Part 4Consumer rights and disputes
Chapter 3Consumer Savings Schemes
287Trust arrangements
1
Where a trader relies on arrangements under this section for the purpose of satisfying section 285, the trader must ensure that all payments made by a consumer under a consumer savings scheme contract are held on trust for the consumer, in the United Kingdom, by one or more persons appointed as trustees for the consumer.
2
Subject to subsection (3), the monies are to be held on trust for the consumer as required by subsection (1) until—
a
the funds in the consumer’s account have been redeemed, or
b
any payments made by the consumer in respect of the consumer savings scheme contract have been returned to the consumer.
3
The trustees may authorise the use of monies held on trust for the consumer as required by subsection (1)—
a
to pay suppliers for goods, services or digital content to be provided to the consumer in accordance with the terms of the consumer savings scheme contract,
b
to return payments to the consumer in exceptional circumstances, or
c
to pay any profits after the consumer has redeemed all of the funds in their account.
4
For the purposes of subsection (3)(a), trustees may only authorise the release of monies on receipt of a declaration by the trader that the trader is solvent.
5
The trustee, or where there is more than one trustee, the majority of persons appointed as trustees for the purpose of subsection (1), must be independent of the trader.
6
For the purpose of subsection (5), a person is independent of the trader in relation to a trust only if—
a
the person has no interest in the assets of the trader or of the trust otherwise than as a trustee of that trust, and
b
the person is neither connected with, nor an associate of—
i
the trader, or
ii
any person for the time being acting as an insolvency practitioner in relation to the trader.
7
The cost of administering the trust must be paid for by the trader.
8
The trader must arrange for an independent auditor to be appointed to audit the accounts of the trust every three years.
9
In the event of a trader’s insolvency, monies held on trust for a consumer by the trustees in accordance with this section must be returned to the consumer.