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Integro Funding Limited t/a ‘Level’
Fair Value Statement

Revision History:

1. 14/03/2023 - Initial fair value assessment

2. 23/02/2024 - Pricing review and general updates

This summary document is being provided to you to fulfil our responsibilities under PRIN 2A.4.15R and PRIN 2A.3.12 R (2) in relation to the loan products that we provide.

 

It is designed to support compliance with responsibilities under PRIN 2A.3.16R and PRIN 2A.4.16 R

 

1. Summary

 

In considering the fair value of our products, we have concluded that:

  • Our loan products continue to meet the needs, characteristics, and objectives of customers in the identified target market(s)

  • The products provide fair value to customers in the target markets (i.e. the total benefits are proportionate to total costs).

 

2. What are Level’s products?

 

Type of products:

 

Level offers several products, as summarised below:

  • Legal fee loan – restricted use, paid to solicitor firm directly, after borrower approval

  • Living expense loan – unrestricted use, paid to client directly

  • Settlement Advance – unrestricted use, paid to client directly

  • Estate expense & IHT funding - –restricted use (paid directly to solicitor administering the estate/HMRC)

  • Inheritance release – unrestricted use, paid to client directly

 

Level provides unsecured or secured loans depending on each customer’s circumstances and needs, as further detailed below:

 

Unsecured:

  • This is suitable for most of Level’s customers, who are rarely able to offer traditional security against a property due to the nature of the proceedings they are involved in (mostly divorce).

  • Under these loans, Level does not have security by way of a legal charge over property. Instead, the customer assigns their future financial settlement (or inheritance for inheritance advance) to Level, from which the loan is repaid.

  • For Estate expense & IHT funding, the loan is repaid from the estate assets prior to any beneficiaries receiving their inheritance.

  • In a small proportion of cases, Level will ask that an unsecured loan is backed up by a nominated guarantor, who will sign a guarantee and indemnity agreement confirming that they will repay the customer’s loan(s) if the customer is unable to do so. Note: borrowers under guarantor loans must still meet Level’s affordability criteria, and all risks and obligations under the loan are clearly explained to any prospective guarantor.

 

Secured:

  • Where the customer can provide formal security by way of a legal charge over a property or properties that they own, they may elect to apply for a secured bridging loan, which will have a maximum term of 12 months. Level’s loan is repaid upon completion of the sale of the property or properties or, if the client is able to repay by other means, Level will release their legal charge(s) upon receipt of full repayment.

 

Restricted use:

  • For family proceedings, used to cover the cost of legal advice and representation including court fees, disbursements and all reasonable fees, costs, expenses and associated VAT invoiced by the borrower’s solicitor in relation to your Proceedings.

  • For Estate expense & IHT funding, used to pay IHT, funeral costs and other estate liabilities such as property repairs and maintenance, property clearance costs, professional fees such as probate, valuers and survey etc.

  • Funds are paid directly to the solicitor/professional administrator firm’s bank account

 

Unrestricted use:

  • To cover living costs throughout the course of proceedings, or other costs such as rehousing, property renovations or a lump sum settlement to the counter party while they await their settlement or generate liquidity to repay Level’s loan(s) by other means.

  • Or to advance a proportion of a beneficiary’s inheritance early to clearing tax liabilities or other debts, put down a deposit on a new property, finance home improvements, purchase a new vehicle, education, medical, veterinary costs, holidays etc.

  • Funds are paid directly to the borrower.

 

Product Characteristics:

 

Level’s products have certain shared characteristics, as below:

  • All borrowers must have a solicitor/professional administrator instructed, and the firm will act as the credit intermediary for the loan, meaning that the borrower’s settlement proceeds or inheritance will be paid into their solicitor’s client account so that the solicitor can repay Level. In order to do this, the borrower temporarily assigns their proceeds to Level by way of a Deed of Assignment. This assignment is released at the point of full repayments of Level’s loan(s).

  • For each loan, the actual lending contract is with the client and therefore they are the direct customer. However, the firm representing the client also has contractual obligations to fulfil; including the provision of information and an undertaking ensure repayment of the loan out of the client’s settlement/inheritance.

 

3. Target market assessment

 

Who are these products designed for and what needs are met by these products?

 

After the cutback of ‘legal aid’, Level aims to provide short-term liquidity (via a loan) for individuals engaged in litigation, expecting to receive a financial settlement who cannot easily fund legal fees (and sometimes living expenses) prior to receipt of their financial settlement.

 

Each product is designed to meet the needs of the target group of consumers engaged in litigation or awaiting settlement from prior litigation, who require access to short-term liquidity (via a loan) to cover legal costs and/or their living costs.

 

Our borrowers are typically, expecting to receive a financial settlement but lack the funds to pay their legal fees and meet their living costs prior to receipt of their settlement.

 

The specific customer needs vary between each product - the typical needs of the customer for each loan type are set out below:

The features and criteria of each product are designed to support these needs enabling the borrower to obtain the best legal advice available to them (where applicable) to achieve the best possible outcome in their legal proceedings and/or meet their living costs (e.g. mortgage payments, rent, utility bills etc) until they receive their financial settlement, or enabling executors to unlock a proportion of the estate to pay testamentary expenses so that the estate can be administered and beneficiaries can receive their inheritance.

4. Vulnerable Customers

The target market for these products is likely to include some customers with characteristics of vulnerability or who will experience vulnerability over time.

We have reviewed our products to assess whether they meet the identified needs, characteristics, and objectives of the target market, including customers in the target market who have characteristics of vulnerability.

 

We follow a continuous product management policy where we consider customer vulnerability throughout the lifecycle of the Product.

 

Characteristics of Vulnerability:

 

The following list, which is non-exhaustive, sets out the types of factors relevant to the target market that can mean that a customer should be categorised as vulnerable:

  • Low literacy, numeracy and financial capability skills

  • Physical disability and/or illness

  • Severe or long-term illness

  • Mental health problems

  • Previous history of suicide

  • Low income and/or debt

  • Caring responsibilities (including operating a power of attorney)

  • Being ‘older old’ for example over 80, although this is not absolute (may be associated with cognitive or dexterity impairment, sensory impairments such as hearing or sight, onset of ill-health, not being comfortable with new technology)

  • Being young (associated with less experience)

  • Change in circumstances (e.g. job loss, bereavement, divorce)

  • Lack of English language skills

  • Non-standard requirements or credit history (e.g. armed forces personnel returning from abroad, ex-offenders; care-home leavers, recent immigrants)

  • Domestic violence

  • Being subject to coercive behaviour by their spouse

 

These vulnerable characteristics may mean that the customer will require additional advice and support to ensure they understand the information being presented to them and the implications of the product they are entering into to reduce the risk of harm occurring.

 

Furthermore, they may require additional support to understand how to use the product, their rights and how to get help if something goes wrong.

Customers may need specialist support to address any support needs.

We have in place a framework and strategies that are designed to achieve good outcomes for vulnerable customers, which includes:

  • Solicitor must provide details of any perceived vulnerability of the customer when completing the application form on behalf of the prospective borrower.

  • Education and training for employees to ensure they have the appropriate skills and experience to recognise and respond to the needs of vulnerable customers.

  • Suitability assessment to check customers are eligible for financing.

  • Suitable customer service provision and communications.

  • Flexible policies in our products, where appropriate, to support vulnerable customers including customers experiencing financial difficulties.

  • Monitoring to ensure we continue to meet and respond to the needs of customers with characteristics of vulnerability.

  • Offer of a chaperone (a trusted friend or family member) to be copied into all correspondence with Level

  • Requirement for a third party to be present at the independent legal advice meeting e.g. a translator in instances where English is not the borrower’s first language

 

 

5. Value Assessment

We have developed a comprehensive and robust assessment process which evaluates several aspects of our business to determine the value of our products. This analysis is used to ascertain whether the Product delivers fair value for customers.

Our fair value assessment has considered the following:

6. Conclusion

Our assessment concluded that all of Level’s products continue to deliver fair value for customers in their target market(s).

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