Consumer Credit

Question 1

Part V of the Consumer Credit Act 1974

Answer 1

Entry into credit or hire agreements

Question 2

s. 55

Answer 2

Obligation to provide pre-contract documentation to customers

Question 3

s.61

Answer 3

obligation to enter into regulated consumer credit agreements and regulated consumer hire agreements in a prescribed manner, including documenting the agreement in accordance with the relevant applicable secondary legislation

Question 4

s.61A - 63

Answer 4

obligation to provide copies of agreements to customers

Question 5

s.61(2)

Answer 5

obligation to give a cooling-off period in respect of secured agreements (less important since MCD transferred most of these agreements from CCA to FSMA)

Question 6

s.127

Answer 6

Enforcement orders

Question 7

s. 75

Answer 7

Creditor’s liability under debtor-creditor-supplier agreements (within section 12(b) and (c) )

Question 8

ss.87 and 88

Answer 8

If during the course of a regulated agreement, by reason of a debtor’s breach the creditor wishes to terminate the agreement, demand earlier repayment of any sum, recover possession of goods or land, treat any right conferred on the debtor as terminated, restricted or deferred, or to enforce any security, a default notice must be served on the debtor.

Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983/1561

Question 9

s.9(1)

Answer 9

“Credit” is defined in s.9(1) of the CCA as “a cash loan, and any other form of financial accommodation”

Question 10

s.15

Answer 10

A “consumer hire agreement” is defined in s.15 of the CCA as an agreement between a person and an individual (the “hirer”) for the bailment of goods to the hirer which is capable of subsisting for more than three months (and is not a hire-purchase agreement)

Question 11

s.10

Answer 11

Running account credit, eg credit cards and bank overdrafts.

Fixed-sum credit” is defined as “any other facility under a consumer credit agreement whereby the debtor is enabled to receive credit (whether in one amount or by instalments)”.

Question 12

s.11

Answer 12

Restricted-use and unrestricted-use credit

Question 13

s.189

Answer 13

Definitions

Question 14

s.13

Answer 14

Debtor-creditor agreements: Section 13 of the CCA sets out the three types of DC agreements:
A restricted-use credit agreement to finance a transaction between the debtor and another person (the supplier) but is not made under pre-existing arrangements or in contemplation of future arrangements between the creditor and the supplier (s.13(a) of the CCA) (e.g. a loan to finance the purchase of goods where the creditor pays the loan directly to the supplier, on the debtor’s request).
A restricted-use agreement to refinance any existing indebtedness (s.13(b) of the CCA), whether to the creditor or another person.
An unrestricted-use credit agreement which is not made under pre-existing arrangements between the creditor and another person (the supplier), in the knowledge that the credit is to be used to finance a transaction between the debtor and the supplier (s.13(c) of the CCA) (e.g. a bank overdraft or a personal loan where the debtor can spend it how he wishes).

Question 15

s.12

Answer 15

There are three types of DCS agreements (contained in s.12 of the CCA):
A restricted-use credit agreement to finance a transaction between the debtor and the creditor, where the creditor is also the supplier (s.12(a) of the CCA) (e.g. where a supplier gives the customer time to pay).
A restricted-use credit agreement to finance a transaction between the debtor and another person (the supplier) and is made under pre-existing arrangements or in contemplation of future arrangements, between the creditor and the supplier (s.12(b) of the CCA).
An unrestricted-use credit agreement made under pre-existing arrangements between the creditor and another person (the supplier), in the knowledge that the credit is to be used to finance a transaction between the debtor and a supplier (s.12(c) of the CCA) (e.g. where a car dealer introduces the customer to a finance house, which knows that the customer will use the loan to purchase a car from the dealer, even though the customer could in theory use the loan for a different purpose).

Question 16

s.14

Answer 16

Credit-token agreements: Section 14 of the CCA deals with credit token agreements, which are defined as regulated agreements for the provision of credit in connection with the use of a credit token (s.14(2) of the CCA). A credit token is defined as a card, check, voucher, coupon, stamp, form, booklet or other document which, when presented to the creditor or another person who is to be paid by the creditor, cash, goods and/or services on credit are supplied to the debtor by the creditor or that other person (s.14(1) of the CCA).

Question 17

s.19

Answer 17

Linked transactions: “Linked transactions” are defined by s.19 of the CCA, which extends the application of the CCA beyond the regulated agreement itself and can affect the rights and obligations under agreements with third parties.

Question 18

s.67

Answer 18

Cancellable agreements: A “cancellable agreement” is defined by s.189 of the CCAas an agreement that may be cancelled by the debtor or hirer by virtue of s.67 of the CCA.
For an agreement to be cancellable, entry into it must have been preceded by antecedent negotiations which included oral representations (defined e.g. in Moorgate Services Ltd v Kabir (t/a Shapla) [1995] C.C.L.R. 74). The question of whether antecedent negotiations took place is determined by s.56 of the CCA.

Question 19

s.56

Answer 19

Antecedent negotiations

Question 20

s.133

Answer 20

Return orders

Question 21

s.135

Answer 21

Suspended return orders

Question 22

s.129

Answer 22

Time orders.
Southern and District Finance v Barnes - time order may be made where just to make it.

Nb s129A: debtor should give at least 14 days notice of intention to apply for time order

Question 23

s.65

Answer 23

Improperly executed agreement enforceable only on order of court

Question 24

s.78

Answer 24

The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of [£1] 1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—
(a) the state of the account…

Carey and others v HSBC [2009] EWHC QB - s.78 duty can be satisfied by providing reconstituted agreement, which may be from other sources than the signed agreement itself

Question 25

s.127(3) - (5)

Answer 25

Irredeemably unenforceable agreements (missing prescribed terms) - applies only to agreements made before 6 April 2007

Question 26

ss.140A and B

Answer 26

Unfair relationship - applies from 6 April 2008

Question 27

Consumer Credit (Agreements) Regulations 1983

Answer 27

ss2 and 3 - prescribed details include instalments, duration, total charge for credit

Question 28

s.99

Answer 28

In order to terminate a hire-purchase agreement, notice of termination must be given

Question 29

Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983

Answer 29

Specifies form of DNs and TNs

Question 30

s92

Answer 30

Court order required for entry onto premises to take possession of goods