You have new rights against the finance companies.
The Consumer Credit Act 2006 establishes a fairer, clearer and more competitive market for consumer credit, updating consumer credit legislation that has been in place since the 1970s and making it more relevant to today’s consumers.
Many key provisions have come into force in 2007 and the Act is due to be fully implemented by October 2008.
You have more rights than you know about and it's time we started enforcing our rights as British Citizens.
We have more rights than you are probably aware off, but demanding them over the phone, with someone in a call centre is going to get you nowhere.
Obligations of finance companies
Under consumer credit law, finance companies must set out credit and hire agreements in a particular way and make sure they contain certain information. New legislation means that, from April 2007 onwards, unfair credit agreements can be challenged in the courts.
There are also rules on how agreements are entered into, and the information that must be provided to consumers.
CCA 2006 (The Consumer credit Act 2006)
On 6 April 2007, the remit of the Financial Ombudsman Service (FOS) was extended to cover consumer credit and the Unfair Relationships Test was introduced for new agreements. On 6 April 2008, the OFT’s new strengthened licensing regime was introduced, the Consumer Credit Appeals Tribunal (for appeals against OFT licensing decisions) was established, the financial limit (of £25,000) was removed so all new credit agreements (unless specifically exempt) regardless of value are regulated, and the Unfair Relationships Test was extended to all existing credit agreements.
From 1 October 2008, lenders will be required to provide borrowers with much more information about their accounts, such as an annual statement and regular notices when consumers fall into arrears or incur a default sum, and debt administration service providers and credit information (repair) service providers will need a consumer credit licence as these services will be regulated by the OFT.
The Consumer Credit Act 2006 is good for consumers as it allows them to exercise their rights more effectively to challenge unfair conduct by lenders and to obtain redress.
They will also be better informed about the state of their accounts, allowing them to manage their financial affairs more effectively. Alternative Dispute Resolution Scheme
From 6 April 2007, consumers who have complained to a consumer credit business and not received a satisfactory result have been able to take their complaint to the Financial Ombudsman Service.
FOS’ remit was extended (from covering 70% of the financial services market) to cover all consumer credit businesses on 6 April 2007). . FOS is free and quicker, easier and less stressful for consumers than going to court.
For more information, contact the Financial Ombudsman Service. Unfair Relationships Test
The unfair relationships test provides consumers with a broad right to challenge unfair credit relationships in court.
The court has the power, if it finds that a relationship between a debtor or creditor is unfair, to remedy the unfairness by reopening the agreement or even setting it aside.
The new test should deter credit businesses from operating agreements unfairly, increasing competition and therefore raising standards across the industry.
This Test was introduced for all new agreements from 6 April 2007 and was extended to all existing agreements on 6 April 2008. For more information, contact the Office of Fair Trading.
Informing consumers
Consumers will be kept informed of the status of their accounts throughout the life of their agreement. From 1 October 2008 lenders will be required to provide regular statements and information when there are problems, such as going into arrears. For more information, contact the Office of Fair Trading. Larger Credit Agreements
The Act extends the statutory protection to consumers entering into larger credit agreements over £25,000. Removing this financial limit (on 6 April 2008) means that all consumer borrowing (unless specifically exempt) regardless of value is protected under the Act.
