(1) A creditor and, where applicable a mortgage credit intermediary, shall provide adequate explanations to the consumer on the proposed credit agreement and any ancillary services, in order to place the consumer in a position enabling him or her to assess whether the proposed credit agreement and ancillary services are adapted to his or her needs and financial situation; this and the next following paragraph are subject to paragraph (3).

(2) The explanations shall, where applicable, include:

(a) the pre-contractual information to be provided in accordance with:

(i) in the case of creditors, the information specified in Regulation 15;

(ii) in the case of mortgage credit intermediaries, the information specified in Regulations 15 and 16;

and

(b) in all cases -

(i) the essential characteristics of the products proposed;

(ii) the specific effects the products proposed may have on the consumer, including the consequences of default in payment by the consumer; and