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The Consumer Credit Act 1974 regulates consumer credit and consumer hire agreements for amounts up to £25,000. Its protections
apply to agreements between traders and individuals, sole traders, partnerships and unincorporated associations, but not agreements
made between traders and corporate bodies such as limited companies.
The Act lays down rules covering:
• the form and content of agreements;
• credit advertising;
• the method of calculating the Annual Percentage Rate (APR) of the Total Charge for Credit;
• the procedures to be adopted in the event of default, termination, or early settlement;
• extortionate credit bargains.
The Act also requires that all traders who make regulated agreements obtain licences from the Office of Fair Trading. Credit
brokers, debt advisors and others, may also require licences.
Appeals can be made against decisions of the Office of Fair Trading (OFT) that a person is not fit to hold a consumer credit
licence. Appeals under the Consumer Credit Act
Local trading standards departments and the Office of Fair Trading enforce the Act. The Office of Fair Trading also produces
a series of booklets about the Act and its regulations. For further information contact local trading standards departments
or the Office of Fair Trading.
Review of the Act
The DTI published a Consumer Credit White Paper in December 2003 as part of an on-going review of the Act aimed at improving
consumer credit regulation. A new Consumer Credit Act (Consumer Credit Act 2006) has completed it's parliamentary stages and
recived Royal Assent. Discussions are now taking place with interested parties about how it will be implemented. (For further
information on the new Act please click on the "Consumer Credit Act 2006" links).
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Better Business Framework
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Confident Consumers - A Fair Deal creating Prosperity & Success for All
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