Consumer Credit Law

Regulated Agreements — Credit provided to individuals (credit cards, loans, hire purchase, overdrafts) is generally regulated under the Consumer Credit Act 1974, with lenders authorised and supervised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 framework.

Section 75 Connected-Lender Liability — Where a debtor under a debtor-creditor-supplier agreement (classically a credit card purchase) has a claim against the supplier for misrepresentation or breach of contract, they have a 'like claim' against the creditor, who is jointly and severally liable with the supplier (CCA 1974, s.75(1)).

Section 75 Financial Limits — Section 75 applies where the item has a cash price of more than £100 and not more than £30,000. Paying even part of the price (e.g. a deposit) on the card can engage the protection for a qualifying item.

Default Notices — Before a creditor can terminate a regulated agreement, demand earlier payment, recover possession of goods or land, or enforce security because of the debtor's breach, it must serve a default notice complying with section 88 (CCA 1974, s.87(1)).

14 Days to Remedy — The date specified in a default notice for remedying the breach must be at least 14 days after service, and the creditor cannot take enforcement action before that date (CCA 1974, s.88(2)).

Unfair Relationships — Under s.140A the court may make a s.140B order (repayment, variation, setting aside security) if the relationship arising out of the credit agreement is unfair to the debtor because of the agreement's terms, the way the creditor has exercised or enforced its rights, or any other thing done or not done by the creditor (Plevin v Paragon Personal Finance [2014] UKSC 61 — undisclosed PPI commission).

Ombudsman Redress — Consumers complain to the firm first; if unhappy with the firm's final response, they can refer the complaint to the Financial Ombudsman Service free of charge, generally within 6 months of the final response.