Consumer Credit

Question 1

Consumer credit is

Answer 1

Credit advanced to consumers for purchase of goods or services

Credit includes cash loan and any other form of financial accommodation

Question 2

Conditional sale

Answer 2

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

Question 3

Hire purchase

Answer 3

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

Question 4

Consumer credit institutions now authorised under

Answer 4

Financial Services and Markets Act 2000

Question 5

FSMA

Must be authorised firm

Need to satisfy threshold conditions

Answer 5

Being a fit and proper person

Having suitable business model for regulated activities

Having appropriate resources to under such regulated activities

Question 6

Antecedent negotiations

Answer 6

A term in relation to consumer credit legislation referring to negotiations by or on behalf of the other creditor prior to contract

Question 7

Antecedent negotiations shall be taken to begin when

Answer 7

negotiator and debtor or hirer first enter into communications

Including adverts/representatives

Question 8

Black horse Ltd
V
Christopher langsford

Answer 8

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

Question 9

Forthright finance ltd
V
Ingate

Answer 9

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

Question 10

Carey
V
HSBC bank

Answer 10

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

Question 11

Form and content of agreements

Set out in

Answer 11

S60 CCA

Schedule 1 CC(agreements) regulations 2010/2014

Parties 
Duration 
Credit amount 
Interest rate 
Total amount payable

Question 12

Regulated agreement not properly executed unless

S61(1)

Answer 12

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)

Question 13

Moorgate Services ltd
V
Hamayum kabir

Answer 13

Duty to give notice of cancellation rights

Question 14

McGuffik
V
The royal banks of Scotland plc

Answer 14

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

Question 15

S78A (1)

Interest rates

Answer 15

Where rate of interest under regulated agreement is to be varied

Creditor must inform debtor in writing

Question 16

Home insulation
V
Wadsley

Answer 16

Early and partial payments

The amount of payment for D to discharge debts will be as AGREED

Question 17

Paragon finance plc
V
Nash and Staunton

Answer 17

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

Question 18

Durkin
V
DSG Retail ltd

Answer 18

S75 gives debtors with claims against suppliers a like claim against the creditor.

This C is concurrently liable for suppliers breach of contract

Question 19

S75A

Connected lender liability

S75 - buying things with credit card
Debtor creditor supplier

Answer 19

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

Question 20

Forward trust ltd
V
Whymak

Answer 20

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