The Consumer Credit Act of 1974 was brought about to protect UK consumers. However, the terms that allowed the consumer protection were not clear and therefore, for decades, the Credit Industry was allowed a free reign with little resistance or challenge from Consumers.
According to the Act, a finance contract needs to be drawn up correctly, if it isn’t then the contract may be deemed to be unenforceable or unfair. An unenforceable credit agreement means that it cannot be protested against by the creditor or lender for non-repayment by the debtor in the Court. Prior to April 2007, many finance contracts were drawn up incorrectly. The majority of defective contracts were missing important information as defined in the Act such as the annual percentage rate (APR), length of contract, the total amount repayable and various other terms and conditions that a customer must know about.
However, these unclear terms of protection have now been changed as a result of the implementation of the Consumer Credit Act of 2006 which makes clear to all parties that Consumers can challenge a Credit Agreement if they believe it to be unfair. |
