Consumer Credit Act 1974
The Consumer Credit Act 1974 (as amended by the Consumer Credit Act 2006) regulates consumer credit and consumer hire agreements. 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; and
• the unfair relationships test.
The Act also requires that all traders who make regulated agreements or exercise rights under a regulated agreement obtain a consumer credit licence from the Office of Fair Trading (OFT). Credit brokers, credit repair businesses, debt advisors, debt management businesses and others, may also require licences.
Appeals against OFT licensing decisions should be made to the Consumer Credit Appeals Tribunal (part of the Tribunals Service).
Local trading standards departments and the OFT enforce the Act. The OFT also produces guidance about the Act and its regulations. For further information contact local trading standards departments or the Office of Fair Trading.
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