Consumer Credit Act 2006 A Guide to the New Law

Author: Julia Smith; Sandra McCalla
Publisher: Law Society Publishing
ISBN: 9781853285431
Published In: August 2006
Format: Paperback , 276 pages
Jurisdiction: U.K. ? Disclaimer:
Countri(es) stated herein are used as reference only

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The Consumer Credit Act 2006 marks the final stage of the most significant reform of domestic consumer credit law in almost 30 years. The Act amends the Consumer Credit Act 1974 with the principal aim of improving the regulation of consumer credit and consumer hire businesses, whilst at the same time providing better protection and remedies for the consumer.

Legal professionals in the field will find this to be an indispensable guide to the provisions. It offers a clear explanation of how the law will affect businesses and includes both a copy of the 2006 Act and the Consumer Credit Act 1974 as amended.

The Act aims to protect vulnerable consumers and to create a fairer and more competitive credit market by:

creating powers for courts to redress the balance in 'unfair relationships' between debtors and creditors, making it easier for people to obtain some assistance from the court when they suffer the consequences of unfair lending practices
extending the powers of the financial ombudsman to investigate complaints brought by consumers in relation to consumer credit and consumer hire and to make rulings capable of enforcement by the courts
compelling creditors to keep debtors informed about the state of their accounts, particularly in relation to arrears
restricting the charges that may be made in the event of default
giving the OFT greater powers to regulate the industry, including powers to impose sanctions other than the removal of licences.

The measures have implications for all businesses that enter into credit, hire or hire purchase agreements, whatever the size of the loan or the cost of the hire or hire purchase. The removal of the financial limit of £25,000 for regulated agreements will mean that more businesses will be affected by all the provisions of the 1974 Act. For all credit, hire and hire purchase businesses with customers who are individuals or partnerships consisting of two or three persons, there will be rules to follow. The provisions relating to unfair relationships are not limited to regulated agreements but will apply in respect of most loans to individuals or small partnerships.

1. Regulated agreements;
2. Statements;
3. Protection for customers in default;
4. Enforcement of agreements;
5. Unfair relationships;
6. Licensing;
7. The duties and powers of the Office of Fair Trading;
8. The Consumer Credit Appeals Tribunal;
9. The Financial Services Ombudsman Scheme;
10. Miscellaneous; Appendices.

Julia Smith and Sandra McCalla are both barristers specialising in consumer credit at Gough Square Chambers in London advising banks and other finance companies, regulators and consumers in connection with the provision of credit and goods on hire or hire purchase.