(a) the total amount and time needed to fully pay off their debts if they pay only the minimum payment each month; and
(b) the amount of debt that would accumulate by the end of 6 months if they make no payments in the next 6 months.
What is the purpose of sending borrowers the disclosure statements?
The disclosure is intended to make the costs of borrowing more apparent to borrowers. It illustrates how debt will accumulate if borrowers do not pay their monthly bills for credit cards or revolving unsecured credit facilities in full.¹²
¹² For avoidance of doubt, the disclosure statement does not alter a borrower’s repayment obligations in any way. The borrower remains subject to the terms and conditions that have been agreed with his FIs in relation to his credit cards and unsecured credit facilities. The 6-months period illustrates how the amount outstanding will accumulate if no payment is made over the next 6 months.