Stakeholder Notice - June 2006

As you know, the Consumer Credit Act 2006 received Royal Assent on 30 March.  The timetable for implementation of the Act was announced at an event we held on 25 May. Consistent with this timetable, our first Commencement Order under the new Act was made on 10 June, with the first provisions in it coming into force today. The Order is available from the Office of Public Sector Information (OPSI) website at http://www.opsi.gov.uk/si/si2006/uksi_20061508_en.pdf. The Order brings into force today powers which enable the Secretary of State to make secondary legislation (Statutory Instruments), enable the Office of Fair Trading (OFT) to give general notices, and define 'default sum'. These powers do not make any real 'change' on their own, but effectively prepare the way for the more substantive provisions in the Act to be brought into force later on. The Order also brings into force sections 59-61 and Schedule 2 of the Act, laying the foundations for the new consumer credit jurisdiction (CCJ) - the alternative dispute resolution scheme to be provided by the Financial Ombudsman Service (FOS). As explained in our implementation timetable, the CCJ itself will begin functioning from 6 April 2007, but the powers in the Order enable FOS to consult on the Rules for the CCJ, which is important preparatory work. This Order also includes the miscellaneous provisions in sections 65 - 69 of the Act, which also come into force today.  These are fairly standard, technical provisions, which do not make any substantive change.The only substantive provisions in the Order are:

• Section 63, which also comes into force today - this is essentially an administrative change which will improve OFT's processing of requests from businesses to disapply the hirer's right to terminate hire agreements, where this is in the hirer's interest; and • Section 14(1), and associated transitional provision, future-dated to come into force on 1 October 2006 (Common Commencement Date) - this will extend the period that consumers have to respond to default notices from 7 to 14 days.

The implementation timetable is available on our website at http://www.dti.gov.uk/consumers/consumer-finance/credit-act-2006/Timetable/page29768.html. We will continue to update our webpages with all relevant information relating to the implementation process, as it becomes available. Ends.