TERMS OF USE

Terms of use

CHIP FINANCIAL LIMITED – TERMS OF USE

PLEASE READ THESE TERMS OF USE CAREFULLY BEFORE USING THE CHIP SERVICE

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Chip is our app. We use other firms who specialise in securely connecting us to your bank account, so that we can look at transaction data to calculate little amounts to put aside and offer you a range of features and products.

We use another firm to take direct debit payments from your account. Your money is sent to an authorised e-money issuer who will provide you with a digital wallet and safeguard your money. Together this makes up the system behind the app.

Some of the things Chip does are regulated by the FCA, but none of the services that we offer to you are covered by the Financial Services Compensation Scheme.

Chip is free to use but we have some premium features that we hope you will like. You can stop using Chip at any time.

You really should read the terms of use below.

General Provisions

1. Our agreement

1.1 The Chip website, the services provided by Chip, any Chip applications (including the mobile application (the "App")) and the Chip algorithm (the “Algorithm”) together make up our "Service". In using the Service, you confirm that you accept these terms of use ("Terms of Use") and that you agree to be bound by them. If you do not agree to these Terms of Use, you must not use the Service.

1.2 These Terms of Use (together with our Data & Privacy Notice) set out the terms on which you may make use of the Service and set out in detail your rights and responsibilities to us and our rights and responsibilities to you during your use of the Service. These Terms of Use (as amended from time to time) will apply to Service until such time as either you or we terminate this agreement.

1.3 Please read these Terms of Use carefully before you start to use the Service. You may request a copy of these Terms of Use at any time.

2. About Chip

2.1 Chip Financial Limited ("Chip", "we" or "us") is a company registered in England and Wales whose registered office is at 232 Shoreditch High Street, London, E1 6PJ, UK, and whose registered number is 10113174.

2.2 Chip Financial Limited (FRN: 902027) is:

2.2.1 an agent of Prepaid Financial Services Limited, which is authorised and regulated under the Electronic Money Regulations 2011;

2.3 If you wish to contact us for any reason, you can contact us through the App, email us at hello@getchip.uk or write to us at 232 Shoreditch High Street, London E1 6PJ.

2.4 If we need to contact you, we will email you but, depending on the nature of what we need to tell you we may use the App or SMS messaging.  All information or notifications that we provide to you will be in English.

3. What we do

3.1 The Chip Service is an automated service that calculates how and when you can make saves from your patterns of spending and periodically moves money from your bank account into an e-money wallet which we create on your behalf (“Wallet”).

3.2 Chip also offers a premium subscription service (“Chip X”) which includes access to additional products and services. The amount of our fees, and the frequency with which we will charge you for accessing Chip X (and any future service tier or product) will be published on our website from time to time and will be deducted from your Wallet. If you don’t have enough in your Wallet to cover the subscription or product fee, we will charge your stored payment card for this purpose or collect the amount owed by direct debit.  

3.3 Where we offer features such as goals or target dates for your Wallet, these are for information purposes to help you manage your finances. We are not promising that the Service will enable you to meet your goal or your desired target date.

3.4 We may add, amend, suspend or remove products or services from time to time.

4. Eligibility

4.1 To use the Service, you must be at least 18 years old and a UK resident.

4.2 To register to use the Service you must provide us with:

4.2.1 your full name;

4.2.2 your residential postal address (not a PO Box);

4.2.3 details of your own UK bank account (“Nominated Account”);

4.2.4 a direct debit mandate in respect of your Nominated Account;

4.2.5 your own mobile phone number; and

4.2.6 if requested, your National Insurance number.

4.3 When you register for the Service, you acknowledge that we and our partners may carry out checks on your identity to satisfy anti-money laundering and terrorist financing legislation, fraud checks, and other applicable legal requirements. We may also carry out other relevant checks with third parties as described in our Data & Privacy Notice, such as credit checks. Your right to use the Service is restricted until you have satisfied our customer due diligence checks.  Further checks may be needed where we think the circumstances require it or to comply with our ongoing responsibilities in relation to customer due diligence and we will tell you about any additional requirements.

4.4 You must inform us promptly of any changes to your personal information.

4.5 We may apply additional eligibility criteria for specific products, such as lending or borrowing.  

4.6 You may only have one account with Chip at any time. Except for people or businesses that Chip has authorised in writing to register accounts on behalf of their employees or clients, Chip prohibits the registration of, and you agree that you will not register, an account for anyone other than yourself.

4.7 We reserve the right to refuse access to the Service, entirely at our discretion.

5. Getting Started

5.1 To use the Service, we will ask you to provide us with read-only access to information from and about your bank account(s). To do this, we alternatively use one of our trusted partners, TrueLayer Ltd or SaltEdge Inc., who will take you through a secure process by which you can provide your explicit consent to enable Chip to access and use your account information to provide the Service. We will periodically need to ask you to renew your consent.

5.2 You may withdraw or fail to renew consent to access your account information at any time through the App, but we will no longer be able to provide the Service for you if you do.

5.3 In order to provide the Service, we utilise the Algorithm to make calculations about your spending patterns and requirements, in order to suggest and process saves on your behalf.

5.4 Once the Service has calculated an appropriate amount (a “Save”), up to a maximum amount per Save of £100, the Service will notify you of its intention to make a debit from your Nominated Account approximately six hours following the notification.

5.5 You may stop any individual Save by following the instructions to cancel the transaction within the Service. Otherwise, we will debit the Save from your Nominated Account by direct debit or using your stored payment card and transfer the funds to your Wallet.

5.6 After processing a direct debit instruction or card payment, your Save may take up to ten working days to appear in your Wallet. While being processed neither you or we will have access to these funds and we will not be able to return the money to your Nominated Account. If you are likely to need that money you should cancel that Save.

5.7 We may also facilitate the contribution of lump sum contributions to your Wallet. Lump sum contributions may be limited as to the amount and/or frequency. If so, these will be set out on our website.  

5.8 In using the Service, you are still responsible for ensuring that you have sufficient funds available to meet your outgoings as they become due.

5.9 When you register for the Service, we will ask you to set up a payment method, such as a card or direct debit, to allow the processing of Save. We use Bottomline Payment Services Limited trading as First Capital Cash Flow to process direct debit payments. First Capital Cash Flow is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (FRN: 616279) for the provision of payment services.

6. Account security

6.1 You are responsible for maintaining the security of your account and the secrecy of your Chip password. If you know or suspect that anyone else knows or has obtained your password and/or has accessed your account, you must immediately notify us at hello@getchip.uk and change your password.

6.2 If you intentionally or negligently share your Chip credentials or enable a third party to use your Chip account, whether fraudulently or not, you are liable for any losses incurred in respect of an unauthorised transaction.

7. Fees

7.1 The basic Service, including our account information service, is provided free. A monthly subscription fee is payable for Chip X. Chip may be entitled to additional fees or charges in connection with a specific product. Details of the charges will be provided.

7.2 Fees will be deducted from your Wallet monthly. If you do not have sufficient funds in your Wallet, we may add any fees due to your next Save.

8. Keeping your money safe

8.1 When you set up an account with Chip, we will on your behalf open an e-wallet with our trusted partner, Prepaid Financial Services Limited (the “Wallet Provider”). The Wallet Provider is a company incorporated in England and Wales whose registered office is at Fifth Floor, Langham House, 302-308 Regent Street, London W1B 3AT and whose registered number is 6337638. The Wallet Provider is an authorised electronic money institution authorised and regulated by the Financial Conduct Authority (FRN: 900036).

8.2 By agreeing to these Terms of Use, you are also entering into an agreement with the Wallet Provider. Their terms of use are incorporated by reference.  

8.3 The Wallet Provider is obliged to safeguard your money, which they will do by placing funds into a segregated account. If Chip ceases to trade, or becomes insolvent, the Wallet Provider will arrange for the redemption of the electronic money in your Wallet. If the Wallet Provider ceases to trade, or becomes insolvent, Chip will make claims for the redemption of your electronic money on your behalf. Even though your funds are segregated, you should know that your money is pooled with money belonging to other Chip users and other clients of the Wallet Provider, which means that if the Wallet Provider is unable to redeem the funds in your Wallet, your claim will not be against a specific account but against the pool in general.

9. Redeeming money and transfers

9.1 Through Chip, you may require that funds held in your Wallet be transferred back to your Nominated Account at any time. This process may take up to five working days following a withdrawal request. If you do not have sufficient available funds in your Wallet to cover the amount of the requested transfer, your request for the transfer will be declined.

9.2 Where we facilitate transfers to other Chip users, you may instruct us to do this. We do not need to make any transfer if we feel it contravenes our community standards.

10. If things go wrong

10.1 We endeavour to provide a first-class service to our users but if we fail to meet your expectations you should contact us. We aim to initially respond to any complaints within two business days of receipt and provide you with a final response within 15 business days. In exceptional circumstances, we may provide a full reply within 35 business days.  

10.2 If you are not happy with the outcome of your complaint you may refer it to the UK Financial Ombudsman Service, whose details are available at www.financial-ombudsman.org.uk or by telephoning 0800 023 4567. You may request a copy of our complaints-handling procedure at any time.

10.3 In addition, please note that disputes may be submitted for online resolution to the European Commission Online Dispute Resolution platform.

11. Availability

11.1 The Service can and will provide you with updates as to your balance and recent transactions. You acknowledge and agree that the Service may be delayed by 24 hours or more and that we cannot guarantee that any balances or latest transaction information is true and accurate. As such, you should use the information provided as guidance, and not rely on it as evidence of a certain balance being available in your account at any given time.

11.2 We do not guarantee the availability of the Service and we reserve the right to vary, suspend, withdraw or discontinue the Service, or your access to it, at any time without notice to you. We will not be liable to you if, for any reason, the Service is unavailable at any time or for any period. Your deposited funds will continue to be available at all times via the E-Wallet Provider.

11.3 We may, from time to time, need or decide to perform maintenance, upgrades or emergency repairs, which may affect the availability of the Service.

12. Our liability

12.1 We are responsible to you for foreseeable loss and damage caused by us. If we fail to comply with these Terms of Use, we are responsible for the loss or damage you suffer if it is a foreseeable result of our breach or a failure to use reasonable care and skill. Loss or damage is foreseeable if either it is obvious that it will happen or if, at the time you accepted these terms, both we and you knew it might happen.

12.2 We are not responsible for consequential loss. This includes liability for:

12.2.1 costs, fees (including overdraft fees), interest charges or penalties incurred as a result of the Service transferring automated Saves from your Nominated Account to your Wallet; or

12.2.2 the consequences of any change to your credit rating or equivalent which may arise from you failing to meet any payment from your Nominated Account when due because of your use of the Service.

12.3 We do not exclude or limit in any way our liability to you where it would be unlawful to do so. This includes liability for death or personal injury caused by our negligence or the negligence of our employees, agents or subcontractors or for fraud or fraudulent misrepresentation.

12.4 When we are liable for damage to your property. If defective digital content that we have supplied damages a device or digital content belonging to you, we will either repair the damage or pay you compensation. However, we will not be liable for damage that you could have avoided by following our advice to apply an update offered to you free of charge.

12.5 We are not liable for business losses. The App is for private use. If you use the App for any commercial, business or resale purpose we will have no liability to you for any loss of profit, loss of business, business interruption, or loss of business opportunity.

12.6 Limitations to the App and the Service. The App and the Service are provided for general information and entertainment purposes only. They do not offer advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of information obtained from the App or the Service. Although we make reasonable efforts to update the information provided by the App and the Service, we make no representations, warranties or guarantees, whether express or implied, that such information is accurate, complete or up to date.

12.7 Check that the App and the Service are suitable for you. The App and the Service have not been developed to meet your individual requirements. Please check that the facilities and functions of the App and the Service meet your requirements.

12.8 We are not responsible for events outside our control. If our provision of the Service or support for the App or the Service is delayed by an event outside our control, then we will contact you as soon as possible to let you know and we will take steps to minimise the effect of the delay. Provided we do this we will not be liable for delays caused by the event but if there is a risk of substantial delay you may contact us to end your contract with us and receive a refund for any Service you have paid for but not received.

13. Our intellectual property

13.1 Chip hereby grants you a non-exclusive, non-transferable, revocable license to use the App. All other rights in the App are reserved by Chip and its licensors.

13.2 We reserve all rights in the name "Chip", the Getchip.uk domain name and all related domains and sub-domains, our logo and our service marks, brand names, trading names and/or trade marks appearing anywhere on the Service.

13.3 Other trade marks, products and company or brand names mentioned on the Service may be the trade marks of their respective owners or licensors and all rights in such trade marks are reserved to their respective owners or licensors.

13.4 Nothing in these Terms of Use should be construed as granting any license or right to use any of the trade marks or domain names referred to in this paragraph.

14. Community standards

14.1 You must not:

14.1.1 access without authority, penetrate, interfere with, damage or disrupt (or attempt to do any of the same) any part of the Service, including  the account of any other user, or its security measures, any servers, other equipment or networks connected to the Service or on which it is stored or any software used in the provision of the Service, including in each case by transmitting any worms, computer viruses, malware, logic bombs, trojan horses, spyware, harmful components or any other software, code or data of a corrupt, destructive, malicious or disruptive nature;

14.1.2 inject content or code or otherwise alter or interfere with the way any page of the Service is rendered or displayed in a user’s browser or device;

14.1.3 access the Service via a means not authorised by Chip, including, but not limited to, automated devices, scripts, bots, spiders, crawlers or scrapers (except for standard search engine technologies which are used by a search engine with Chip’s express written consent);

14.1.4 use the Service for any illegal, fraudulent or unauthorised purpose;

14.1.5 change, modify, adapt or alter the Service or change, modify, adapt or alter another website so as to inaccurately imply an association with the Service or with Chip.

14.2 If you wish to change the Nominated Account details, you can do so follow the instructions in the Help Centre to deregister your Nominated Account and set up the Service with new Nominated Account details. Your Wallet (and any goals you have set within the App) is linked to your Nominated Account and we will arrange for the funds in your Wallet to be transferred to your original Nominated Account before opening a new Wallet for your New Nominated Account.

14.3 Chip does not accept unsolicited content, information, ideas, suggestions or other materials except where Chip has set out specific criteria and conditions for submitting them and you agree not to submit them except in accordance with those criteria and conditions.

14.4 Where you do submit unsolicited content, information, ideas or suggestions, you agree that we may use such content, information, ideas or suggestions for any purpose whatsoever, including, without limitation, developing and marketing products and services without any liability or payment or recognition of any kind to you.

15. Closing your account

15.1 You can give us notice to close your account from the ‘Settings’ menu within the App at any time unless:

15.1.1 we are currently processing payments for you;

15.1.2 the terms of a specific product, service or feature, including Chip X, is subject to additional notice requirements, in which case those notice requirements will apply; or

15.1.3 you have any current investments, in which case we will close your account when these have been realised or they have matured.

16. Termination and suspension

16.1 We may suspend the Service at any time by contacting you if you have broken these Terms of Use in a serious way. If what you have done can be put right, we will give you a reasonable opportunity to do so. We will give you at least two months’ notice if we intend to end your rights to use the Service.

16.2 If we end your rights to use the Service:

16.2.1 you must stop all activities authorised by these terms, including your use of the App and the Service;

16.2.2 you must delete or remove the App from all devices in your possession.

17. Your Wallet on closure or termination

17.1 If we end your rights to use the Service or if you close your Chip account, we will arrange for all funds in your Wallet to be returned to your Nominated Account without delay.

18. Changes to these Terms of Use

18.1 We may need to change these Terms of Use to reflect changes in law, regulation or best practice or to deal with additional features which we introduce.

18.2 Unless required by law or regulation or to implement non-material corrections (in which case we may make changes immediately), we will give you reasonable advance notice through the Service.

18.3 Your use of the Service after the effective date of new Terms of Use (or engaging in such other conduct as we may reasonably specify) constitutes your agreement to the new Terms of Use. If you do not accept the proposed changes you may close your account.

19. Update to the App and changes to the Service

19.1 From time to time we may automatically update the App and change the Service to improve performance, enhance functionality, reflect changes to the operating system or improve system security. Alternatively, we may ask you to update the App for these reasons.

19.2 If you choose not to install such updates or if you opt out of automatic updates you may not be able to continue using the App and the Service.

19.3 The App will always work with the current or previous version of the operating system (as it may be updated from time to time) and match the description of it provided to you when you bought it.

20. Linking to our website

20.1 You may link to any page of our Website, provided that you do so in a way that is legal and that does not damage or take advantage of our reputation nor seeks to do so.

20.2 You must not suggest any form of association, approval or endorsement on our part where none exists.

20.3 You must not remove, obscure or modify any advertisements, copyright notice or other information on our Website. Our Website must not be framed on any other website.

20.4 The website in which you are linking must comply in all respects with the content standards set out in these Terms of Use and we reserve the right to withdraw linking permission without notice.

21.1 Your browsing and interaction on any other website or your use of other services, including websites and services which have a link to the Service, is subject to the rules and policies of the relevant website or service. Please read the rules and policies applicable to that website or service before proceeding.

21.2 The Service, or communications from it or comments within it, may include links to third-party websites, applications or features ("Third Party Services"). These links are provided for your information only.

21.3 Chip does not control, maintain or endorse Third Party Services and you acknowledge and agree that your use of them is at your own risk. We assume no responsibility for the content or operation of Third Party Services and we will not be liable for any loss or damage that may arise from your use of them (or such content).

22. General

22.1 We may transfer this agreement to someone else. We may transfer our rights and obligations under these terms to another organisation. We will always tell you in writing if this happens and we will ensure that the transfer will not affect your rights under the contract.

22.2 You need our consent to transfer your rights to someone else. You may only transfer your rights or your obligations under these terms to another person if we agree in writing.

22.3 No rights for third parties. This agreement does not give rise to any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this agreement.

22.4 If a court finds part of this contract illegal, the rest will continue in force. Each of the paragraphs of these terms operates separately. If any court or relevant authority decides that any of them are unlawful, the remaining paragraphs will remain in full force and effect.

22.5 Even if we delay in enforcing this contract, we can still enforce it later. Even if we delay in enforcing this contract, we can still enforce it later. If we do not insist immediately that you do anything you are required to do under these terms, or if we delay in taking steps against you in respect of your breaking this contract, that will not mean that you do not have to do those things and it will not prevent us taking steps against you at a later date.

22.6 Which laws apply to this contract and where you may bring legal proceedings. These Terms of Use are governed by English law and you can bring legal proceedings in respect of the Service in the English courts. If you live in Scotland, you can bring legal proceedings in respect of the Service in either the Scottish or the English courts. If you live in Northern Ireland, you can bring legal proceedings in respect of the Service in either the Northern Irish or the English courts.

Chip and your overdraft

23. Using Chip in your overdraft

23.1 If you wish to use Chip in conjunction with your overdraft, you must activate the Overdraft Save feature. Chip will not be responsible for any interest or charges that you may incur in respect of any Save as a result of activating the Overdraft Save feature.

24. Smart Credit

24.1 If you do not want to use your bank’s overdraft and you are a Chip X user, you can apply for Smart Credit. Smart Credit allows eligible users (Borrowers) to borrow money from other Chip users (Lenders) when they need it most.

24.2 Smart Credit provides a 12-month facility which you can draw upon as and when you need it. You must pay at least the monthly minimum amount and, at the end of the term, all the outstanding money that you have borrowed.

24.3 Borrowers must pay interest to the Lenders and a Platform Charge to Chip. How much is subject to eligibility and is set out in the Borrower’s credit agreement.

24.4 By default, activating Smart Credit instructs Chip to set up a repayment goal and, if you have any outstanding balance, to transfer a proportion of each Save to your repayment goal. You may choose the proportion of each Save that you wish to move to your repayment goal, subject to a minimum of 20%.

24.5 You may use all or any of the funds in your repayment goal to repay money that you owe at any time. Payments will be applied against any accrued interest and then in reducing the principal amount of your loan(s). You will be not be able to withdraw or redeem funds in your repayment goal unless your Smart Credit balance has been reduced to zero.

24.6 Chip will collect payments from Borrowers in the following order:

24.6.1 from a Chip repayment goal;

24.6.2 from your Chip Wallet, whether or not you have other goals set;

24.6.3 from your stored payment card or by direct debit.

24.7 If you apply for Smart Credit you must maintain your Account throughout the term of the facility. If you want to cancel your Chip X subscription you should contact us. We can require you to repay the outstanding amount of the loan if:

24.7.1 you close your Chip Account, or

24.7.2 you disconnect your Nominated Bank Account (or do not re-authorise access when asked to do so) for more than thirty days.

Additional terms for P2P Lenders

25. What does Chip do in P2P lending?

25.1 Chip enables eligible Chip users (Lenders) to come together to lend money to other Chip users (Borrowers) when they need it most. We will administer the fundraising process for each Loan. A Loan may be from one Lender or made up of a number of Loan Parts where each Loan Part is held by a different Lender. Chip determines which Loan Parts are made available to Lenders and Borrowers.

25.2 We also:

25.2.1 arrange for the receipt of each Lender’s Funds before paying the aggregate Loan to the Borrower;

25.2.2 arrange for the receipt of the repayment of capital and/or interest from a Borrower and the distribution to each Lender in accordance with their entitlements;

25.2.3 undertake steps to procure (or will arrange that steps are taken to procure) the repayment of a Loan by the Borrower; and

25.2.4 undertake to exercise or enforce (or will arrange for the exercise or enforcement of) the Lenders’ rights under a Loan Agreement to be enforced.

25.3 We do not:

25.3.1 provide credit ourselves;

25.3.2 give investment advice on the merits of taking part in peer-to-peer lending or otherwise; or

25.3.3 provide legal or tax advice.

26. No FSCS

26.1 P2P lending is not covered by the Financial Services Compensation Scheme (FSCS) and you will not be entitled to any compensation if Chip fails.

27. Additional eligibility requirements

27.1 To become a Lender:

27.1.1 you must be (and continue to be) a Chip X user;

27.1.2 complete one of our Lender classification statements each year; and

27.1.3 demonstrate to us that P2P lending is an appropriate investment for you by completing our questionnaire.

27.2 Please note that we may ask you for additional information from you if we this this is necessary to complete our customer due diligence. Please see paragraph 4.3 of our Terms of Use for additional details.

28. Activating P2P lending functionality

28.1 P2P lending is a feature available to Chip X users, but you must enable this feature through your account settings before you may become a Lender. You may end your subscription to Chip X but your access to any money you have lent is dependant upon the operation of paragraph 38.

28.2 Enabling P2P lending constitutes your continuing instruction to us to acquire Loan Parts on your behalf. Chip will automatically select Loan Parts meeting the Product Criteria. The Lender accepts that the acquisition of Loan Parts on behalf of the Lender will be binding upon them.

28.3 Each Lender irrevocably appoints us as their agent and authorises us to:

28.3.1 enter into the Loan Agreement as agent for the Lender and, at any time whilst the Loan Agreement subsists, to vary the Loan Agreement on behalf of the Lender;

28.3.2 complete the Loan and upon draw down transfer the Loan from the Lender’s Wallet to the Borrower;

28.3.3 to sell or purchase Loan Parts on a continuing basis in line with your instructions and these Terms of Use; and

28.3.4 to execute such documentation as Chip may consider necessary or prudent to give effect to the foregoing.

28.4 We will create a separate P2P account within your Wallet for P2P lending. You can add funds to your P2P account (Funds) from your Chip Wallet, by bank transfer or debit card payment.

28.5 Chip will endeavour to allocate available Loan Parts which meet the Product Criteria to a Lender to reduce the uninvested cash balance of your Funds as quickly as possible. However, in doing so it will have regard to (a) the need to balance the speed with which Funds are invested and the level of diversification of a Lender’s portfolio loans; and (b) the objective of achieving fairness between Lenders who wish to acquire similar loan parts at the same time.

28.6 Loan Parts may be acquired:

28.6.1 as part of a new Loan; or

28.6.2 from another Lender in relation to an existing Loan.

28.7 We cannot guarantee the availability of Loan Parts which meet the Product Criteria or the diversification requirement. This may mean that Funds may remain in your Wallet without being invested. Lenders are responsible for monitoring their account for uninvested Funds. We will provide you with a monthly report as to the activity within your P2P account. We will not be liable for any loss of interest arising due to the lack of Loan Parts meeting the Product Criteria.

28.8 Income and capital repayments received by you will be paid to your P2P account but are not included within your Funds to be reinvested.

29. Assessing credit risk

29.1 After we receive an application for a loan, we will notify the Borrower as to whether their application has passed our credit analyst team’s initial assessment. If we proceed to undertake a credit risk assessment, we will assign a Risk Score which we use in building a portfolio for you.

29.2 Our assessment of credit risk and the assignment of a Risk Score is used by us for guidance and information purposes and does not constitute a warranty as the Borrower’s ability to repay. We do not provide Lenders with financial advice.

29.3 We will periodically review the Risk Score we assign to a Loan in accordance with our risk management framework. Lenders can find out more information by contacting us hello@getchip.uk but should be aware that this does not mean that Chip will undertake a review in all cases, or that Chip actively monitor a Borrower or the Risk Score assigned to them.

29.4 We conduct checks on a Borrower which we consider to be reasonable in the circumstance prior to assigning a Risk Score. However, there is no guarantee that the databases we access are complete, accurate and up to date. We will not be responsible for any loss that arises because of a failure in the reports we commission to disclose all information that may be relevant to a Risk Score.

30. Building a portfolio

30.1 Chip will create a Portfolio for you on a discretionary basis in accordance with the Product Criteria. We will ensure that only those Loan Parts which we have determined (acting reasonably) will help achieve the advertised target rate are included in your Portfolio. However, we are under no obligation to remove Loan Parts from your Portfolio, even if there has been a change to our Risk Score.

30.2 You can find more information about how we choose which Loan Parts to include in your Portfolio.

31. The Borrower’s credit facility and drawdown

31.1 Subject to eligibility and the execution of the Loan Agreement by the Borrower, we will offer Borrowers a credit facility on behalf of the Lenders. This means that a Borrower has been given an amount of credit that they can ask for when they need it. This might be at a different time to when they sign their Loan Agreement.

31.2 Upon request by a Borrower to draw down their Loan or any part of it, Chip will automatically determine which Lenders are matched with the Borrower and in relation to which Loan Parts.

31.3 Loans may be fulfilled by one Lender or by a number of Lenders in Loan Parts, and the Loan Agreement shall apply to, and represents, each and every Loan Part, each of which is a separate agreement between each individual Lender and the Borrower.

31.4 In relation to each Loan:

31.4.1 the Borrower is separately liable to each Lender for the amount of that Lender’s Loan Part, together with interest thereon; and

31.4.2 any final or periodic repayment consists of the aggregate of the capital and interest for each Loan Part due to each Lender on that repayment date.

31.5 In all Loan Agreements and loan transfer documentation we will quote a Lender’s address as being “c/o Chip” and state our postal address. Each Borrower agrees that all notices and communications to be given to a Lender will be sent to us on that Lender’s behalf and that this is sufficient to identify the Lenders for the purposes of the Loan Agreements.

32. Loan administration if things go wrong

32.1 We do have contingency arrangements in place if Chip ceases to trade or becomes insolvent, which include arrangements for the administration of Loans and the maintenance of user information within the Service.

32.2 We have appointed Resolution Compliance Limited of One Croydon, 12-16 Addiscombe Road, Croydon CR0 0XT to act as the Back-up Administrator. We may from time to time appoint any other competent (and if appropriate, regulated) firm in addition to, or in substitution for, the Back-up Administrator.

32.3 It is necessary for the performance of our services and in order to comply with our regulatory obligations that we are able to transfer personal data in relation to Lenders and Borrowers to the back-up platform administrator in a contingency scenario. Further details about this are set out in our Data & Privacy Notice.

32.4 You can find further details of our contingency arrangements by contacting us.

33. Missed payments and enforcing a loan

33.1 In the event of missed payments on a Loan, we will take the administrative steps set out in the Loan Agreement on the Lenders behalf, although we will determine in our discretion how best to pursue the debt in the circumstances so that we may act outside and/or ahead of those processes to pursue missed payments on Loans (whether or not in formal default) where we consider this to be in the best interests of Lenders across all Loans with the Borrower.

33.2 We have collection and arrears procedures to treat Borrowers and Lenders fairly at all times. Where possible, we may consider accepting reduced payments or extending payment terms where we, in our discretion, believe that non-enforcement of strict contractual terms against Borrowers is commercially appropriate in the circumstances. Under no circumstance will we agree to amend the principal amount of the Loan or the interest rate payable by the Borrower to the Lenders.

33.3 If a Borrower misses a payment or only partially pays the amount due to Lenders, we will contact the Borrower to inform it that it is in arrears, and we will reattempt to collect the outstanding payment in respect of all Loans it has entered into. If our attempts to collect the payment fail on a second occasion without explanation within 7 working days, the Borrower's account will be treated as being overdue although we will continue to attempt to collect the funds. After 14 days, if the outstanding amounts have still not been repaid, then a second notice of account in arrears will be sent to the Borrower. If the Borrower is more than 90 days in arrears, then the Loans may be placed into default and passed to our collections team.

33.4 If a Borrower only makes a partial payment of the monthly payment due, we will hold that amount pending resolution of the default or enforcement action and will then allocate this held sum across all relevant Loan Parts in accordance with the following order of priority:

33.4.1 first, for the benefit of Lenders in paying any capital due under the Loan Agreements;

33.4.2 second, for the benefit of the Lenders in paying any interest due under the Loan Agreements;

33.4.3 third, for the benefit of Chip in respect of any Borrower fees.

33.5 We may instruct third parties, such as solicitors, in order to pursue the debt. We may refer the missed payment(s) to a debt collections agency to attempt to collect the money the Lenders' behalf.

33.6 If we incur costs or fees in recovering outstanding sums and such costs cannot be collected directly from the Borrower, we are entitled to deduct these costs from any payments received from the Borrower prior to distributing funds to Lenders.

33.7 We will decide, at our sole discretion, what action to take in relation to recovering the outstanding Loan. Lenders acknowledge that they may not receive all of the capital and interest due to them.

33.8 Any action we take will involve us fairly exercising our powers and duties as we deem appropriate including engaging legal advisors, accountants or other such experts to advise us or act on our behalf.

33.9 Lenders acknowledge that we will attempt recovery on Lender’s behalf. The Lender will not have any authority to take direct action against a Borrower. The Lender irrevocably agrees to rely on the action taken by us on behalf of all Lenders holding Loan Parts.

34. Delegation

34.1 Any of our functions under these Terms of Use may be delegated to an associate or competent (and if relevant, appropriately regulated) third party of our choosing to perform such functions. We will use reasonable skill and care in our selection, monitoring and use of agents.

35. Competing interests and conflicts

35.1 There may be circumstances where the more than one group of Lenders have advanced monies to a Borrower. By way of example, a Borrower may during the term of the Loan Agreement make multiple draw downs (up to their credit limit). In these circumstances:

35.1.1 interest will be distributed to Lenders in proportion to their entitlements;

35.1.2 repayments of capital will be paid first to those Lenders with the oldest Loan Parts in proportion to their entitlements, then to those Lenders with the next oldest Loan Parts and so on; and

35.1.3 if the Borrower defaults, the proceeds of recovery will be paid in accordance with paragraph 34.4 to all Lenders holding Loan Parts with that Borrower in proportion to their entitlements.

35.2 There may be circumstances where a Borrower refinances an existing Loan upon the expiry of the term of the Loan Agreement by entering into a new Loan Agreement. In these circumstances one group of Lenders may be providing a Loan to enable the Borrower to repay another group of Lenders.

36. Accessing funds in your P2P account

36.1 Subject to any Product Criteria, you may ask us to transfer any uninvested or realised funds to your Nominated Account at any time. Funds which are allocated to a Loan but not yet invested will be treated as (and may become) invested funds unless a replacement Lender is identified by Chip.    

36.2 Subject to any Product Criteria, you may ask to realise invested funds from your P2P account. If the Product Criteria has a minimum notice period, that notice period will apply. We will, on your behalf, attempt to sell those Loan Parts we believe will meet your withdrawal request. You are not responsible for choosing which Loan Parts you wish to sell. There is no guarantee that we will be able to do so, and Lenders must be prepared to hold Loan Parts for the term of the Loan.

36.3 When a Loan Part is transferred:

36.3.1 we will ensure that the price paid is fair and appropriate in the circumstances;

36.3.2 the transferring Lender (Seller) assigns (or, as we determine necessary, novates) to the recipient Lender (Purchaser) all rights (and obligations) under the Loan Agreement in respect of the Loan Part, including any right to interest from the date of transfer;

36.3.3 the Seller will have no further rights and obligations under the Loan Agreement in relation to the Loan Part transferred, but the Loan Part sale will not affect any rights or obligations that have accrued to the Seller up to the date of sale in relation to the Loan Part sold, or any rights that the Seller may have under any unsold Loan Parts that the Seller retains in the applicable Loan Agreement;

36.3.4 the Buyer will become a party to the Loan Agreement of which that Loan Part forms part and will assume all of the rights and responsibilities of the Seller under the Loan Agreement as far as they relate to the Loan Part sold; and

37.3.5 each of the Seller, Buyer and, where relevant, the Company agree that Chip may complete and execute or authenticate any assignment or novation that Chip may consider necessary or prudent in relation to the transfer of title of to on sale.

37. Closing your P2P account

37.1 Subject to the provisions of this paragraph 38 and any Product Criteria, you may notify us that you wish to close your P2P account at any time. If the Product Criteria has a minimum notice period, that notice period will apply. If you cancel your Chip X subscription or close your Chip account, we will also close your P2P account.

37.2 We cannot close a P2P account (or your Chip account) if you have any current Loan Parts in your Portfolio. Notice of your intention to cancel or terminate will not entitle you to withdraw from the Loan Parts to which you are committed.

37.3 We will attempt to wind up your Portfolio by selling Loan Parts (or a fractional share which, when sold, shall constitute a new Loan Part) to other Lenders in accordance with paragraph 37. There is no guarantee that we will be able to do so.

37.4 Any unutilised Funds and any proceeds from the winding-up of your Portfolio will be transferred to your Nominated Account.

38. Reporting

38.1 You will be able to log in to your account and view details of your Portfolio. Your account will show information including the number of loans made, amounts outstanding, interest payable and repayment dates.

38.2 We will provide you with a statement annually and on account closing (unless you exercise your right to cancel) relating to the performance of your Portfolio.

38.3 You may have to pay other taxes or costs which are not imposed by us, including on any gains on your investment or income arising from them. You should seek your own independent advice, where necessary.

39. Fees

39.1 We do not directly charge Lenders fees for activating P2P lending or for making, transferring or withdrawing funds from your P2P account.

39.2 However, Lenders should be aware that the effective rate of interest paid by the Borrower is greater than the rate the Borrower pays to the Lenders as it includes fees paid to Chip. Further details of all the fees in connection with P2P lending will be made available.

39.3 Your Chip X subscription is not a charge for P2P lending, but you should factor this is when assessing the overall costs of P2P lending.

LAST UPDATED: 01 May 2019

Glossary

  • Account Information Services what we do when we securely access and consolidate the information from your bank account(s)
  • Algorithm the super clever bits that power the Service
  • App any Chip application including our mobile application
  • Back-Up Administrator the person we appoint to manage the P2P loans in the event Chip ceases to trade
  • Borrower a Chip X user who has activated our overdraft alternative, whether or not they have borrowed any of the agreed amount of credit
  • Buyer in relation to P2P lending, a Lender who acquires a Loan Part from another Lender
  • Chip X our premium subscription product with access to more great features
  • E-money electronic money, which is a store of value used for making payments and which you get when you transfer money to the Wallet Provider
  • Chip Chip Financial Limited
  • Lender a Chip X user who has activated our P2P lending facility
  • Loan the amount of credit offered to a Borrower and the sums borrowed under that credit facility
  • Loan Agreement the agreement between Chip, as agent for the Lenders, and the Borrower
  • Loan Parts the amount an individual Lender has lent to a Borrower which, together with lots of other Loan Parts, makes up a Loan
  • Nominated Account the bank account that you have linked to the Service
  • P2P lending peer-to-peer lending, which is an investment activity and not savings
  • Portfolio a portfolio of Loan Parts chosen by the Service on a discretionary basis with a view to providing a Lender with a rate of return
  • Product Criteria the criteria and details relevant to a P2P lending product
  • Repayment Goal a segregated part of your Wallet to which Saves are applied to help you schedule repayment of any Smart Credit
  • Risk Score a way for us to assess the credit risk of a Borrower
  • Safeguarding a process that the Wallet Provider is obliged to comply with by law to keep money safe so that it can redeem e-money when asked to
  • Seller in relation to P2P lending, a Lender who sells a Loan Part to another Lender
  • Service our App and the Algorithm, working to help you achieve great things with your finances
  • Smart Credit our running-account credit product for Users
  • Wallet a digital wallet provided to you by the Wallet Provider which holds your e-money
  • Wallet Provider an authorised electronic money institution that issues e-money to you and maintains your Wallet