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Consumer Credit Act of 1974, Chapter 39 states that it is An Act to establish for the protection of consumers ~ new system, administered by the Director General of Fair Trading, of licensing and other control] of traders concerned with the provision of credit, or the supply of goods on hire or hire-purchase, and their transactions, in place of the present enactments regulating moneylenders, pawnbrokers and hire-purchase traders and their transactions; and for related matters. [31st July 1974]
Consumer Credit Act 1974 is a consumer protection law in the UK which requires certain businesses to obtain consumer credit licenses. This Act protects any individual who receives credit up to ?25,000. All appeals under the Consumer Credit Act need to be made to the Office of Fair Trading. This Act governs personal loans and other credit agreements.
Gist of the provisions of the Consumer Credit Act 1976
Consumer Credit Act 1974 requires:
How does the Consumer Credit Act 1974 protect the consumer?
Consumer Credit Act regulates all those who are involved in offering credit. It enables the consumers to gain a better understanding of the nature of the agreements they are getting into. Consumers tend to get lured by attractive interest rates and freebies offered by lenders but this Act enables the consumers to make the best informed choice.
Consumer Credit Act also controls and regulates the activities of those who can provide credit under this Act. It also incorporates what steps a lender must take in case of default. This is not just limited to banks but also traders who offer goods on hire purchase and the various transactions they undertake.
This Act lays down rules which covers the form and content of all agreements, credit advertising, method of calculating Annual Percentage Rate (APR) and the procedures which will be adopted in the event of early settlements, defaults or even termination.
Consumer Credit Act 2006
Consumer Credit Act 2006 is the most significant change since Consumer Credit Act 1976. Although it received the Royal Assent on March 30th 2006, the key implementation dates set out are 6th April 2007 and 6th April 2008.
The key changes to the Consumer Credit Law along with its implementation dates are:
Consumer Credit Act assures protection o people who enter into credit agreements.
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