Which document must consumer credit firms provide to clients before entering into an agreement?

Consumer credit firms are required to provide a pre-contractual disclosure document to clients before entering into any agreement. This document is designed to ensure that clients have all the necessary information to make an informed decision about the credit product they are considering. It typically includes key details such as the terms and conditions of the agreement, the cost of credit, interest rates, and any fees associated with the credit. This transparency is essential for fostering trust and integrity in the consumer credit industry.

The requirement for this disclosure is mandated by regulations that aim to protect consumers from misleading practices and to enhance their understanding of financial commitments. By ensuring that clients receive this information in advance, firms can help clients make better choices regarding their borrowing options and understand their obligations.

Other options, such as providing a consumer credit report, an annual financial statement, or a client consent form, do not fulfill the same purpose or are not standard requirements before entering into a consumer credit agreement.