The Consumer Credit Act 2006 (c.14) is an
Act of the
Parliament of the United Kingdom
The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...
intended to increase
consumer protection when borrowing money.
Provisions
The main provisions of the Act are to extend the scope of the
Consumer Credit Act 1974, to create an
Ombudsman scheme, and to increase the powers of the
Office of Fair Trading in relation to consumer credit, including
consumer credit agreements (CCA), and similar borrowing facilities. In addition, it permits borrowers to challenge unfair debtor-creditor relationships in court.
Consumer Credit Act 1974
The 2006 Act brings two further types of agreement under the scope of the 1974 Act:
*Consumer agreements above £25,000, to reflect growing levels of consumer borrowing and
debt
Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...
;
*I
section 1 to include small, one-man businesses and partnerships of up to three people.
Ombudsman scheme
The 2006 Act gives consumers the option of using the
Financial Ombudsman Service if they are unhappy with their lender's dispute resolution service, whether the lender consents or not. Complaints may also be raised against other types of credit related companies, such as debt-collection agencies.
Office of Fair Trading
The 2006 Act empowers the
Office of Fair Trading (OFT) to investigate applicants for consumer credit licences, to impose conditions on licences, and to impose civil penalties of up to £50,000 on companies, or £5,000 on individuals, failing to comply with its conditions. Appeal is to the
First-tier Tribunal
The First-tier Tribunal is part of the courts and tribunals service of the United Kingdom. It was created in 2008 as part of a programme, enacted in the Tribunals, Courts and Enforcement Act 2007, to rationalise the tribunal system, and has since t ...
(formerly the Consumer Credit Appeals Tribunal) and thence, with leave, to the
Upper Tribunal
The Upper Tribunal is part of the administrative justice system of the United Kingdom. It was created in 2008 as part of a programme, set out in the Tribunals, Courts and Enforcement Act 2007, to rationalise the tribunal system, and to provide a ...
.
Section 71 - Short title, commencement and extent
The following orders have been made under section 71(2):
The Consumer Credit Act 2006 (Commencement No. 1) Order 2006(S.I. 2006/1508 (C. 52))
The Consumer Credit Act 2006 (Commencement No. 2 and Transitional Provisions and Savings) Order 2007(S.I. 2007/123 (C. 6))
The Consumer Credit Act 2006 (Commencement No. 2 and Transitional Provisions and Savings) (Amendment) Order 2007(S.I. 2007/387 (C. 14))
The Consumer Credit Act 2006 (Commencement No. 3) Order 2007(S.I. 2007/3300 (C. 136))
The Consumer Credit Act 2006 (Commencement No. 4 and Transitional Provisions) Order 2008(S.I. 2008/831 (C. 40))
The Consumer Credit Act 2006 (Commencement No. 4 and Transitional Provisions) (Amendment) Order 2008(S.I. 2008/2444 (C. 105))
See also
*
Credit risk
A credit risk is risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased ...
*
Trade Practices Act 1974 (Australia)
*
Halsbury's Statutes
References
External links
Times Online article about the Act
UK Legislation
*
Explanatory notesto the Consumer Credit Act 2006.
{{UK legislation
United Kingdom Acts of Parliament 2006