to be paid into your bank account and when we believe you should have sufficient funds to make the minimum repayment under our predictive models (the Second Target Date). We will notify you by , SMS text or telephone call at least 48 hours before attempting to take payments on the Second Target Date. Please note that separate payment attempts by debit card that are individually and expressly agreed with you or made by you manually via your online dashboard do not fall within the definition of CPA and are not subject to the above provisions. We will never use CPA to seek to recover part-payment (ie a sum other than the full balance outstanding or such lower amount of principal and interest due under the agreement as would leave you a bank balance which is at least 30 above your Safety Net Level (see under Timing and amounts of repayments in the agreement) or the minimum repayment) unless you instruct us to do so. In the event that access to your bank account data is restored and provided you have made the minimum repayment by the date specified in your statement, your account operation will revert to the normal operating conditions for repayment as outlined above and you can choose to enable or re-enable the automatic deposit facility if you wish. If you wish to cancel your CPA you may do so at any time by contacting us by , telephone or post or by contacting your bank directly. However, please be advised that if you do cancel the CPA you will still be liable for the outstanding balance and are required to make alternative arrangements for repayment to avoid going into default.

4 We may be able to repay any amounts we have taken using the CPA where we can see evidence that this has caused you to fall into financial difficulty or to miss priority debts such as rent, mortgage payments or utility bills. If such circumstances have occurred after we have taken a payment we would encourage you to contact us. You can also make manual repayments at any time of any amount you wish; via your SafetyNet Credit dashboard or by contacting our customer service team between 8am and 7pm Monday to Friday (public holidays excepted) and between 9am and 5pm on Saturdays in each case on What are the consequences if I cannot make the minimum repayment? If you do not have any money coming into your account and you fail to make the full minimum repayment by the due date given to you on your statement then your SafetyNet Credit facility will go into arrears and may be withdrawn. Your account will be referred to our collections team and legal proceedings may be instigated. Your account may also be referred to an external debt collection agency who may in turn look to contact you or instigate legal proceedings. Missing or incomplete payments could have an adverse effect on your credit rating making it more difficult and/or expensive for you to obtain credit in future and may result in legal proceedings. You will be charged any fees we incur in tracing you and any reasonable expenses and costs we may incur in taking other steps to enforce the agreement, including debt collection costs and all legal costs and charges for issuing court proceedings and pursuing a claim against you. Will my bank allow me to submit my internet banking details? Bank terms and conditions vary significantly. Some banks have provisions in their terms and conditions saying they may not be liable for any losses caused by fraud if a customer has intentionally or with gross negligence failed to keep security details and login details secure or has given them to a third party. This means that in the unlikely event that your use of this service was a cause of fraud on your account the bank may not reimburse any losses suffered. For the reasons outlined in our security section ( Credit.com/Home/Security) our high security standards mean this should not occur. Please also note that some banks, including Barclays, Nationwide, RBS and NatWest, reserve the right in their terms and conditions to hold customers liable for any losses caused by fraud or unauthorised transactions that occur on their account as a result of using an account aggregation service. SafetyNet Credit is not an account aggregation service and applying to SafetyNet Credit or using SafetyNet Credit should not therefore constitute a breach of such bank terms and conditions. Yodlee s service which is used by SafetyNet Credit either directly or through third party AccountScore may be considered to be an account aggregation service, but is widely used by a variety of reputable companies including many leading banks and financial institutions, and use of Yodlee s service or AccountScore s has not as far as we are aware ever been known to have given rise to fraud or unauthorised transactions. If you would like further information on how your bank would view your use of SafetyNet Credit and bank login details being provided in encrypted format to Yodlee either directly or through the AccountScore platform, you may wish to ask your bank directly for guidance in interpreting the applicable terms and conditions.

5 Your rights to withdraw and terminate You have the right to withdraw from the agreement before the end of 14 days beginning with the day after the day on which the agreement is entered into without having to give any reason. The period of withdrawal begins on the day after the date on which you receive an executed copy of the agreement (this is usually sent electronically by and is not a hard copy). You can exercise this right by writing to us at SafetyNet Credit, 32 nd Floor, Euston Tower, 286 Euston Road, LONDON NW1 3DP or calling on or by ing us at customer.services@safetynetmail.co.uk. If you withdraw you must return any monies paid to you within 30 days of exercising your right of withdrawal and pay interest accrued from the date you are given the money to the date you repay us calculated on a daily basis. Where credit is drawn down during the withdrawal period, we shall inform you, on request and without delay, of the amount of interest payable per day. You may terminate the agreement at any time by giving notice in writing and paying off any sums that are outstanding on your SafetyNet facility. Please contact us via the number, postal or address given above if you have any questions or would like further information or clarification about our agreements.

6 Examples of how your SafetyNet Account works in practice Names used for illustrative purposes only: 1. Amy has been approved for a SafetyNet Credit facility and has been assigned a credit limit of 200. Amy does not have an overdraft on her current account. Amy enables the automatic deposit setting on her SafetyNet Credit dashboard, setting her SafetyNet Level at 20. That is, Amy instructs SafetyNet Credit to ensure that whenever her current account balance falls below 20, we will transfer enough money into her account (in multiples of 20 and up to her credit limit) to increase the balance to at least 40 in credit. On the 23rd of the month, Amy's account dips below the SafetyNet Level of 20 when a standing order is paid and Amy s current account balance falls to - 50 (overdrawn). As a result, SafetyNet Credit automatically transfer a credit instalment of 100 into Amy s current account before overdraft charges are applied by her bank. This takes Amy's current account balance to 50 in credit. Amy receives a text/ message telling her that SafetyNet Credit has deposited 100 into her current account. On the 30 th of the month, Amy gets paid her monthly salary of 1,500, taking her current account balance to 1,525 (assuming Amy has spent 25 during the last week of the month). SafetyNet Credit automatically deduct a repayment of from Amy's account, made up of the 100 borrowed plus 6.40 interest (at an interest rate of 0.8% per day over 8 days). Amy receives a text/ telling her that SafetyNet Credit has taken a repayment of from her current account and that her outstanding balance with SafetyNet Credit is now Ben has been approved for a SafetyNet credit facility and has been assigned a credit limit of 200. Ben does not have an overdraft on his current account. Ben enables the automatic deposit setting on his SafetyNet Credit dashboard, setting his SafetyNet Level at 50. That is, Ben instructs SafetyNet Credit to ensure that whenever his current account balance falls below 50, we will transfer enough money into his account (in multiples of 20 up to his credit limit) to increase the balance to at least 70 in credit.

7 On the 15 th of the month a direct debit takes Ben s current account balance to - 40 (overdrawn). As a result, SafetyNet Credit automatically transfers 120 into Ben's account to increase his balance to 80 and notifies Ben of this by text/ message. On the 20 th of the month, Ben s current account balance falls back to 0. As a result, we automatically transfer 80 (the maximum remaining of Ben's SafetyNet Credit Limit) into Ben's current account so the account balance increases to 80. Ben receives a text/ telling him that SafetyNet Credit has deposited 80 into his current account and that he has now reached his SafetyNet Credit Limit of 200 and no further instalments of credit will be supplied by SafetyNet Credit unless the outstanding balance is repaid. On the 28 th of the month, Ben is paid his monthly salary of 1,225. SafetyNet Credit take the full amount outstanding upon receipt of the salary. This is comprising the amount borrowed ( 200) and interest charges of at 0.8% per day on each drawdown of credit ( 120 borrowed for 14 days = and 80 borrowed for 9 days = 5.76). Ben is advised accordingly that his SafetyNet balance is now Carol has been approved for a SafetyNet credit facility and has been assigned a Credit Limit of 250. Carol has an authorised overdraft of 100 on her current account. Carol enables the automatic deposit setting on her SafetyNet Credit dashboard, setting her SafetyNet Level at That is, whenever Carol s current account balance falls below - 80 (overdrawn), she has instructed SafetyNet Credit to increase her balance to at least - 60 (overdrawn), up to her credit limit. On the 15 th of the month a debit card payment takes Carol s current account balance to (overdrawn). As a result we automatically transfer 100 into Carol s current account before unauthorised overdraft charges are applied by her bank. Carol now has a current account balance of - 60 (overdrawn) and is informed of the deposit by text/ message. On the 20 th of the month a cheque for 250 is paid into Carol's account which takes the account balance to 190. We deduct from the account to repay the amount borrowed ( 100) plus interest (0.8% per day for 6 days = 4.80). Carol receives a text telling them that we have taken this payment and that her SafetyNet balance is now 0.

8 4. Ellen has enabled the automated SafetyNet deposit setting on her dashboard. On the 10 th of the month 180 is transferred to her account in accordance with her SafetyNet instruction. On the 20 th of the month an IT failure means that SafetyNet Credit do not have access to Ellen s real time bank account data. Ellen receives a text informing her that the SafetyNet automated deposit and repayment functionality is now switched off and that a scheduled repayment for the full outstanding amount will be taken on her next payday (30 th ), alternatively Ellen can make a manual repayment of any amount she wishes before her payday. On the 27 th of the month, Ellen receives an notifying her that SafetyNet Credit will take full scheduled repayment totalling on her next payday (30 th ). The payment will comprise principal balance borrowed plus interest (reflecting a charge of 0.8% per day for the 21 days she has had the credit). The tells Ellen to contact SafetyNet Credit if she is in financial difficulty and cannot make the repayment. On the 30 th of the month a scheduled repayment of is taken to clear Ellen s balance. Ellen receives a text informing her that SafetyNet Credit have taken this payment and that her SafetyNet balance is now 0. The following month the connection to Ellen s bank account is restored and Ellen s automated SafetyNet Facility is switched back on. Ellen is informed of this by text/ .