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  • Section Five Rules of Information Disclosure

    • Article 18: General disclosure

      A Creditor is required to provide the Borrower in writing with the Initial Disclosure information stated in Article 21 below. The Initial Disclosure must be made in clear and easy-to-read language duly highlighting terms and conditions which may affect the Borrower's rights and obligations, and the Creditor must use any format specified by SAMA from time for that purpose. Furthermore, the specific terms contained under Article 21 (1) (b) and (c) and information on the Total Cost of Financing must be included in the Initial Disclosure statement.

    • Article 19: Manner of Disclosure

      1. For the purpose of these Regulations, a Creditor must provide the Borrower with a written disclosure statement that provides the information required by these Regulations to be disclosed.
      2. A disclosure statement may be part of a Financing Contract or an application for a Consumer Financing or may be an annex to the foregoing documents.
      3. The Creditor is required to obtain written acknowledgement from the Borrower confirming he/she has received and read the Initial Disclosure statement.
      4. Information disclosed in a disclosure statement may be based on a reasonable assumption or estimate and such information must be clearly identified to the Borrower as an assumption or estimate.
      5. A disclosure statement, or consent in relation to a disclosure statement, must be in plain, clear and concise language. It must be presented in a manner that is logical and likely to bring to the Borrower's attention the information required by these Regulations to be disclosed.
      6. If the Borrower consents by Authenticated Communication, the disclosure statement may be provided by electronic means in an electronic form that the Borrower can retrieve and retain.
      7. A disclosure statement is deemed to be provided to the Borrower:
       
             		(a)on the day recorded as the time of sending by the Creditor's server, if provided by electronic means, and the Borrower has consented to receive it by electronic means.
       
       
             		(b)on the day recorded as the time of sending by a fax machine, if provided by fax and the Borrower has consented to receive it by fax;
       
        (c)ten Calendar Days after the postmark date, if provided by registered mail; or
       
        (d)when it is received, in any other case.
       

    • Article 20: Timing of Initial Disclosure

      A Creditor that proposes to enter into a Financing Contract with a Borrower must provide the Borrower with the Initial Disclosure statement required by these Regulations prior to or upon entering into the Financing Contract by the Borrower and the Creditor.

    • Article 21: Initial Disclosure – Content

      1. A Creditor that enters into a Financing Contract with a Borrower must provide the Borrower with an Initial Disclosure statement that includes the following information:
       
             		(a)The initial limit of the Financing, if it is known at the time the disclosure is made;
       
       
             		(b)The APR and the annual Term Cost;
       
        (c)The nature and amounts of any recurring non-Term Cost charges;
       
        (d)The minimum payment during each payment period and the method for determining it;
       
        (e) Each period for which a statement of account is to be provided;
       
        (f)The date on and after which Term Cost accrues;
       
        (g)The particulars of all charges and administrative fees that may be imposed;
       
        (h)information about any Optional Feature in relation to the Financing Contract that the Borrower accepts in writing, the charges for each Optional Feature and the conditions under which the Borrower may cancel that feature;
       
        (i)the manner in which the Term Cost is calculated; and
       
        (j)information on all applicable charges including reporting of Default cases to a Licensed Credit Bureau or appropriate Regulatory Authorities as per SAMA's approval.
       
      1. If the initial limit of the Financing is not known when the Initial Disclosure statement is made, the Creditor must disclose it in:
       
             		(a)The first statement of account provided to the Borrower; or
       
       
             		(b)In a separate statement that the Borrower receives on or before the date on which the Borrower receives that first statement of account.
       
      1. If a Financing Contract is amended, the Creditor must, in writing and within 30 Calendar Days or more before the amendment takes effect, disclose to the Borrower and Guarantor (if any), any changes to the agreement pertaining to items referred to under Article 21(1) except changes to the following:
       
             		(a)A decrease in charges other than Term Cost or Default charges;
       
       
             		(b)A change concerning information about any Optional Feature in relation to the Financing Contract.
       
      1. An amendment referred to in Article 21(3) must be disclosed in the first statement that is provided to the Borrower after the amendment is made.
      2. If a Creditor offers to defer or skip a payment or installment under a Financing Contract, the Creditor must, with the offer, disclose in a prominent manner whether Term Cost will continue to accrue during any period covered by the offer if the offer is accepted. Creditors must ensure compliance with Article 14(5), i.e. the maximum Term to Maturity may not exceed 5 years.