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Consumer Credit Information

by Dispute Resolution Team

Following the ease of availablity in gaining credit, a large number of people are facing the fall out of a growing recession already burdened with debts.

Consumer Credit

There has been much comment in the press and media about the collapse of the lending market. There are however many problems that have arisen not from the credit no longer being available, but rather that prior to the collapse of the lending market, that credit was so readily available. Long gone were the days that access to a bank loan required an interview with a bank manager, seemingly to prove that you did not in fact require the money, before you were considered a good prospect for the bank to lend to you. Instead credit was easily available, almost at the touch of a button.

As a consequence a large number of people are facing the fall out of a growing recession already burdened with debts. Naturally the lenders operating in an adverse economic climate seem to be more inclined to enforce their rights under the agreement if the borrower ceases to keep up the repayments in the terms agreed.

Unenforceable Agreements

The credit agreement dictates the terms upon which the credit was given and repayment should be made. As lenders seek to enforce those terms, borrowers should be aware that their rights are also protected. The Consumer Credit Act 1974, as variously amended, sets out the duties and obligations of both the lender and the borrower in any regulated agreement, including credit cards. The Act provides that when entering into an agreement the lender must provide certain information, known as "prescribed terms". If those prescribed terms are missing or incorrectly stated then the agreement itself may be unenforceable. Strictly speaking this means that the Court should be unable to force the borrower to repay the outstanding credit on a regulated agreement entered into before 6 April 2007.

The Ascot Lawyers dispute resolution team can be reached on 01344 783890. Call now to see where we can help or use our contact form.

Practically it is quite common for the lender to try to force the matter through the Court without providing a copy of the agreement, and therefore neither the Court nor the borrower are aware that the agreement may fail to comply with the Consumer Credit Act in such a way that it is in fact unenforceable. If legal proceedings have already commenced the agreement becomes a "disclosable" document. The borrower should request a copy of the agreement signed by both the borrower and the lender in order to have the same assessed.

The Consumer Credit Act also makes a provision for the lender to provide the borrower with a copy of the agreement. Borrowers would be wise to remember this provision particularly if they are under increasing pressure from the lender with regards to repayments. The request should be made in writing and a fee of £1.00 is payable to the lender. This is particularly relevant where legal proceedings have not yet commenced. Should the lender fail to provide a copy within 12 working days the agreement becomes unenforceable until such time as a true copy of the agreement is provided.

As with any contract borrowers ought to be aware of the contract terms, particularly if the lender is seeking to use the terms of the agreement against the borrower. As in all cases people are encouraged to be aware of their rights, however in respect to credit agreements it pays also to be aware of the lender's obligations.

Borrowers seeking to rely upon their rights under the Consumer Credit Act need to be clear as to exactly what the agreement says. Nobody would want to allow their case to go to court simply to find that their agreement is in order and therefore they not only face an order to pay the debt in full, but potentially now also have to pay some or all of the lender's legal costs. A proper understanding of the agreement is therefore imperative.

Warning: Your home may be at risk if you fail to keep up repayments on a mortgage or other loan secured upon it.

Please contact a member of the dispute resolution team on 0845 300 3574 and we will be happy to give you advice and guidance.

You can also contact us via our online contact form and we will respond quickly.

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