10.—(1) This section shall apply to credit agreements other than housing loans.

(2) For the purpose of calculating the APR the total cost of credit to the consumer shall be determined, with the exception of the following charges:

(a) charges payable by the consumer for non-compliance with any of his commitments laid down in the credit agreement,

(b) charges other than the purchase price which, in purchases of goods or services, the consumer is obliged to pay whether the transaction is paid in cash or by credit,

(c) charges for the transfer of funds and charges for keeping an account intended to receive payments towards the reimbursement of the credit, the payment of interest and other charges except where the consumer does not have reasonable freedom of choice in the matter and where such charges are abnormally high; this paragraph shall not, however, apply to charges for collection of such reimbursements or payments, whether made in cash or otherwise,

(d) membership subscriptions to associations or groups and arising from agreements separate from the credit agreement, even though such subscriptions have an effect on the credit terms,

(e) charges for insurance or guarantees other than those designed to ensure payment to the creditor, in the event of the death, invalidity, illness or unemployment of the consumer, of a sum equal to or less than the total amount of the credit together with relevant interest, and other charges imposed by the creditor as a condition for credit being granted.

(3) (a) The APR shall be calculated—

(i) in the case of a credit agreement, at the time the agreement is concluded, or

(ii) in the case of an advertisement which relates to the offering of credit and mentions the APR, at the time the advertisement is published, and

(b) the calculation shall be made on the assumption that the credit agreement is valid for the period agreed and that the creditor and the consumer fulfil their obligations under the terms and by the dates agreed.

(4) In the case of credit agreements containing terms allowing variations in the rate of interest and the amount or level of other charges contained in the APR but unquantifiable at the time when it is calculated, the APR shall be calculated on the assumption that interest and other charges remain fixed and will apply until the end of the credit agreement. The variability shall be indicated with equal prominence to and along with the APR.

(5) In the case of credit agreements containing terms allowing variations in the rate of interest and the amount or level of other charges contained in the APR but quantifiable at the time when it is calculated, the APR shall be calculated to take account of the rates applicable from the specific dates set out in the agreement.

(6) Where necessary, the following assumptions may be made in calculating the APR:

(a) if there is no fixed timetable for repayment, and one cannot be deduced from the terms of the credit agreement and the means for repaying the credit granted, the duration of the credit shall be deemed to be one year,

(b) unless otherwise specified, where the credit agreement provides for more than one repayment date, the credit will be made available and the repayments made at the earliest time provided for in the agreement,

(c) where the amount of credit to be provided is not specified—

(i) in the case of running account credit, where a credit limit is specified, it shall be assumed that the maximum amount of credit is provided for the duration of the agreement, and

(ii) in any other case, it shall be assumed that the amount provided shall be £1,000,

(d) where charges are payable at an unspecified date after the agreement is signed it shall be assumed that they are payable at the beginning of the agreement.

(7) A creditor shall comply with the requirements of this section in relation to the calculation of the APR in respect of a credit agreement.