Consumer Credit Act 2006 Explained

Short Title:	Consumer Credit Act 2006^[1]
Parliament:	Parliament of the United Kingdom
Long Title:	An Act to amend the Consumer Credit Act 1974; to extend the ombudsman scheme under the Financial Services and Markets Act 2000 to cover licensees under the Consumer Credit Act 1974; and for connected purposes.
Year:	2006
Statute Book Chapter:	2006 c.14
Royal Assent:	30 March 2006
Status:	amended
Original Text:	http://www.legislation.gov.uk/ukpga/2006/14/contents/enacted
Legislation History:	https://publications.parliament.uk/pa/ld200506/ldbills/064/2006064.htm
Revised Text:	http://www.legislation.gov.uk/ukpga/2006/14/contents

The Consumer Credit Act 2006 (c.14) is an Act of the Parliament of the United Kingdom 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.^[2]

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;
• In 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 (formerly the Consumer Credit Appeals Tribunal) and thence, with leave, to the Upper Tribunal.

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
• Trade Practices Act 1974 (Australia)
• Halsbury's Statutes

External links

• Times Online article about the Act

UK Legislation

• • Explanatory notes to the Consumer Credit Act 2006.

Notes and References

1. The citation of this Act by this short title is authorised by section 71(1) of this Act.
2. Web site: Unfair Relationships under the Consumer Credit Act 2006 . . 28 February 2013 . The Payday Review . 2 March 2013 . dead . https://web.archive.org/web/20130330140926/http://www.thepaydayreview.co.uk/guides/law/unfair-relationships-under-the-consumer-credit-act-2006/ . 30 March 2013 .