Aug/091
Consumer Credit Act 1974 - Explained
According to Google and other accurate sources, ‘Consumer Credit Act’ is an increasingly common search term on search engines. We at Consumer Help have decided to break it down so that it is as easy as possible for the average consumer (not business) to understand.
The Consumer Credit Act of 1974 is one of the largest pieces of legislation that exists in the UK and has become an increasingly important document to refer back to when discussing and arguing what a consumer and/or company are entitled to do in any given situation.
We appreciate that the Consumer Credit Act 1974 is very difficult to understand because of its length and also its terminology so we have abbreviated the whole legislation whilst including the most important parts and put it in Lehman’s terms for you.
Firstly, as a consumer, ask yourself this: What type of credit agreement do you have? Credit Cards, Store Cards, Personal Loans, Overdrafts, Mortgage, Secured Loan on Property, Short Term Agreements, Charge Cards, Credit Sale Agreements, Hire Purchase, Hire Agreements and Conditional Sale Agreements.
Conditional Sale Agreements
Here, the consumer may pay a large initial deposit or pay nothing at all for the first couple of years. Whatever the deposit, the consumer will still rightfully own the purchased goods by law the second the credit sale agreement is signed regardless of how many payments you have made. If an interest free credit option has been taken out, a specified time to pay the balance back will be given otherwise the consumer is liable to be entered into a longer contract where interest can be charged against you.
Hire purchase (HP) agreements
Under this arrangement, you will pay monthly instalments to hire the item, but will not legally own it until the final instalment has been paid. This type of agreement may also give you the option to buy with a lump sum at the end of the period, such as with ‘balloon payments’ on car finance.
Hire agreements
This is simply the hire of goods at a (usually low) monthly fee. You will never own the item, but must keep up the payments for the term of the contract to avoid having the goods repossessed and being sued for the outstanding debt.
Conditional sale agreements
This is very similar to the HP agreement described above. Even though you will be in possession of the goods in question, you will only own them on the condition that you have paid all the instalments. However, the agreement may also specify other conditions to be met before ownership can take place.
In what way was the contract made?
Basically, this refers to where you signed the contract. Was it in the presence of the creditor at their place of business? Was it in the presence of the creditor but away from their place of business? Was it at home? Or were you with a broker – either in their office or at home? This will have important implications for your cooling off rights, the information which must be supplied to you and the way in which it must be presented. We will look at cooling off and required information in the following two sections.
Jun/090
Consumer Credit Act Helping to Boost Online Sales
Christmas 2008 came and went with stories about shopping figues being lower than ever and high street stores going bust within hours of each other. We know now that the crisis that was predicted never really materialised despite well-known chains such as Woolworths and Zavvi succumbing to low sales figures. However, internet shopping defied the economic downturn and even went on to level out the overall sales figures similar to the previous year.
Customers using credit cards, rather than debit cards, to purchase goods online enjoy greater legal protection from fraud. Section 75 of the Consumer Credit Act allows cardholders to claim against their card issuer, as well as their supplier, if they suffer breach of contract or misrepresentation for items costing over £100.
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