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- Consumer Credit Act
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Current Issues
Consumer Credit Act Changes : Timetable
Late 2006
Changes to the definition of 'individual' - this removes partnerships consisting of four or more persons from the definition.
6th April 2007
Abolition of automatic enforceability of agreements
Introduction of 'unfair relationships' for all new agreements and 'linked transactions' (e.g. payment protection insurance) from this date. This replaces the 'extortionate credit' test. FSA regulated mortgages are excluded from this. This will also apply retrospectively to all pre-April 07 agreements once the transitional period has expired on 6th April 2008.
The establishment of an alternative dispute resolution service for consumer credit complaints. This is to be provided by the existing Financial Ombudsman Scheme. It is proposed that the scheme will not start until October 2008 for complaints relating to debt administration, the provision of credit information services and the operation credit reference agencies.
1st April 2008
Removal of the financial limit - meaning that all new credit agreements, regardless of value, will be within the scope of the CCA.
The introduction of an exemption for high net worth customers and businesses.
Introduction of provisions in relation to fees payable on application for or renewal of a consumer credit licence. This will allow OFT to charge different amounts or to charge no fee at all depending on the business structure of the applicant and the activities which it carries out.
In determining whether an applicant for a licence is a 'fit person' the OFT will be required to consider:
- the applicant's skills, knowledge and experience, and that of any persons who will participate in any business carried on under the licence.
- the practices and procedures put in place by the applicant in relation to CCA regulated business.
- evidence of fraud, dishonesty or violence, or non-compliance with any legislation which affects provision of consumer credit. This includes 'deceitful, oppressive or otherwise unfair or improper' practices.
The powers of the OFT will be extended, including enabling it to impose requirements on licensees and other supervisory bodies, and to monitor the business activities of licensees. Licensees will be required to inform the OFT of changes in any information submitted as part of a licensing application.
The establishment of a Consumer Credit Appeals Tribunal. This replaces the current system of appeals to the Secretary of State.
1st October 2008
The scope of the licensing regime will be extended to include those who provide 'debt administration' and 'credit information services'.