Which Hire Agreements Are Covered By The Consumer Credit Directive

Prior to the application of the Consumer Credit Act, consumer credit legislation was criticized and focused on specific areas rather than consumer credit as a whole, such as lenders and hire-purchase agreements. Following the 1971 report of the Crowther Committee, it was decided that a comprehensive reform of the Consumer Credit Act was needed and a bill to that effect was submitted to Parliament. Although its progress was interrupted by parliament by parliamentary elections, thanks to the support of the government and the opposition, the law quickly went through the legislative process and entered into force on 31 July 1974. Any business currently covered or exempted from UK consumer credit law should now consider how it will be affected by the changes to the CCD. In particular, advertising, credit agreements, other consumer-oriented documents, business processes, employee training and IT systems should be taken into account. The borrower may terminate a CÉDH at any time with a maximum of one month`s notice. The creditor must terminate the contract for at least two months and the termination must indicate objectively justified reasons for the termination. The duty to provide notice does not apply in certain situations. B, for example, whether dismissal would jeopardise the prevention of criminal offences. Debt adjustment occurs when a business or individual negotiates with the creditor or owner under an agreement on behalf of the debtor to change the terms of debt relief, assumes the debt against payment by the debtor, or carries out “a similar activity related to the liquidation of a debt.” Again, this is a vast area; The basic definition includes, for example, lawyers and accountants who act as negotiators for clients who owe money to a third party. There are some exceptions; A lawyer negotiating the settlement of his client`s debts is not considered a debt regulator because he or she acts as a debt regulator under section 146 of the Act, which excludes “a lawyer who engages in contentious matters” within the meaning of the Lawyers Act, 1957.

[62] The existing right of a consumer to repay a credit in advance is extended to a right to partial early repayment on a similar basis. The calculation of the amount refundable to a partial refund is carried out according to a new formula and informs the consumer of how the refund will affect future payments and the outstanding balance. If a fixed-rate loan is repaid on time and the amount repaid exceeds £8,000 over a 12-month period, the lender can claim compensation of up to 1% of the prepayment amount. So far, there has been no specific obligation to check creditworthiness, although there have been (and still are) provisions on irresponsible lending. The new rules do not specify which controls must be carried out and lenders must determine the appropriate methodologies for each set of circumstances. Information on the requirements can be found on the Office of Fair Trading website in its response to “Irresponsible Lending – OFT Guidance for Creditors”, March 2010 (updated February 2011). The law is mainly aimed at commercial traders and therefore excludes non-commercial agreements. Non-commercial agreements are defined in law as agreements in which neither the creditor nor the debtor performs the transaction in any way for commercial purposes. Non-commercial agreements are exempt from Part V of the Act. [25] A licence may be terminated upon the death of the licensee, the licensee goes bankrupt, the licensee becomes a patient under the Mental Health Act, 1959, a bankruptcy business under the Bankruptcy Act, 1914 when the licence is granted to a trustee, or a business under the Deeds of Arrangement Act, 1914 where the licensee`s licence is given to a trustee. These provisions apply to natural persons, entities without legal capacity and licensed partnerships. [31] These provisions do not apply to corporations because the government became aware, after consultation, that the winding-up and liquidation of a corporation would raise licensing issues, in part because the entity continues to negotiate through a liquidator.

[32] The Crowther Panel recommended that the search for loans at the front door be completely prohibited …