Consumer Credit Flashcards
Consumer credit is
Credit advanced to consumers for purchase of goods or services
Credit includes cash loan and any other form of financial accommodation
Conditional sale
Agreement for sale of goods under which the purchase price is payable in instalments
And
Property in the goods or land is to remain in the seller until such circumstances as to payment of instalments fulfilled
Hire purchase
Agreement other than conditional sale which goods are hired in return for periodical payments
Customer has choice in whether to obtain legal title at end
Consumer credit institutions now authorised under
Financial Services and Markets Act 2000
FSMA
Must be authorised firm
Need to satisfy threshold conditions
Being a fit and proper person
Having suitable business model for regulated activities
Having appropriate resources to under such regulated activities
Antecedent negotiations
A term in relation to consumer credit legislation referring to negotiations by or on behalf of the other creditor prior to contract
Antecedent negotiations shall be taken to begin when
negotiator and debtor or hirer first enter into communications
Including adverts/representatives
Black horse Ltd
V
Christopher langsford
Does s56 apple to bind finance company in situation where it had no direct contact with supplying dealership and importantly where transaction was such that vehicle sold by dealership to broker to finance company.
No. Will not be caught by sub agents. Antecedent negotiations only apply to broker who actually sells to finance company
Forthright finance ltd
V
Ingate
S56 dealer (as credit broker) is remember to be agent of creditor in respect of antecedent negotiations conducted in relation to goods sold
D’s rep that would lay off debt was statement made in relation to sale of fiat and thus made finance company liable to pay off other finance company
Carey
V
HSBC bank
The way in which Info is provided should not be formulate in a way so as to mislead the debtor as to what he has agreed to to
Form and content of agreements
Set out in
S60 CCA
Schedule 1 CC(agreements) regulations 2010/2014
Parties Duration Credit amount Interest rate Total amount payable
Regulated agreement not properly executed unless
S61(1)
In prescribed form
Embodies all terms of agreements (other than implied)
Presented or sent to D or H for signature with all terms being readily legible
If improperly executed, creditor will need court order to enforce agreement s65(1)
Moorgate Services ltd
V
Hamayum kabir
Duty to give notice of cancellation rights
McGuffik
V
The royal banks of Scotland plc
Effect of non-compliance with the right to provide info means that’s the creditor cannot enforce agreement during period of non-complaince
But
Does not make credit relationship unfair
S78A (1)
Interest rates
Where rate of interest under regulated agreement is to be varied
Creditor must inform debtor in writing
Home insulation
V
Wadsley
Early and partial payments
The amount of payment for D to discharge debts will be as AGREED
Paragon finance plc
V
Nash and Staunton
Implied terms
Implied term that power to vary interest would be exercised in a reasonable manner. Under CCA means that rates can’t be dishonest, improper or unreasonable
Didn’t drop rate in line with others. Not unfair or unreasonable so not void.
They had commercially legitimate objective not lowering and so implied term of ‘reasonablness’ was satisfied
Durkin
V
DSG Retail ltd
S75 gives debtors with claims against suppliers a like claim against the creditor.
This C is concurrently liable for suppliers breach of contract
S75A
Connected lender liability
S75 - buying things with credit card
Debtor creditor supplier
If D under linked credit agreement has a claim against supplier, D may pursue claim against C where sub(2) conditions are met
Eg Supplier can’t be traced Not responded Insolvent Not obtained satisfactory response
Forward trust ltd
V
Whymak
Early payment of debts and rebate
Clear from s94 and 95 that P has intended that a D should be free to discharge his indebtedness early and should be entitled to a REBATE REFLECTING THE UNEARNED INTEREST ELEMENT
