OFT & Consumer Credit Act

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OFT & Consumer Credit Act

The Consumer Credit Act 1974 requires most businesses that lend money to consumers or offer goods or services on credit or engage in certain ancillary credit activities to be licensed by the OFT. Trading without a licence in such cases is a criminal offence and can result in a fine and/or imprisonment.

The Act also regulates the way in which consumer credit licensees carry on business. For example, there are rules on advertising, pre-contract disclosure, credit agreements and post-contractual information. In addition, the Act confers certain rights on consumers, including in relation to withdrawal from a credit agreement, early settlement, and section 75 (joint and several liability). A brief summary of the key provisions, together with reference to relevant legislation and guidance, is set out in the pages below.

• Pre-contract information
• Credit and hire agreements
• Post-contract information
• Early settlement
• Exempt agreements
• Brokerage fees
• Equal liability
• Credit advertising
• Unenforceable credit agreements (information requests under section 77/78/79)
• Information sheets
• Unfair relationships