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ARTICLE · 16 APRIL 2007

Update On The Consumer Credit Act 2006

CMS Cameron McKenna Nabarro Olswang
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Key provisions of the Consumer Credit Act 2006 were brought into force on 6 April 2007. The following changes amend the Consumer Credit Act 1974 (the "Act") and represent a significant reform to this regime.

United KingdomConsumer Protection
Nick Paul
Nick Paul
Kate Duke
Kate Duke

Key provisions of the Consumer Credit Act 2006 were brought into force on 6 April 2007. The following changes amend the Consumer Credit Act 1974 (the "Act") and represent a significant reform to this regime.

  • New definition of "individual".
    •  New lending to partnerships of more than 3 persons is excluded from regulation.
  • Abolition of automatic unenforceability.
    •  Courts will now have discretion to enforce all invalidly executed agreements; the restrictions on this discretion, which applied in respect of certain infringements have now been lifted.
  • Financial Ombudsman Service ("FOS").
    •  A new consumer credit jurisdiction is added to FOS’ existing mandate. Customers will be entitled to refer complaints (relating to an event after 6 April 2007) to FOS after they have raised the matter with the licencee. Businesses must ensure they have an complaints handling policy and that it meets the minimum standards set out by the DISP Sourcebook, part of the Financial Service Authority’s Handbook.

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