Credit Consumer Act by Dean Dunham

publication date: Aug 23, 2014
author/source: Dean Dunham

Dean DunhamCredit cards, loan agreements and hire agreements are all part of everyday life for most people. It is therefore imperative that you know what laws govern and protect you in relation to these. The law in question is the Consumer Credit Act 1974, amended in 2006 (“the Act”) and various Regulations. Here are five things that you should know.

1.         Your right to cancel a credit agreement

Just like when you buy goods online, you have a “cooling off” period and therefore the right to cancel a credit agreement immediately after you have taken it out. You must do this within five days when the credit agreement is not signed at the creditor’s usual place of business and 14 days when the credit agreement is signed through an intermediary (such as a broker).

2.         Your right to a copy of the agreement

You have the right to request a copy of the signed credit agreement from the creditor (section 77 of the Act relates to fixed sum loan agreements, section 78 running-account credit and section 79 hire agreements). You also have the right to ask for any other information that you need about the agreement. Your request should be made to the creditor along with a cheque for £1 and they then have 12 days to respond.

3.         Your right to access your Credit File

If you have been turned down for a credit agreement, you have the right, under sections 157-159 of the Act, to request that the creditor provides you with details of the credit reference agency they used to access your credit file. You must do this in writing within 28 days and the creditor must respond to your request within 7 days.  You can then investigate what the reasons were for the refusal.

Also, if you believe that your credit file contains inaccurate or out-of-date information, you can ask the credit reference agency to amend it. This right is not under the Act but instead the Consumer Credit (Credit Reference Agency) Regulations 2000.

4.         Your right to claim against your credit card provider

If you pay for goods or services with your credit card and the cost is between £100 and £30,000 you will benefit from a valuable protection. Section 75 of the Act therefore says that you can ask the credit card provider to give your money back if anything goes wrong.

5.         Your right to say “No”

The Act and the various regulations are very strict in relation to information that the credit agreement should contain, information that the creditor should supply you with and procedures that the creditor should follow. If the creditor breaches any of these requirements you can say no if they chase you for the debt. The key points are:

  • For all credit agreements made after 31/05/05, you must be told, either before the agreement is concluded or immediately afterwards, who you are contracting with, the credit limit, the agreement duration, the APR, the total amount repayable, your cancelation rights and your early repayment rights

If any of this information is missing, or simply not provided to you within seven days, it may mean the agreement is legally unenforceable, and the creditor may have to seek a court order.

  • As per point 2 above, the creditor must supply you with a copy of your agreement upon request.

If they fail or are unable to do this they technically cannot enforce the agreement through the courts. However, this has been the subject of many court cases and the current position is that the creditor simply needs to supply a "specimen copy" of the agreement as opposed to a copy of the actual original. 

  • If you default on two or more payments the creditor must send you a default notice within 14 days of the second default payment. This notice must state details of the breach and how you can rectify such breach.

The creditor will not be able to take any action against you, including enforcing the debt or repossessing goods under a hire agreement, unless and until the above procedure has been followed. They must also give you 14 days to respond.

  • You can ask for a "time order" from the courts if you need longer to pay. If you need this ask the creditor first.

For further information on your rights in relation visit Dean’s legal and consumer website