SUMMARY
CONSUMER CREDIT
• Consumer credit is regulated for the most part by the Consumer Credit Act
(CCA) 1974. This applies to ‘regulated agreements’ (for example, consumer
credit and consumer hire agreements) and primarily controls the provision of
credit to individuals as opposed to companies.
• In order for the provisions of the CCA 1974 to apply, the credit extended must
not exceed £25,000. Small agreements are exempted from some of the provisions
of the CCA 1974. Exempt agreements are not regulated by the provisions of the
CCA 1974 (subject to a few exceptions).
Licensing
• Businesses providing finance for regulated agreements must be licensed by the
Office of Fair Trading.
• Issue of a licence is subject to the applicant being a fit person to hold a licence.
Licences can be refused, revoked or varied and may limit the credit facilities
that the licence holder can offer. Unlicensed trading is a criminal offence.
Promotion of credit agreements
• The CCA 1974 creates criminal offences, such as soliciting a minor to take
credit. There are specific criminal offences in relation to non-compliance with
provisions in relation to the form and content of advertisements of credit.
Pre-contract protection of the consumer
• The Act enables a person who is refused credit to see any information held by a
credit reference agency and to amend it if necessary.
• The Consumer Credit (Agreements) Regulations 1983 (as amended) specify the
form and content of credit agreements and copies thereof; non-compliance
renders the agreement unenforceable without a court order.
Protection of the debtor after the contract is made
• Extortionate credit bargains can be re-opened by the courts.
• The debtor is entitled to statements of the current state of the credit agreement.
• Credit agreements signed off trade premises after oral representations are made
can be cancelled within five days of receipt of the second statutory copy of the
agreement, by written notice to the creditor/credit broker.
• The debtor can terminate hire purchase, conditional sale and consumer hire
agreements by written notice to the creditor/credit broker.
The creditor’s right to terminate the agreement
• The contract usually allows the creditor to terminate for the debtor’s default in
payment. The creditor must serve a default notice on the debtor before
termination, allowing the debtor seven days to pay arrears.
• The debtor can apply to the courts for a time order, allowing him or her more
time to pay.
SUMMARYCONSUMER CREDIT• Consumer credit is regulated for the most part by the Consumer Credit Act(CCA) 1974. This applies to ‘regulated agreements’ (for example, consumercredit and consumer hire agreements) and primarily controls the provision ofcredit to individuals as opposed to companies.• In order for the provisions of the CCA 1974 to apply, the credit extended mustnot exceed £25,000. Small agreements are exempted from some of the provisionsof the CCA 1974. Exempt agreements are not regulated by the provisions of theCCA 1974 (subject to a few exceptions).Licensing• Businesses providing finance for regulated agreements must be licensed by theOffice of Fair Trading.• Issue of a licence is subject to the applicant being a fit person to hold a licence.Licences can be refused, revoked or varied and may limit the credit facilitiesthat the licence holder can offer. Unlicensed trading is a criminal offence.Promotion of credit agreements• The CCA 1974 creates criminal offences, such as soliciting a minor to takecredit. There are specific criminal offences in relation to non-compliance withprovisions in relation to the form and content of advertisements of credit.Pre-contract protection of the consumer• The Act enables a person who is refused credit to see any information held by acredit reference agency and to amend it if necessary.• The Consumer Credit (Agreements) Regulations 1983 (as amended) specify theform and content of credit agreements and copies thereof; non-compliancerenders the agreement unenforceable without a court order.Protection of the debtor after the contract is made• Extortionate credit bargains can be re-opened by the courts.• The debtor is entitled to statements of the current state of the credit agreement.• Credit agreements signed off trade premises after oral representations are madecan be cancelled within five days of receipt of the second statutory copy of theagreement, by written notice to the creditor/credit broker.• The debtor can terminate hire purchase, conditional sale and consumer hireagreements by written notice to the creditor/credit broker.The creditor’s right to terminate the agreement• The contract usually allows the creditor to terminate for the debtor’s default inpayment. The creditor must serve a default notice on the debtor beforetermination, allowing the debtor seven days to pay arrears.• The debtor can apply to the courts for a time order, allowing him or her moretime to pay.
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