Consumer Credit Act 1974

Consumer Credit Act 1974

Part I

Director General of Fair Trading

1 General functions of Director

(1) It is the duty of the Director General of Fair Trading (“the Director”)—

(a) to administer the licensing system set up by this Act,

(b) to exercise the adjudicating functions conferred on him by this Act in relation to the issue, renewal, variation, suspension and revocation of licences, and other matters,

(d) where necessary or expedient, himself to take steps to enforce this Act, and regulations so made.

(2) It is the duty of the Director, so far as appears to him to be practicable and having regard both to the national interest and the interests of persons carrying on businesses to which this Act applies and their customers, to keep under review and from time to time advise the Secretary of State about—

(a) social and commercial developments in the United Kingdom and elsewhere relating to the provision of credit or bailment or (in Scotland) hiring of goods to individuals, and related activities; and

(b) the working and enforcement of this Act and orders and regulations made under it.

2 Powers of Secretary of State

(1) The Secretary of State may by order—

(a) confer on the Director additional functions concerning the provision of credit or bailment or (in Scotland) hiring of goods to individuals, and related activities, and

(b) regulate the carrying out by the Director of his functions under this Act.

(2) The Secretary of State may give general directions indicating considerations to which the Director should have particular regard in carrying out his functions under this Act, and may give specific directions on any matter connected with the carrying out by the Director of those functions.

(3) The Secretary of State, on giving any directions under subsection (2), shall arrange for them to be published in such manner as he thinks most suitable for drawing them to the attention of interested persons.

(4) With the approval of the Secretary of State and the Treasury, the Director may charge, for any service or facility provided by him under this Act, a fee of an amount specified by general notice (the “specified fee”).

(5) Provision may be made under subsection (4) for reduced fees, or no fees at all, to be paid for certain services or facilities by persons of a specified description, and references in this Act to the specified fee shall, in such cases, be construed accordingly.

(6) An order under subsection (1)(a) shall be made by statutory instrument and shall be of no effect unless a draft of the order has been laid before and approved by each House of Parliament.

(7) References in subsection (2) to the functions of the Director under this Act do not include the making of a determination to which section 41 or 150 (appeals from Director to Secretary of State) applies.

3 . . .

4 Dissemination of information and advice

The Director shall arrange for the dissemination, in such form and manner as he considers appropriate, of such information and advice as it may appear to him expedient to give to the public in the United Kingdom about the operation of this Act, the credit facilities available to them, and other matters within the scope of his functions under this Act.

5 Redemption by law of feuduty, ground annual, etc on transfer of land for valuable consideration

. . .

6 Form etc of application

(1) An application to the Director under this Act is of no effect unless the requirements of this section are satisfied.

(2) The application must be in writing, and in such form, and accompanied by such particulars, as the Director may specify by general notice, and must be accompanied by the specified fee.

(3) After giving preliminary consideration to an application, the Director may by notice require the applicant to furnish him with such further information relevant to the application as may be described in the notice, and may require any information furnished by the applicant (whether at the time of the application or subsequently) to be verified in such manner as the Director may stipulate.

(4) The Director may by notice require the applicant to publish details of his application at a time or times and in a manner specified in the notice.

7 Penalty for false information

A person who, in connection with any application or request to the Director under this Act, or in response to any invitation or requirement of the Director under this Act, knowingly or recklessly gives information to the Director which, in a material particular, is false or misleading, commits an offence.

Part II

Credit Agreements, Hire Agreements and Linked Transactions

8 Consumer credit agreements

(1) A personal credit agreement is an agreement between an individual (“the debtor”) and any other person (“the creditor”) by which the creditor provides the debtor with credit of any amount.

(2) A consumer credit agreement is a personal credit agreement by which the creditor provides the debtor with credit not exceeding £25,000.

(3) A consumer credit agreement is a regulated agreement within the meaning of this Act if it is not an agreement (an “exempt agreement”) specified in or under section 16.

9 Meaning of credit

(1) In this Act “credit” includes a cash loan, and any other form of financial accommodation.

(2) Where credit is provided otherwise than in sterling, it shall be treated for the purposes of this Act as provided in sterling of an equivalent amount.

(3) Without prejudice to the generality of subsection (1), the person by whom goods are bailed or (in Scotland) hired to an individual under a hire-purchase agreement shall be taken to provide him with fixed-sum credit to finance the transaction of an amount equal to the total price of the goods less the aggregate of the deposit (if any) and the total charge for credit.

(4) For the purposes of this Act, an item entering into the total charge for credit shall not be treated as credit even though time is allowed for its payment.

10 Running-account credit and fixed-sum credit

(1) For the purposes of this Act—

(a) running-account credit is a facility under a personal credit agreement whereby the debtor is enabled to receive from time to time (whether in his own person, or by another person) from the creditor or a third party cash, goods and services (or any of them) to an amount or value such that, taking into account payments made by or to the credit of the debtor, the credit limit (if any) is not at any time exceeded; and

(b) fixed-sum credit is any other facility under a personal credit agreement whereby the debtor is enabled to receive credit (whether in one amount or by instalments).

(2) In relation to running-account credit, “credit limit” means, as respects any period, the maximum debit balance which, under the credit agreement, is allowed to stand on the account during that period, disregarding any term of the agreement allowing that maximum to be exceeded merely temporarily.

(3) For the purposes of section 8(2), running-account credit shall be taken not to exceed the amount specified in that subsection (“the specified amount”) if—

(a) the credit limit does not exceed the specified amount; or

(b) whether or not there is a credit limit, and if there is, notwithstanding that it exceeds the specified amount,—

(i) the debtor is not enabled to draw at any one time an amount which, so far as (having regard to section 9(4)) it represents credit, exceeds the specified amount, or

(ii) the agreement provides that, if the debit balance rises above a given amount (not exceeding the specified amount), the rate of the total charge for credit increases or any other condition favouring the creditor or his associate comes into operation, or

(iii) at the time the agreement is made it is probable, having regard to the terms of the agreement and any other relevant considerations, that the debit balance will not at any time rise above the specified amount.

11 Restricted-use credit and unrestricted-use credit

(1) A restricted-use credit agreement is a regulated consumer credit agreement—

(a) to finance a transaction between the debtor and the creditor, whether forming part of that agreement or not, or

(b) to finance a transaction between the debtor and a person (the “supplier”) other than the creditor, or

and “restricted-use credit” shall be construed accordingly.

(2) An unrestricted-use credit agreement is a regulated consumer credit agreement not falling within subsection (1), and “unrestricted-use credit” shall be construed accordingly.

(3) An agreement does not fall within subsection (1) if the credit is in fact provided in such a way as to leave the debtor free to use it as he chooses, even though certain uses would contravene that or any other agreement.

(4) An agreement may fall within subsection (1)(b) although the identity of the supplier is unknown at the time the agreement is made.

12 Debtor-creditor-supplier agreements

A debtor-creditor-supplier agreement is a regulated consumer credit agreement being—

(a) a restricted-use credit agreement which falls within section 11(1)(a), or

(b) a restricted-use credit agreement which falls within section 11(1)(b) and is made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, between himself and the supplier, or

(c) an unrestricted-use credit agreement which is made by the creditor under pre-existing arrangements between himself and a person (the “supplier”) other than the debtor in the knowledge that the credit is to be used to finance a transaction between the debtor and the supplier.

13 Debtor-creditor agreements

A debtor-creditor agreement is a regulated consumer credit agreement being—

(a) a restricted-use credit agreement which falls within section 11(1)(b) but is not made by the creditor under pre-existing arrangements, or in contemplation of future arrangements, between himself and the supplier, or

(b) a restricted-use credit agreement which falls within section 11(1)(c), or

(c) an unrestricted-use credit agreement which is not made by the creditor under pre-existing arrangements between himself and a person (the “supplier”) other than the debtor in the knowledge that the credit is to be used to finance a transaction between the debtor and the supplier.

14 Credit-token agreements

(1) A credit-token is a card, check, voucher, coupon, stamp, form, booklet or other document or thing given to an individual by a person carrying on a consumer credit business, who undertakes—

(a) that on the production of it (whether or not some other action is also required) he will supply cash, goods and services (or any of them) on credit, or

(b) that where, on the production of it to a third party (whether or not any other action is also required), the third party supplies cash, goods and services (or any of them), he will pay the third party for them (whether or not deducting any discount or commission), in return for payment to him by the individual.

(2) A credit-token agreement is a regulated agreement for the provision of credit in connection with the use of a credit-token.

(3) Without prejudice to the generality of section 9(1), the person who gives to an individual an undertaking falling within subsection (1)(b) shall be taken to provide him with credit drawn on whenever a third party supplies him with cash, goods or services.

(4) For the purposes of subsection (1), use of an object to operate a machine provided by the person giving the object or a third party shall be treated as the production of the object to him.

15 Consumer hire agreements

(1) A consumer hire agreement is an agreement made by a person with an individual (the “hirer”) for the bailment or (in Scotland) the hiring of goods to the hirer, being an agreement which—

(a) is not a hire-purchase agreement, and

(b) is capable of subsisting for more than three months, and

(2) A consumer hire agreement is a regulated agreement if it is not an exempt agreement.

16 Exempt agreements

(1) This Act does not regulate a consumer credit agreement where the creditor is a local authority . . ., or a body specified, or of a description specified, in an order made by the Secretary of State, being—

(a) an insurer,

(b) a friendly society,

(d) a charity,

(e) a land improvement company, . . .

(f) a body corporate named or specifically referred to in any public general Act

(ff) a body corporate named or specifically referred to in an order made under—

section 156(4), 444(1) or 447(2)(a) of the Housing Act 1985,

section 156(4) of that Act as it has effect by virtue of section 17 of the Housing Act 1996 (the right to acquire),

section 2 of the Home Purchase Assistance and Housing Corporation Guarantee Act 1978 or section 31 of the Tenants’ Rights, &c (Scotland) Act 1980, or

Article 154(1)(a) or 156AA of the Housing (Northern Ireland) Order 1981 or Article 10(6A) of the Housing (Northern Ireland) Order 1983; or

(g) a building society, or

(h) a deposit-taker.

(2) Subsection (1) applies only where the agreement is—

(a) a debtor-creditor-supplier agreement financing—

(i) the purchase of land, or

(ii) the provision of dwellings on any land,

and secured by a land mortgage on that land, or

(b) a debtor-creditor agreement secured by any land mortgage; or

(i) an agreement falling within paragraph (a), or

(ii) an agreement falling within paragraph (b) financing—

(aa) the purchase of any land, or

(bb) the provision of dwellings on any land,

and secured by a land mortgage on the land referred to in paragraph (a) or, as the case may be, the land referred to in sub-paragraph (ii).

(3) Before he makes, varies or revokes an order under subsection (1), the Secretary of State must undertake the necessary consultation.

(3A) The necessary consultation means consultation with the bodies mentioned in the following table in relation to the provision under which the order is to be made, varied or revoked:

TABLE

Provision of subsection (1) Consultee

Paragraph (a) or (b) The Financial Services Authority

Paragraph (d) The Charity Commissioners

Paragraph (e), (f) or (ff) Any Minister of the Crown with responsibilities in relation to the body in question

Paragraph (g) or (h) The Treasury and the Financial Services Authority

(4) An order under subsection (1) relating to a body may be limited so as to apply only to agreements by that body of a description specified in the order.

(5) The Secretary of State may by order provide that this Act shall not regulate other consumer credit agreements where—

(a) the number of payments to be made by the debtor does not exceed the number specified for that purpose in the order, or

(b) the rate of the total charge for credit does not exceed the rate so specified, or

(6) The Secretary of State may by order provide that this Act shall not regulate consumer hire agreements of a description specified in the order where—

(a) the owner is a body corporate authorised by or under any enactment to supply electricity, gas or water, and

(b) the subject of the agreement is a meter or metering equipment,

or where the owner is a public telecommunications operator specified in the order.

(6A) This Act does not regulate a consumer credit agreement where the creditor is a housing authority and the agreement is secured by a land mortgage of a dwelling.

(6B) In subsection (6A) “housing authority” means—

(a) as regards England and Wales, the Housing Corporation. . . and an authority or body within section 80(1) of the Housing Act 1985 (the landlord condition for secure tenancies), other than a housing association or a housing trust which is a charity;

(b) as regards Scotland, a development corporation established under an order made, or having effect as if made under the New Towns (Scotland) Act 1968, the Scottish Special Housing Association or the Housing Corporation;

(6C) This Act does not regulate a consumer credit agreement if—

(a) it is secured by a land mortgage; and

(b) entering into that agreement as lender is a regulated activity for the purposes of the Financial Services and Markets Act 2000.

(6D) But section 126, and any other provision so far as it relates to section 126, applies to an agreement which would (but for subsection (6C)) be a regulated agreement.

(6E) Subsection (6C) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000 (regulated activities: power to specify classes of activity and categories of investment);

(b) any order for the time being in force under that section; and

(7) Nothing in this section affects the application of sections 137 to 140 (extortionate credit bargains).

(8) In the application of this section to Scotland, subsection (3A) shall have effect as if the reference to the Charity Commissioners were a reference to the Lord Advocate.

(9) In the application of this section to Northern Ireland subsection (3A) shall have effect as if any reference to a Minister of the Crown were a reference to a Northern Ireland department, . . . and any reference to the Charity Commissioners were a reference to the Department of Finance for Northern Ireland.

(10) In this section—

(a) “deposit-taker” means—

(i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits,

(ii) an EEA firm of the kind mentioned in paragraph 5(b) of Schedule 3 to that Act which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to accept deposits,

(iii) any wholly owned subsidiary (within the meaning of the Companies Act 1985) of a person mentioned in sub-paragraph (i), or

(iv) any undertaking which, in relation to a person mentioned in sub-paragraph (ii), is a subsidiary undertaking within the meaning of any rule of law in force in the EEA State in question for purposes connected with the implementation of the European Council Seventh Company Law Directive of 13 June 1983 on consolidated accounts (No 83/349/EEC), and which has no members other than that person;

(b) “insurer” means—

(i) a person who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, or

(ii) an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act, which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to effect or carry out contracts of insurance,

but does not include a friendly society or an organisation of workers or of employers.

(11) Subsection (10) must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

17 Small agreements

(1) A small agreement is—

(a) a regulated consumer credit agreement for credit not exceeding £50, other than a hire-purchase or conditional sale agreement; or

(b) a regulated consumer hire agreement which does not require the hirer to make payments exceeding £50 ,

being an agreement which is either unsecured or secured by a guarantee or indemnity only (whether or not the guarantee or indemnity is itself secured).

(2) Section 10(3)(a) applies for the purposes of subsection (1) as it applies for the purposes of section 8(2).

(3) Where—

(a) two or more small agreements are made at or about the same time between the same parties, and

(b) it appears probable that they would instead have been made as a single agreement but for the desire to avoid the operation of provisions of this Act which would have applied to that single agreement but, apart from this subsection, are not applicable to the small agreements,

this Act applies to the small agreements as if they were regulated agreements other than small agreements.

(4) If, apart from this subsection, subsection (3) does not apply to any agreements but would apply if, for any party or parties to any of the agreements, there were substituted an associate of that party, or associates of each of those parties, as the case may be, then subsection (3) shall apply to the agreements.

18 Multiple agreements

(1) This section applies to an agreement (a “multiple agreement”) if its terms are such as—

(a) to place a part of it within one category of agreement mentioned in this Act, and another part of it within a different category of agreements so mentioned, or within a category of agreement not so mentioned, or

(b) to place it, or a part of it, within two or more categories of agreement so mentioned.

(2) Where a part of an agreement falls within subsection (1), that part shall be treated for the purposes of this Act as a separate agreement.

(3) Where an agreement falls within subsection (1)(b), it shall be treated as an agreement in each of the categories in question, and this Act shall apply to it accordingly.

(4) Where under subsection (2) a part of a multiple agreement is to be treated as a separate agreement, the multiple agreement shall (with any necessary modifications) be construed accordingly; and any sum payable under the multiple agreement, if not apportioned by the parties, shall for the purposes of proceedings in any court relating to the multiple agreement be apportioned by the court as may be requisite.

(5) In the case of an agreement for running-account credit, a term of the agreement allowing the credit limit to be exceeded merely temporarily shall not be treated as a separate agreement or as providing fixed-sum credit in respect of the excess.

(6) This Act does not apply to a multiple agreement so far as the agreement relates to goods if under the agreement payments are to be made in respect of the goods in the form of rent (other than a rent-charge) issuing out of land.

19 Linked transactions

(1) A transaction entered into by the debtor or hirer, or a relative of his, with any other person (“the other party”), except one for the provision of security, is a linked transaction in relation to an actual or prospective regulated agreement (the “principal agreement”) of which it does not form part if—

(a) the transaction is entered into in compliance with a term of the principal agreement; or

(b) the principal agreement is a debtor-creditor-supplier agreement and the transaction is financed, or to be financed, by the principal agreement; or

(c) the other party is a person mentioned in subsection (2), and a person so mentioned initiated the transaction by suggesting it to the debtor or hirer, or his relative, who enters into it—

(i) to induce the creditor or owner to enter into the principal agreement, or

(ii) for another purpose related to the principal agreement, or

(iii) where the principal agreement is a restricted-use credit agreement, for a purpose related to a transaction financed, or to be financed, by the principal agreement.

(2) The persons referred to in subsection (1)(c) are—

(a) the creditor or owner, or his associate;

(b) a person who, in the negotiation of the transaction, is represented by a credit-broker who is also a negotiator in antecedent negotiations for the principal agreement;

(c) a person who, at the time the transaction is initiated, knows that the principal agreement has been made or contemplates that it might be made.

(3) A linked transaction entered into before the making of the principal agreement has no effect until such time (if any) as that agreement is made.

(4) Regulations may exclude linked transactions of the prescribed description from the operation of subsection (3).

20 Total charge for credit

(1) The Secretary of State shall make regulations containing such provisions as appear to him appropriate for determining the true cost to the debtor of the credit provided or to be provided under an actual or prospective consumer credit agreement (the “total charge for credit”), and regulations so made shall prescribe—

(a) what items are to be treated as entering into the total charge for credit, and how their amount is to be ascertained;

(b) the method of calculating the rate of the total charge for credit.

(2) Regulations under subsection (1) may provide for the whole or part of the amount payable by the debtor or his relative under any linked transaction to be included in the total charge for credit, whether or not the creditor is a party to the transaction or derives benefit from it.

Part III

Licensing of Credit and Hire Businesses

Licensing principles

21 Businesses needing a licence

(1) Subject to this section, a licence is required to carry on a consumer credit business or consumer hire business.

(2) A local authority does not need a licence to carry on a business.

(3) A body corporate empowered by a public general Act naming it to carry on a business does not need a licence to do so.

22 Standard and group licences

(1) A licence may be—

(a) a standard licence, that is a licence, issued by the Director to a person named in the licence on an application made by him, which, during the prescribed period, covers such activities as are described in the licence, or

(b) a group licence, that is a licence, issued by the Director (whether on the application of any person or of his own motion), which, during such period as the Director thinks fit or, if he thinks fit, indefinitely, covers such persons and activities as are described in the licence.

(2) A licence is not assignable or, subject to section 37, transmissible on death or in any other way.

(3) Except in the case of a partnership or an unincorporated body of persons, a standard licence shall not be issued to more than one person.

(4) A standard licence issued to a partnership or an unincorporated body of persons shall be issued in the name of the partnership or body.

(5) The Director may issue a group licence only if it appears to him that the public interest is better served by doing so than by obliging the persons concerned to apply separately for standard licences.

(6) The persons covered by a group licence may be described by general words, whether or not coupled with the exclusion of named persons, or in any other way the Director thinks fit.

(7) The fact that a person is covered by a group licence in respect of certain activities does not prevent a standard licence being issued to him in respect of those activities or any of them.

(8) A group licence issued on the application of any person shall be issued to that person, and general notice shall be given of the issue of any group licence (whether on application or not).

(9) Subsection (10) applies if a standard licence is issued to an EEA consumer credit firm.

(10) The activities described in the licence are not to include an activity for which the firm has, or could obtain, permission under paragraph 15 of Schedule 3 to the Financial Services and Markets Act 2000.

23 Authorisation of specific activities

(1) Subject to this section, a licence to carry on a business covers all lawful activities done in the course of that business, whether by the licensee or other persons on his behalf.

(2) A licence may limit the activities it covers, whether by authorising the licensee to enter into certain types of agreement only, or in any other way.

(3) A licence covers the canvassing off trade premises of debtor-creditor-supplier agreements or regulated consumer hire agreements only if, and to the extent that, the licence specifically so provides; and such provision shall not be included in a group licence.

(4) Regulations may be made specifying other activities which, if engaged in by or on behalf of the person carrying on a business, require to be covered by an express term in his licence.

24 Control of name of business

A standard licence authorises the licensee to carry on a business under the name or names specified in the licence, but not under any other name.

25 Licensee to be a fit person

(1) A standard licence shall be granted on the application of any person if he satisfies the Director that—

(a) he is a fit person to engage in activities covered by the licence, and

(b) the name or names under which he applies to be licensed is or are not misleading or otherwise undesirable.

(1A) The Director shall refuse an application for the grant of standard licence made by a consumer credit EEA firm if all of the activities described in the licence are activities for which the firm has permission, or could obtain permission, under paragraph 15 of Schedule 3 to the Financial Services and Markets Act 2000.

(1B) If an application for the grant of a standard licence—

(a) is made by a person with permission under Part 4 of the Financial Services and Markets Act 2000 to accept deposits, and

(b) relates to a listed activity,

the Financial Services Authority may, if it considers that the Director ought to refuse the application, notify him of that fact.

(1C) In subsection (1B) “listed activity” means an activity listed in Annex 1 to the banking consolidation directive (2000/1 2/EC) or in the Annex to the investment services directive (93/22/EEC) and references to deposits and to their acceptance must be read with—

(a) section 22 of the Financial Services and Markets Act 2000;

(b) any relevant order under that section; and

(2) In determining whether an applicant for a standard licence is a fit person to engage in any activities, the Director shall have regard to any circumstances appearing to him to be relevant, and in particular any evidence tending to show that the applicant, or any of the applicant’s employees, agents or associates (whether past or present) or, where the applicant is a body corporate, any person appearing to the Director to be a controller of the body corporate or an associate of any such person, has—

(a) committed any offence involving fraud or other dishonesty, or violence,

(b) contravened any provision made by or under this Act, or by or under any other enactment regulating the provision of credit to individuals or other transactions with individuals,

(bb) contravened any provision in force in an EEA State which corresponds to a provision of the kind mentioned in paragraph (b);

(c) practised discrimination on grounds of sex, colour, race or ethnic or national origins in, or in connection with, the carrying on of any business, or

(d) engaged in business practices appearing to the Director to be deceitful or oppressive, or otherwise unfair or improper (whether unlawful or not).

(3) In subsection (2), “associate”, in addition to the persons specified in section 184, includes a business associate.

26 Conduct of business

(1) Regulations may be made as to—

(a) the conduct by a licensee of his business; and

(b) the conduct by a consumer credit EEA firm of its business in the United Kingdom.

(2) The regulations may in particular specify—

(a) the books or other records to be kept by any person to whom the regulations apply;

(b) the information to be furnished by such a person to those persons with whom—

(i) that person does business, or

(ii) that person seeks to do business,

and the way in which that information is to be furnished.

Issue of licences

27 Determination of applications

(1) Unless the Director determines to issue a licence in accordance with an application he shall, before determining the application, by notice—

(a) inform the applicant, giving his reasons, that, as the case may be, he is minded to refuse the application, or to grant it in terms different from those applied for, describing them, and

(b) invite the applicant to submit to the Director representations in support of his application in accordance with section 34.

(2) If the Director grants the application in terms different from those applied for then, whether or not the applicant appeals, the Director shall issue the licence in the terms approved by him unless the applicant by notice informs him that he does not desire a licence in those terms.

28 Exclusion from group licence

Where the Director is minded to issue a group licence (whether on the application of any person or not), and in doing so to exclude any person from the group by name, he shall, before determining the matter,—

(a) give notice of that fact to the person proposed to be excluded, giving his reasons, and

(b) invite that person to submit to the Director representations against his exclusion in accordance with section 34.

Renewal, variation, suspension and revocation of licences

29 Renewal

(1) If the licensee under a standard licence, or the original applicant for, or any licensee under, a group licence of limited duration, wishes the Director to renew the licence, whether on the same terms (except as to expiry) or on varied terms, he must, during the period specified by the Director by general notice or such longer period as the Director may allow, make an application to the Director for its renewal.

(2) The Director may of his own motion renew any group licence.

(3) The preceding provisions of this Part apply to the renewal of a licence as they apply to the issue of a licence, except that section 28 does not apply to a person who was already excluded in the licence up for renewal.

(4) Until the determination of an application under subsection (1) and, where an appeal lies from the determination, until the end of the appeal period, the licence shall continue in force, notwithstanding that apart from this subsection it would expire earlier.

(5) On the refusal of an application under this section, the Director may give directions authorising a licensee to carry into effect agreements made by him before the expiry of the licence.

(6) General notice shall be given of the renewal of a group licence.

30 Variation by request

(1) On an application made by the licensee, the Director may if he thinks fit by notice to the licensee vary a standard licence in accordance with the application.

(2) In the case of a group licence issued on the application of any person, the Director, on an application made by that person, may if he thinks fit by notice to that person vary the terms of the licence in accordance with the application; but the Director shall not vary a group licence under this subsection by excluding a named person, other than the person making the request, unless that named person consents in writing to his exclusion.

(3) In the case of a group licence from which (whether by name or description) a person is excluded, the Director, on an application made by that person, may if he thinks fit, by notice to that person, vary the terms of the licence so as to remove the exclusion.

(4) Unless the Director determines to vary a licence in accordance with an application he shall, before determining the application, by notice—

(a) inform the applicant, giving his reasons, that he is minded to refuse the application, and

(b) invite the applicant to submit to the Director representations in support of his application in accordance with section 34.

(5) General notice shall be given that a variation of a group licence has been made under this section.

31 Compulsory variation

(1) Where at a time during the currency of a licence the Director is of the opinion that, if the licence had expired at that time, he would, on an application for its renewal or further renewal on the same terms (except as to expiry), have been minded to grant the application but on different terms, and that therefore the licence should be varied, he shall proceed as follows.

(2) In the case of a standard licence the Director shall, by notice—

(a) inform the licensee of the variations the Director is minded to make in the terms of the licence, stating his reasons, and

(b) invite him to submit to the Director representations as to the proposed variations in accordance with section 34.

(3) In the case of a group licence the Director shall—

(a) give general notice of the variations he is minded to make in the terms of the licence, stating his reasons, and

(b) in the notice invite any licensee to submit to him representations as to the proposed variations in accordance with section 34.

(4) In the case of a group licence issued on application the Director shall also—

(a) inform the original applicant of the variations the Director is minded to make in the terms of the licence, stating his reasons, and

(b) invite him to submit to the Director representations as to the proposed variations in accordance with section 34.

(5) If the Director is minded to vary a group licence by excluding any person (other than the original applicant) from the group by name the Director shall, in addition, take the like steps under section 28 as are required in the case mentioned in that section.

(6) General notice shall be given that a variation of any group licence has been made under this section.

(7) A variation under this section shall not take effect before the end of the appeal period.

32 Suspension and revocation

(1) Where at a time during the currency of a licence the Director is of the opinion that if the licence had expired at that time he would have been minded not to renew it, and that therefore it should be revoked or suspended, he shall proceed as follows.

(2) In the case of a standard licence the Director shall, by notice—

(a) inform the licensee that, as the case may be, the Director is minded to revoke the licence, or suspend it until a specified date or indefinitely, stating his reasons, and

(b) invite him to submit representations as to the proposed revocation or suspension in accordance with section 34.

(3) In the case of a group licence the Director shall—

(a) give general notice that, as the case may be, he is minded to revoke the licence, or suspend it until a specified date or indefinitely, stating his reasons, and

(b) in the notice invite any licensee to submit to him representations as to the proposed revocation or suspension in accordance with section 34.

(4) In the case of a group licence issued on application the Director shall also—

(a) inform the original applicant that, as the case may be, the Director is minded to revoke the licence, or suspend it until a specified date or indefinitely, stating his reasons, and

(b) invite him to submit representations as to the proposed revocation or suspension in accordance with section 34.

(5) If he revokes or suspends the licence, the Director may give directions authorising a licensee to carry into effect agreements made by him before the revocation or suspension.

(6) General notice shall be given of the revocation or suspension of a group licence.

(7) A revocation or suspension under this section shall not take effect before the end of the appeal period.

(8) Except for the purposes of section 29, a licensee under a suspended licence shall be treated, in respect of the period of suspension, as if the licence had not been issued; and where the suspension is not expressed to end on a specified date it may, if the Director thinks fit, be ended by notice given by him to the licensee or, in the case of a group licence, by general notice.

33 Application to end suspension

(1) On an application made by a licensee the Director may, if he thinks fit, by notice to the licensee end the suspension of a licence, whether the suspension was for a fixed or indefinite period.

(2) Unless the Director determines to end the suspension in accordance with the application he shall, before determining the application, by notice—

(a) inform the applicant, giving his reasons, that he is minded to refuse the application, and

(b) invite the applicant to submit to the Director representations in support of his application in accordance with section 34.

(3) General notice shall be given that a suspension of a group licence has been ended under this section.

(4) In the case of a group licence issued on application—

(a) the references in subsection (1) to a licensee include the original applicant;

(b) the Director shall inform the original applicant that a suspension of a group licence has been ended under this section.

Miscellaneous

34 Representations to Director

(1) Where this section applies to an invitation by the Director to any person to submit representations, the Director shall invite that person, within 21 days after the notice containing the invitation is given to him or published, or such longer period as the Director may allow,—

(a) to submit his representations in writing to the Director, and

(b) to give notice to the Director, if he thinks fit, that he wishes to make representations orally,

and where notice is given under paragraph (b) the Director shall arrange for the oral representations to be heard.

(2) In reaching his determination the Director shall take into account any representations submitted or made under this section.

(3) The Director shall give notice of his determination to the persons who were required to be invited to submit representations about it or, where the invitation to submit representations was required to be given by general notice, shall give general notice of the determination.

35 The register

(1) The Director shall establish and maintain a register, in which he shall cause to be kept particulars of—

(a) applications not yet determined for the issue, variation or renewal of licences, or for ending the suspension of a licence;

(b) licences which are in force, or have at any time been suspended or revoked, with details of any variation of the terms of a licence;

(d) such other matters (if any) as he thinks fit.

(1A) The Director shall also cause to be kept in the register any copy of any notice or other document relating to a consumer credit EEA firm which is given to the Director by the Financial Services Authority for inclusion in the register.

(2) The Director shall give general notice of the various matters required to be entered in the register, and of any change in them made under subsection (1)(d).

(3) Any person shall be entitled, on payment of the specified fee—

(a) to inspect the register during ordinary office hours and take copies of any entry, or

(b) to obtain from the Director a copy, certified by the Director to be correct, of any entry in the register.

(4) The Director may, if he thinks fit, determine that the right conferred by subsection (3)(a) shall be exercisable in relation to a copy of the register instead of, or in addition to, the original.

(5) The Director shall give general notice of the place or places where, and times when, the register or a copy of it may be inspected.

36 Duty to notify changes

(1) Within 21 working days after a change takes place in any particulars entered in the register in respect of a standard licence or the licensee under section 35(1)(d) (not being a change resulting from action taken by the Director), the licensee shall give the Director notice of the change; and the Director shall cause any necessary amendment to be made in the register.

(2) Within 21 working days after—

(a) any change takes place in the officers of—

(i) a body corporate, or an unincorporated body of persons, which is the licensee under a standard licence, or

(ii) a body corporate which is a controller of a body corporate which is such a licensee, or

(b) a body corporate which is such a licensee becomes aware that a person has become or ceased to be a controller of the body corporate, or

(c) any change takes place in the members of a partnership which is such a licensee (including a change on the amalgamation of the partnership with another firm, or a change whereby the number of partners is reduced to one),

the licensee shall give the Director notice of the change.

(3) Within 14 working days after any change takes place in the officers of a body corporate which is a controller of another body corporate which is a licensee under a standard licence, the controller shall give the licensee notice of the change.

(4) Within 14 working days after a person becomes or ceases to be a controller of a body corporate which is a licensee under a standard licence, that person shall give the licensee notice of the fact.

(5) Where a change in a partnership has the result that the business ceases be carried on under the name, or any of the names, specified in a standard licence the licence shall cease to have effect.

(6) Where the Director is given notice under subsection (1) or (2) of any change, and subsection (5) does not apply, the Director may by notice require the licensee to furnish him with such information, verified in such manner, as the Director may stipulate.

37 Death, bankruptcy etc of licensee

(1) A licence held by one individual terminates if he—

(a) dies, or

(b) is adjudged bankrupt, or

(2) In relation to a licence held by one individual, or a partnership or other unincorporated body of persons, or a body corporate, regulations may specify other events relating to the licensee on the occurrence of which the licence is to terminate.

(3) Regulations may—

(a) provide for the termination of a licence by subsection (1), or under subsection (2), to be deferred for a period not exceeding 12 months, and

(b) authorise the business of the licensee to be carried on under the licence by some other person during the period of deferment, subject to such conditions as may be prescribed.

(4) This section does not apply to group licences.

38 Application of s 37 to Scotland and Northern Ireland

(1) In the application of section 37 to Scotland the following shall be substituted for paragraphs (b) and (c) of subsection (1)—

"(b) has his estate sequestrated, or

(2) In the application of s 37 to Northern Ireland the following shall be substituted for subsection (1)—

“(1) A licence held by one individual terminates if—

(a) he dies, or

(b) he is adjudged bankrupt or his estate and effects vest in the official assignee under section 349 of the Irish Bankrupt and Insolvent Act 1857, or

(c) a declaration is made under section 15 of the Lunacy Regulation (Ireland) Act 1871 that he is of unsound mind and incapable of managing his person or property, or an order is made under section 68 of that Act in consequence of its being found that he is of unsound mind and incapable of managing his affairs.”.

39 Offences against Part III

(1) A person who engages in any activities for which a licence is required when he is not a licensee under a licence covering those activities commits an offence.

(2) A licensee under a standard licence who carries on business under a name not specified in the licence commits an offence.

(3) A person who fails to give the Director or a licensee notice under section 36 within the period required commits an offence.

40 Enforcement of agreements made by unlicensed trader

(1) A regulated agreement, other than a non-commercial agreement, if made when the creditor or owner was unlicensed, is enforceable against the debtor or hirer only where the Director has made an order under this section which applies to the agreement.

(2) Where during any period an unlicensed person (the “trader”) was carrying on a consumer credit business or consumer hire business, he or his successor in title may apply to the Director for an order that regulated agreements made by the trader during that period are to be treated as if he had been licensed.

(3) Unless the Director determines to make an order under subsection (2) in accordance with the application, he shall, before determining the application, by notice—

(a) inform the applicant, giving his reasons, that, as the case may be, he is minded to refuse the application, or to grant it in terms different from those applied for, describing them, and

(b) invite the applicant to submit to the Director representations in support of his application in accordance with section 34.

(4) In determining whether or not to make an order under subsection (2) in respect of any period the Director shall consider, in addition to any other relevant factors—

(a) how far, if at all, debtors or hirers under regulated agreements made by the trader during that period were prejudiced by the trader’s conduct,

(b) whether or not the Director would have been likely to grant a licence covering that period on an application by the trader, and

(5) If the Director thinks fit, he may in an order under subsection (2)—

(a) limit the order to specified agreements, or agreements of a specified description or made at a specified time;

(b) make the order conditional on the doing of specified acts by the applicant.

(6) This section does not apply to a regulated agreement, other than a non-commercial agreement, made by a consumer credit EEA firm unless at the time it was made that firm was precluded from entering into it as a result of

(a) a consumer credit prohibition imposed under section 203 of the Financial Services and Markets Act 2000; or

(b) a restriction imposed on the firm under section 204 of that Act.

41 Appeals to Secretary of State under Part III

(1) If, in the case of a determination by the Director such as is mentioned in column 1 of the table set out at the end of this section, a person mentioned in relation to that determination in column 2 of the table is aggrieved by the determination he may, within the prescribed period, and in the prescribed manner, appeal to the Secretary of State.

(2) Regulations may make provision as to the persons by whom (on behalf of the Secretary of State) appeals under this section are to be heard, the manner in which they are to be conducted, and any other matter connected with such appeals.

(3) On an appeal under this section, the Secretary of State may give such directions for disposing of the appeal as he thinks just, including a direction for the payment of costs by any party to the appeal.

(4) A direction under subsection (3) for payment of costs may be made a rule of the High Court on the application of the party in whose favour it is given.

(5) In Scotland a direction under subsection (3) for payment of expenses may be enforced in like manner as a recorded decree arbitral.

TABLE

Determination Appellant

Refusal to issue, renew or vary licence in accordance with terms of application. The applicant.

Exclusion of person from group licence. The person excluded.

Refusal to give directions in respect of a licensee under section 29(5) or 32(5). The licensee.

Compulsory variation, or suspension or revocation, of standard licence. The licensee.

Compulsory variation, or suspension or revocation, of group licence. The original applicant or any licensee.

Refusal to end suspension of licence in accordance with terms of application. The applicant.

Refusal to make order under section 40(2) in accordance with terms of application. The applicant.

Imposition of, or refusal to withdraw, consumer credit prohibition under

section 203 of the Financial Services and Markets Act 2000. The consumer credit EEA firm concerned.

Imposition of, or refusal to withdraw, a restriction under section 204 of the

Financial Services and Markets Act 2000. The consumer credit EEA firm concerned.

42 . . .

. . .

Part IV

Seeking Business

Advertising

43 Advertisements to which Part IV applies

(1) This Part applies to any advertisement, published for the purposes of a business carried on by the advertiser, indicating that he is willing—

(a) to provide credit, or

(b) to enter into an agreement for the bailment or (in Scotland) the hiring of goods by him.

(2) An advertisement does not fall within subsection (1) if the advertiser does not carry on—

(a) a consumer credit business or consumer hire business, or

(b) a business in the course of which he provides credit to individuals secured on land, or

(i) the law applicable to the agreement is the law of a country outside the United Kingdom, and

(ii) if the law applicable to the agreement were the law of a part of the United Kingdom it would be a regulated agreement.

(3) An advertisement does not fall within subsection (1)(a) if it indicates—

(a) that the credit must exceed £25,000, and that no security is required, or the security is to consist of property other than land, or

(b) that the credit is available only to a body corporate.

(3A) An advertisement does not fall within subsection (1)(a) in so far as it is a communication of an invitation or inducement to engage in investment activity within the meaning of section 21 of the Financial Services and Markets Act 2000, other than an exempt generic communication.

(3B) An “exempt generic communication” is a communication to which subsection (1) of section 21 of the Financial Services and Markets Act 2000 does not apply, as a result of an order under subsection (5) of that section, because it does not identify a person as providing an investment or as carrying on an activity to which the communication relates.

(4) An advertisement does not fall within subsection (1)(b) if it indicates that the advertiser is not willing to enter into a consumer hire agreement.

(5) The Secretary of State may by order provide that this Part shall not apply to other advertisements of a description specified in the order.

44 Form and content of advertisements

(1) The Secretary of State shall make regulations as to the form and content of advertisements to which this Part applies, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that, having regard to its subject-matter and the amount of detail included in it, an advertisement conveys a fair and reasonably comprehensive indication of the nature of the credit or hire facilities offered by the advertiser and of their true cost to persons using them.

(2) Regulations under subsection (1) may in particular—

(a) require specified information to be included in the prescribed manner in advertisements, and other specified material to be excluded;

(b) contain requirements to ensure that specified information is clearly brought to the attention of persons to whom advertisements are directed, and that one part of an advertisement is not given insufficient or excessive prominence compared with another.

45 Prohibition of advertisement where goods etc not sold for cash

If an advertisement to which this Part applies indicates that the advertiser is willing to provide credit under a restricted-use credit agreement relating to goods or services to be supplied by any person, but at the time when the advertisement is published that person is not holding himself out as prepared to sell the goods or provide the services (as the case may be) for cash, the advertiser commits an offence.

46 False or misleading advertisements

(1) If an advertisement to which this Part applies conveys information which in a material respect is false or misleading the advertiser commits an offence.

(2) Information stating or implying an intention on the advertiser’s part which he has not got is false.

47 Advertising infringements

(1) Where an advertiser commits an offence against regulations made under section 44 or against section 45 or 46, or would be taken to commit such an offence but for the defence provided by section 168, a like offence is committed by—

(a) the publisher of the advertisement, and

(b) any person who, in the course of a business carried on by him, devised the advertisement, or a part of it relevant to the first-mentioned offence, and

(2) In proceedings for an offence under subsection (1)(a) it is a defence for the person charged to prove that—

(a) the advertisement was published in the course of a business carried on by him, and

(b) he received the advertisement in the course of that business, and did not know and had no reason to suspect that its publication would be an offence under this Part.

Canvassing etc

48 Definition of canvassing off trade premises (regulated agreements)

(1) An individual (the “canvasser”) canvasses a regulated agreement off trade premises if he solicits the entry (as debtor or hirer) of another individual (the “consumer”) into the agreement by making oral representations to the consumer, or any other individual, during a visit by the canvasser to any place (not excluded by subsection (2)) where the consumer, or that other individual, as the case may be, is, being a visit—

(a) carried out for the purpose of making such oral representations to individuals who are at that place, but

(b) not carried out in response to a request made on a previous occasion.

(2) A place is excluded from subsection (1) if it is a place where a business is carried on (whether on a permanent or temporary basis) by—

(a) the creditor or owner, or

(b) a supplier, or

(d) the consumer.

49 Prohibition of canvassing debtor-creditor agreements off trade premises

(1) It is an offence to canvass debtor-creditor agreements off trade premises.

(2) It is also an offence to solicit the entry of an individual (as debtor) into a debtor-creditor agreement during a visit carried out in response to a request made on a previous occasion, where—

(a) the request was not in writing signed by or on behalf of the person making it, and

(b) if no request for the visit had been made, the soliciting would have constituted the canvassing of a debtor-creditor agreement off trade premises.

(3) Subsections (1) and (2) do not apply to any soliciting for an agreement enabling the debtor to overdraw on a current account of any description kept with the creditor, where—

(a) the Director has determined that current accounts of that description kept with the creditor are excluded from subsections (1) and (2), and

(b) the debtor already keeps an account with the creditor (whether a current account or not).

(4) A determination under subsection (3)(a)—

(a) may be made subject to such conditions as the Director thinks fit, and

(b) shall be made only where the Director is of opinion that it is not against the interests of debtors.

(5) If soliciting is done in breach of a condition imposed under subsection (4)(a), the determination under subsection (3)(a) does not apply to it.

50 Circulars to minors

(1) A person commits an offence who, with a view to financial gain, sends to a minor any document inviting him to—

(a) borrow money, or

(b) obtain goods on credit or hire, or

(d) apply for information or advice on borrowing money or otherwise obtaining credit, or hiring goods.

(2) In proceedings under subsection (1) in respect of the sending of a document to a minor, it is a defence for the person charged to prove that he did not know, and had no reasonable cause to suspect, that he was a minor.

(3) Where a document is received by a minor at any school or educational establishment for minors, a person sending it to him at that establishment knowing or suspecting it to be such an establishment shall be taken to have reasonable cause to suspect that he is a minor.

51 Prohibition of unsolicited credit-tokens

(1) It is an offence to give a person a credit-token if he has not asked for it.

(2) To comply with subsection (1) a request must be contained in a document signed by the person making the request, unless the credit-token agreement is a small debtor-creditor-supplier agreement.

(3) Subsection (1) does not apply to the giving of a credit-token to a person—

(a) for use under a credit-token agreement already made, or

(b) in renewal or replacement of a credit-token previously accepted by him under a credit-token agreement which continues in force, whether or not varied.

Miscellaneous

52 Quotations

(1) Regulations may be made—

(a) as to the form and content of any document (a “quotation”) by which a person who carries on a consumer credit business or consumer hire business, or a business in the course of which he provides credit to individuals secured on land, gives prospective customers information about the terms on which he is prepared to do business;

(b) requiring a person carrying on such a business to provide quotations to such persons and in such circumstances as are prescribed.

(2) Regulations under subsection (1)(a) may in particular contain provisions relating to quotations such as are set out in relation to advertisements in section 44.

(3) In this section, “quotation” does not include—

(a) any document which is a communication of an invitation or inducement to engage in investment activity within the meaning of section 21 of the Financial Services and Markets Act 2000; or

(b) any document (other than one falling within paragraph (a)) provided by an authorised person (within the meaning of that Act) in connection with an agreement which would or might be an exempt agreement as a result of section 16(6C).

53 Duty to display information

Regulations may require a person who carries on a consumer credit business or consumer hire business, or a business in the course of which he provides credit to individuals secured on land (other than credit provided under an agreement which is an exempt agreement as a result of section 16(6C)), to display in the prescribed manner, at any premises where the business is carried on to which the public have access, prescribed information about the business.

54 Conduct of business regulations

Without prejudice to the generality of section 26, regulations under that section may include provisions further regulating the seeking of business by a person to whom the regulations apply who carries on a consumer credit business or a consumer hire business.

Part V

Entry into Credit or Hire Agreements

Preliminary matters

55 Disclosure of information

(1) Regulations may require specified information to be disclosed in the prescribed manner to the debtor or hirer before a regulated agreement is made.

(2) A regulated agreement is not properly executed unless regulations under subsection (1) were complied with before the making of the agreement.

56 Antecedent negotiations

(1) In this Act “antecedent negotiations” means any negotiations with the debtor or hirer—

(a) conducted by the creditor or owner in relation to the making of any regulated agreement, or

(b) conducted by a credit-broker in relation to goods sold or proposed to be sold by the credit-broker to the creditor before forming the subject-matter of a debtor-creditor-supplier agreement within section 12(a), or

(c) conducted by the supplier in relation to a transaction financed or proposed to be financed by a debtor-creditor-supplier agreement within section 12(b) or (c),

and “negotiator” means the person by whom negotiations are so conducted with the debtor or hirer.

(2) Negotiations with the debtor in a case falling within subsection (1)(b) or (c) shall be deemed to be conducted by the negotiator in the capacity of agent of the creditor as well as in his actual capacity.

(3) An agreement is void if, and to the extent that, it purports in relation to an actual or prospective regulated agreement—

(a) to provide that a person acting as, or on behalf of, a negotiator is to be treated as the agent of the debtor or hirer, or

(b) to relieve a person from liability for acts or omissions of any person acting as, or on behalf of, a negotiator.

(4) For the purposes of this Act, antecedent negotiations shall be taken to begin when the negotiator and the debtor or hirer first enter into communication (including communication by advertisement), and to include any representations made by the negotiator to the debtor or hirer and any other dealings between them.

57 Withdrawal from prospective agreement

(1) The withdrawal of a party from a prospective regulated agreement shall operate to apply this Part to the agreement, any linked transaction and any other thing done in anticipation of the making of the agreement as it would apply if the agreement were made and then cancelled under section 69.

(2) The giving to a party of a written or oral notice which, however expressed, indicates the intention of the other party to withdraw from a prospective regulated agreement operates as a withdrawal from it.

(3) Each of the following shall be deemed to be the agent of the creditor or owner for the purpose of receiving a notice under subsection (2)—

(a) a credit-broker or supplier who is the negotiator in antecedent negotiations, and

(b) any person who, in the course of a business carried on by him, acts on behalf of the debtor or hirer in any negotiations for the agreement.

(4) Where the agreement, if made, would not be a cancellable agreement, subsection (1) shall nevertheless apply as if the contrary were the case.

58 Opportunity for withdrawal from prospective land mortgage

(1) Before sending to the debtor or hirer, for his signature, an unexecuted agreement in a case where the prospective regulated agreement is to be secured on land (the “mortgaged land”), the creditor or owner shall give the debtor or hirer a copy of the unexecuted agreement which contains a notice in the prescribed form indicating the right of the debtor or hirer to withdraw from the prospective agreement, and how and when the right is exercisable, together with a copy of any other document referred to in the unexecuted agreement.

(2) Subsection (1) does not apply to—

(a) a restricted-use credit agreement to finance the purchase of the mortgaged land, or

(b) an agreement for a bridging loan in connection with the purchase of the mortgaged land or other land.

59 Agreement to enter future agreement void

(1) An agreement is void if, and to the extent that, it purports to bind a person to enter as debtor or hirer into a prospective regulated agreement.

(2) Regulations may exclude from the operation of subsection (1) agreements such as are described in the regulations.

Making the agreement

60 Form and content of agreements

(1) The Secretary of State shall make regulations as to the form and content of documents embodying regulated agreements, and the regulations shall contain such provisions as appear to him appropriate with a view to ensuring that the debtor or hirer is made aware of—

(a) the rights and duties conferred or imposed on him by the agreement,

(b) the amount and rate of the total charge for credit (in the case of a consumer credit agreement),

(d) any other matters which, in the opinion of the Secretary of State, it is desirable for him to know about in connection with the agreement.

(2) Regulations under subsection (1) may in particular—

(a) require specified information to be included in the prescribed manner in documents, and other specified material to be excluded;

(b) contain requirements to ensure that specified information is clearly brought to the attention of the debtor or hirer, and that one part of a document is not given insufficient or excessive prominence compared with another.

(3) If, on an application made to the Director by a person carrying on a consumer credit business or a consumer hire business, it appears to the Director impracticable for the applicant to comply with any requirement of regulations under subsection (1) in a particular case, he may, by notice to the applicant, direct that the requirement be waived or varied in relation to such agreements, and subject to such conditions (if any), as he may specify, and this Act and the regulations shall have effect accordingly.

(4) The Director shall give a notice under subsection (3) only if he is satisfied that to do so would not prejudice the interests of debtors or hirers.

61 Signing of agreement

(1) A regulated agreement is not properly executed unless—

(a) a document in the prescribed form itself containing all the prescribed terms and conforming to regulations under section 60(1) is signed in the prescribed manner both by the debtor or hirer and by or on behalf of the creditor or owner, and

(b) the document embodies all the terms of the agreement, other than implied terms, and

(c) the document is, when presented or sent to the debtor or hirer for signature, in such a state that all its terms are readily legible.

(2) In addition, where the agreement is one to which section 58(1) applies, it is not properly executed unless—

(a) the requirements of section 58(1) were complied with, and

(b) the unexecuted agreement was sent, for his signature, to the debtor or hirer by post not less than seven days after a copy of it was given to him under section 58(1), and

(c) during the consideration period, the creditor or owner refrained from approaching the debtor or hirer (whether in person, by telephone or letter, or in any other way) except in response to a specific request made by the debtor or hirer after the beginning of the consideration period, and

(d) no notice of withdrawal by the debtor or hirer was received by the creditor or owner before the sending of the unexecuted agreement.

(3) In subsection (2)(c), “the consideration period” means the period beginning with the giving of the copy under section 58(1) and ending—

(a) at the expiry of seven days after the day on which the unexecuted agreement is sent, for his signature, to the debtor or hirer, or

(b) on its return by the debtor or hirer after signature by him,

whichever first occurs.

(4) Where the debtor or hirer is a partnership or an unincorporated body of persons, subsection (1)(a) shall apply with the substitution for “by the debtor or hirer” of “by or on behalf of the debtor or hirer”.

62 Duty to supply copy of unexecuted agreement

(1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, but on the occasion when he signs it the document does not become an executed agreement, a copy of it, and of any other document referred to in it, must be there and then delivered to him.

(2) If the unexecuted agreement is sent to the debtor or hirer for his signature, a copy of it, and of any other document referred to in it, must be sent to him at the same time.

(3) A regulated agreement is not properly executed if the requirements of this section are not observed.

63 Duty to supply copy of executed agreement

(1) If the unexecuted agreement is presented personally to the debtor or hirer for his signature, and on the occasion when he signs it the document becomes an executed agreement, a copy of the executed agreement, and of any other document referred to in it, must be there and then delivered to him.

(2) A copy of the executed agreement, and of any other document referred to in it, must be given to the debtor or hirer within the seven days following the making of the agreement unless—

(a) subsection (1) applies, or

(b) the unexecuted agreement was sent to the debtor or hirer for his signature and, on the occasion of his signing it, the document became an executed agreement.

(3) In the case of a cancellable agreement, a copy under subsection (2) must be sent by post.

(4) In the case of a credit-token agreement, a copy under subsection (2) need not be given within the seven days following the making of the agreement if it is given before or at the time when the credit-token is given to the debtor.

(5) A regulated agreement is not properly executed if the requirements of this section are not observed.

64 Duty to give notice of cancellation rights

(1) In the case of a cancellable agreement, a notice in the prescribed form indicating the right of the debtor or hirer to cancel the agreement, how and when that right is exercisable, and the name and address of a person to whom notice of cancellation may be given,—

(a) must be included in every copy given to the debtor or hirer under section 62 or 63, and

(b) except where section 63(2) applied, must also be sent by post to the debtor or hirer within the seven days following the making of the agreement.

(2) In the case of a credit-token agreement, a notice under subsection (1)(b) need not be sent by post within the seven days following the making of the agreement if either—

(a) it is sent by post to the debtor or hirer before the credit-token is given to him, or

(b) it is sent by post to him together with the credit-token.

(3) Regulations may provide that except where section 63(2) applied a notice sent under subsection (1)(b) shall be accompanied by a further copy of the executed agreement, and of any other document referred to in it.

(4) Regulations may provide that subsection (1)(b) is not to apply in the case of agreements such as are described in the regulations, being agreements made by a particular person, if—

(a) on an application by that person to the Director, the Director has determined that, having regard to—

(i) the manner in which antecedent negotiations for agreements with the applicant of that description are conducted, and

(ii) the information provided to debtors or hirers before such agreements are made,

the requirement imposed by subsection (1)(b) can be dispensed with without prejudicing the interests of debtors or hirers; and

(b) any conditions imposed by the Director in making the determination are complied with.

(5) A cancellable agreement is not properly executed if the requirements of this section are not observed.

65 Consequences of improper execution

(1) An improperly-executed regulated agreement is enforceable against the debtor or hirer on an order of the court only.

(2) A retaking of goods or land to which a regulated agreement relates is an enforcement of the agreement.

66 Acceptance of credit-tokens

(1) The debtor shall not be liable under a credit-token agreement for use made of the credit-token by any person unless the debtor had previously accepted the credit-token, or the use constituted an acceptance of it by him.

(2) The debtor accepts a credit-token when—

(a) it is signed, or

(b) a receipt for it is signed, or

either by the debtor himself or by a person who, pursuant to the agreement, is authorised by him to use it.

Cancellation of certain agreements within cooling-off period

67 Cancellable agreements

A regulated agreement may be cancelled by the debtor or hirer in accordance with this Part if the antecedent negotiations included oral representations made when in the presence of the debtor or hirer by an individual acting as, or on behalf of, the negotiator, unless—

(a) the agreement is secured on land, or is a restricted-use credit agreement to finance the purchase of land or is an agreement for a bridging loan in connection with the purchase of land, or

(b) the unexecuted agreement is signed by the debtor or hirer at premises at which any of the following is carrying on any business (whether on a permanent or temporary basis)—

(i) the creditor or owner;

(ii) any party to a linked transaction (other than the debtor or hirer or a relative of his);

(iii) the negotiator in any antecedent negotiations.

68 Cooling-off period

The debtor or hirer may serve notice of cancellation of a cancellable agreement between his signing of the unexecuted agreement and—

(a) the end of the fifth day following the day on which he received a copy under section 63(2) or a notice under section 64(1)(b), or

(b) if (by virtue of regulations made under section 64(4)) section 64(1)(b) does not apply, the end of the fourteenth day following the day on which he signed the unexecuted agreement.

69 Notice of cancellation

(1) If within the period specified in section 68 the debtor or hirer under a cancellable agreement serves on—

(a) the creditor or owner, or

(b) the person specified in the notice under section 64(1), or

a notice (a “notice of cancellation”) which, however expressed and whether or not conforming to the notice given under section 64(1), indicates the intention of the debtor or hirer to withdraw from the agreement, the notice shall operate—

(i) to cancel the agreement, and any linked transaction, and

(ii) to withdraw any offer by the debtor or hirer, or his relative, to enter into a linked transaction.

(2) In the case of a debtor-creditor-supplier agreement for restricted-use credit financing—

(a) the doing of work or supply of goods to meet an emergency, or

(b) the supply of goods which, before service of the notice of cancellation, had by the act of the debtor or his relative become incorporated in any land or thing not comprised in the agreement or any linked transaction,

subsection (1) shall apply with the substitution of the following for paragraph (i)—

“(i) to cancel only such provisions of the agreement and any linked transaction as—

(aa) relate to the provision of credit, or

(bb) require the debtor to pay an item in the total charge for credit, or

(cc) subject the debtor to any obligation other than to pay for the doing of the said work, or the supply of the said goods”.

(3) Except so far as is otherwise provided, references in this Act to the cancellation of an agreement or transaction do not include a case within subsection (2).

(4) Except as otherwise provided by or under this Act, an agreement or transaction cancelled under subsection (1) shall be treated as if it had never been entered into.

(5) Regulations may exclude linked transactions of the prescribed description from subsection (1)(i) or (ii).

(6) Each of the following shall be deemed to be the agent of the creditor or owner for the purpose of receiving a notice of cancellation—

(a) a credit-broker or supplier who is the negotiator in antecedent negotiations, and

(b) any person who, in the course of a business carried on by him, acts on behalf of the debtor or hirer in any negotiations for the agreement.

(7) Whether or not it is actually received by him, a notice of cancellation sent by post to a person shall be deemed to be served on him at the time of posting.

70 Cancellation: recovery of money paid by debtor or hirer

(1) On the cancellation of a regulated agreement, and of any linked transaction,—

(a) any sum paid by the debtor or hirer, or his relative, under or in contemplation of the agreement or transaction, including any item in the total charge for credit, shall become repayable, and

(b) any sum, including any item in the total charge for credit, which but for the cancellation is, or would or might become, payable by the debtor or hirer, or his relative, under the agreement or transaction shall cease to be, or shall not become, so payable, and

(c) in the case of a debtor-creditor-supplier agreement falling within section 12(b) any sum paid on the debtor’s behalf by the creditor to the supplier shall become repayable to the creditor.

(2) If, under the terms of a cancelled agreement or transaction, the debtor or hirer, or his relative, is in possession of any goods, he shall have a lien on them for any sum repayable to him under subsection (1) in respect of that agreement or transaction, or any other linked transaction.

(3) A sum repayable under subsection (1) is repayable by the person to whom it was originally paid, but in the case of a debtor-creditor-supplier agreement falling within section 12(b) the creditor and the supplier shall be under a joint and several liability to repay sums paid by the debtor, or his relative, under the agreement or under a linked transaction falling within section 19(1)(b) and accordingly, in such a case, the creditor shall be entitled, in accordance with rules of court, to have the supplier made a party to any proceedings brought against the creditor to recover any such sums.

(4) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (3), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

(5) Subsection (1) does not apply to any sum which, if not paid by a debtor, would be payable by virtue of section 71, and applies to a sum paid or payable by a debtor for the issue of a credit-token only where the credit-token has been returned to the creditor or surrendered to a supplier.

(6) If the total charge for credit includes an item in respect of a fee or commission charged by a credit-broker, the amount repayable under subsection (1) in respect of that item shall be the excess over £5 of the fee or commission.

(7) If the total charge for credit includes any sum payable or paid by the debtor to a credit-broker otherwise than in respect of a fee or commission charged by him, that sum shall for the purposes of subsection (6) be treated as if it were such a fee or commission.

(8) So far only as is necessary to give effect to section 69(2), this section applies to an agreement or transaction within that subsection as it applies to a cancelled agreement or transaction.

71 Cancellation: repayment of credit

(1) Notwithstanding the cancellation of a regulated consumer credit agreement, other than a debtor-creditor-supplier agreement for restricted-use credit, the agreement shall continue in force so far as it relates to repayment of credit and payment of interest.

(2) If, following the cancellation of a regulated consumer credit agreement, the debtor repays the whole or a portion of a credit—

(a) before the expiry of one month following service of the notice of cancellation, or

(b) in the case of a credit repayable by instalments, before the date on which the first instalment is due,

no interest shall be payable on the amount repaid.

(3) If the whole of a credit repayable by instalments is not repaid on or before the date specified in subsection (2) (b), the debtor shall not be liable to repay any of the credit except on receipt of a request in writing in the prescribed form, signed by or on behalf of the creditor, stating the amounts of the remaining instalments (recalculated by the creditor as nearly as may be in accordance with the agreement and without extending the repayment period), but excluding any sum other than principal and interest.

(4) Repayment of a credit, or payment of interest, under a cancelled agreement shall be treated as duly made if it is made to any person on whom, under section 69, a notice of cancellation could have been served, other than a person referred to in section 69(6)(b).

72 Cancellation: return of goods

(1) This section applies where any agreement or transaction relating to goods, being—

(a) a restricted-use debtor-creditor-supplier agreement, a consumer hire agreement, or a linked transaction to which the debtor or hirer under any regulated agreement is a party, or

(b) a linked transaction to which a relative of the debtor or hirer under any regulated agreement is a party,

is cancelled after the debtor or hirer (in a case within paragraph (a)) or the relative (in a case within paragraph (b)) has acquired possession of the goods by virtue of the agreement or transaction.

(2) In this section—

(a) “the possessor” means the person who has acquired possession of the goods as mentioned in subsection (1),

(b) “the other party” means the person from whom the possessor acquired possession, and

(c) “the pre-cancellation period” means the period beginning when the possessor acquired possession and ending with the cancellation.

(3) The possessor shall be treated as having been under a duty throughout the pre-cancellation period—

(a) to retain possession of the goods, and

(b) to take reasonable care of them.

(4) On the cancellation, the possessor shall be under a duty, subject to any lien, to restore the goods to the other party in accordance with this section, and meanwhile to retain possession of the goods and take reasonable care of them.

(5) The possessor shall not be under any duty to deliver the goods except at his own premises and in pursuance of a request in writing signed by or on behalf of the other party and served on the possessor either before, or at the time when, the goods are collected from those premises.

(6) If the possessor—

(a) delivers the goods (whether at his own premises or elsewhere) to any person on whom, under section 69, a notice of cancellation could have been served (other than a person referred to in section 69(6)(b)), or

(b) sends the goods at his own expense to such a person,

he shall be discharged from any duty to retain the goods or deliver them to any person.

(7) Where the possessor delivers the goods as mentioned in subsection (6)(a) his obligation to take care of the goods shall cease; and if he sends the goods as mentioned in subsection (6)(b), he shall be under a duty to take reasonable care to see that they are received by the other party and not damaged in transit, but in other respects his duty to take care of the goods shall cease.

(8) Where, at any time during the period of 21 days following the cancellation, the possessor receives such a request as is mentioned in subsection (5), and unreasonably refuses or unreasonably fails to comply with it, his duty to take reasonable care of the goods shall continue until he delivers or sends the goods as mentioned in subsection (6), but if within that period he does not receive such a request his duty to take reasonable care of the goods shall cease at the end of that period.

(9) The preceding provisions of this section do not apply to—

(a) perishable goods, or

(b) goods which by their nature are consumed by use and which, before the cancellation, were so consumed, or

(d) goods which, before the cancellation, had become incorporated in any land or thing not comprised in the cancelled agreement or a linked transaction.

(10) Where the address of the possessor is specified in the executed agreement, references in this section to his own premises are to that address and no other.

(11) Breach of a duty imposed by this section is actionable as a breach of statutory duty.

73 Cancellation: goods given in part-exchange

(1) This section applies on the cancellation of a regulated agreement where, in antecedent negotiations, the negotiator agreed to take goods in part-exchange (the “part-exchange goods”) and those goods have been delivered to him.

(2) Unless, before the end of the period of ten days beginning with the date of cancellation, the part-exchange goods are returned to the debtor or hirer in a condition substantially as good as when they were delivered to the negotiator, the debtor or hirer shall be entitled to recover from the negotiator a sum equal to the part-exchange allowance (as defined in subsection (7)(b)).

(3) In the case of a debtor-creditor-supplier agreement within section 12(b), the negotiator and the creditor shall be under a joint and several liability to pay to the debtor a sum recoverable under subsection (2).

(4) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the negotiator for loss suffered by the creditor in satisfying his liability under subsection (3), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

(5) During the period of ten days beginning with the date of cancellation, the debtor or hirer, if he is in possession of goods to which the cancelled agreement relates, shall have a lien on them for—

(a) delivery of the part-exchange goods, in a condition substantially as good as when they were delivered to the negotiator, or

(b) a sum equal to the part-exchange allowance;

and if the lien continues to the end of that period it shall thereafter subsist only as a lien for a sum equal to the part-exchange allowance.

(6) Where the debtor or hirer recovers from the negotiator or creditor, or both of them jointly, a sum equal to the part-exchange allowance, then, if the title of the debtor or hirer to the part-exchange goods has not vested in the negotiator, it shall so vest on the recovery of that sum.

(7) For the purposes of this section—

(a) the negotiator shall be treated as having agreed to take goods in part-exchange if, in pursuance of the antecedent negotiations, he either purchased or agreed to purchase those goods or accepted or agreed to accept them as part of the consideration for the cancelled agreement, and

(b) the part-exchange allowance shall be the sum agreed as such in the antecedent negotiations or, if no such agreement was arrived at, such sum as it would have been reasonable to allow in respect of the part-exchange goods if no notice of cancellation had been served.

(8) In an action brought against the creditor for a sum recoverable under subsection (2), he shall be entitled, in accordance with rules of court, to have the negotiator made a party to the proceedings.

Exclusion of certain agreements from Part V

74 Exclusion of certain agreements from Part V

(1) This Part (except section 56) does not apply to—

(a) a non-commercial agreement, or

(b) a debtor-creditor agreement enabling the debtor to overdraw on a current account, or

(c) a debtor-creditor agreement to finance the making of such payments arising on, or connected with, the death of a person as may be prescribed.

(2) This Part (except sections 55 and 56) does not apply to a small debtor-creditor-supplier agreement for restricted-use credit.

(2A) In the case of an agreement to which the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987 apply the reference in subsection (2) to a small agreement shall be construed as if in section 17(1)(a) and (b) “£35” were substituted for “£50”.

(3) Subsection (1)(b) or (c) applies only where the Director so determines, and such a determination—

(a) may be made subject to such conditions as the Director thinks fit, and

(b) shall be made only if the Director is of opinion that it is not against the interests of debtors.

(3A) Notwithstanding anything in subsection (3)(b) above, in relation to a debtor-creditor agreement under which the creditor is the Bank of England or a bank within the meaning of the Bankers’ Books Evidence Act 1879, the Director shall make a determination that subsection (1)(b) above applies unless he considers that it would be against the public interest to do so.

(4) If any term of an agreement falling within subsection (1)(c) or (2) is expressed in writing, regulations under section 60(1) shall apply to that term (subject to section 60(3)) as if the agreement was a regulated agreement not falling within subsection (1)(c) or (2).

Part VI

Matters Arising During Currency of Credit or Hire Agreements

75 Liability of creditor for breaches by supplier

(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

(3) Subsection (1) does not apply to a claim—

(a) under a non-commercial agreement, or

(b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000.

(4) This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit or otherwise contravened any term of the agreement.

(5) In an action brought against the creditor under subsection (1) he shall be entitled, in accordance with rules of court, to have the supplier made a party to the proceedings.

76 Duty to give notice before taking certain action

(1) The creditor or owner is not entitled to enforce a term of a regulated agreement by—

(a) demanding earlier payment of any sum, or

(b) recovering possession of any goods or land, or

except by or after giving the debtor or hirer not less than seven days’ notice of intention to do so.

(2) Subsection (1) applies only where—

(a) a period for the duration of the agreement is specified in the agreement, and

(b) that period has not ended when the creditor or owner does an act mentioned in subsection (1),

but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.

(3) A notice under subsection (1) is ineffective if not in the prescribed form.

(4) Subsection (1) does not prevent a creditor from treating the right to draw on any credit as restricted or deferred and taking such steps as may be necessary to make the restriction or deferment effective.

(5) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

(6) Subsection (1) does not apply to a right of enforcement arising by reason of any breach by the debtor or hirer of the regulated agreement.

77 Duty to give information to debtor under fixed-sum credit agreement

(1) The creditor under a regulated agreement for fixed-sum credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

(a) the total sum paid under the agreement by the debtor;

(b) the total sum which has become payable under the agreement by the debtor but remains unpaid, and the various amounts comprised in that total sum, with the date when each became due; and

(c) the total sum which is to become payable under the agreement by the debtor, and the various amounts comprised in that total sum, with the date, or mode of determining the date, when each becomes due.

(2) If the creditor possesses insufficient information to enable him to ascertain the amounts and dates mentioned in subsection (1)(c), he shall be taken to comply with that paragraph if his statement under subsection (1) gives the basis on which, under the regulated agreement, they would fall to be ascertained.

(3) Subsection (1) does not apply to—

(a) an agreement under which no sum is, or will or may become, payable by the debtor, or

(b) a request made less than one month after a previous request under that subsection relating to the same agreement was complied with.

(4) If the creditor under an agreement fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement; and

(b) if the default continues for one month he commits an offence.

(5) This section does not apply to a non-commercial agreement.

78 Duty to give information to debtor under running-account credit agreement

(1) The creditor under a regulated agreement for running-account credit, within the prescribed period after receiving a request in writing to that effect from the debtor and payment of a fee of £1, shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it, together with a statement signed by or on behalf of the creditor showing, according to the information to which it is practicable for him to refer,—

(a) the state of the account, and

(b) the amount, if any, currently payable under the agreement by the debtor to the creditor, and

(c) the amounts and due dates of any payments which, if the debtor does not draw further on the account, will later become payable under the agreement by the debtor to the creditor.

(3) Subsection (1) does not apply to—

(a) an agreement under which no sum is, or will or may become, payable by the debtor, or

(b) a request made less than one month after a previous request under that subsection relating to the same agreement was complied with.

(4) Where running-account credit is provided under a regulated agreement, the creditor shall give the debtor statements in the prescribed form, and with the prescribed contents—

(a) showing according to the information to which it is practicable for him to refer, the state of the account at regular intervals of not more than twelve months, and

(b) where the agreement provides, in relation to specified periods, for the making of payments by the debtor, or the charging against him of interest or any other sum, showing according to the information to which it is practicable for him to refer the state of the account at the end of each of those periods during which there is any movement in the account.

(5) A statement under subsection (4) shall be given within the prescribed period after the end of the period to which the statement relates.

(6) If the creditor under an agreement fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement; and

(b) if the default continues for one month he commits an offence.

(7) This section does not apply to a non-commercial agreement, and subsections (4) and (5) do not apply to a small agreement.

79 Duty to give hirer information

(1) The owner under a regulated consumer hire agreement, within the prescribed period after receiving a request in writing to that effect from the hirer and payment of a fee of £1 , shall give to the hirer a copy of the executed agreement and of any other document referred to in it, together with a statement signed by or on behalf of the owner showing, according to the information to which it is practicable for him to refer, the total sum which has become payable under the agreement by the hirer but remains unpaid and the various amounts comprised in that total sum, with the date when each became due.

(2) Subsection (1) does not apply to—

(a) an agreement under which no sum is, or will or may become, payable by the hirer, or

(b) a request made less than one month after a previous request under that subsection relating to the same agreement was complied with.

(3) If the owner under an agreement fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement; and

(b) if the default continues for one month he commits an offence.

(4) This section does not apply to a non-commercial agreement.

80 Debtor or hirer to give information about goods

(1) Where a regulated agreement, other than a non-commercial agreement, requires the debtor or hirer to keep goods to which the agreement relates in his possession or control, he shall, within seven working days after he has received a request in writing to that effect from the creditor or owner, tell the creditor or owner where the goods are.

(2) If the debtor or hirer fails to comply with subsection (1), and the default continues for 14 days, he commits an offence.

81 Appropriation of payments

(1) Where a debtor or hirer is liable to make to the same person payments in respect of two or more regulated agreements, he shall be entitled, on making any payment in respect of the agreements which is not sufficient to discharge the total amount then due under all the agreements, to appropriate the sum so paid by him—

(a) in or towards the satisfaction of the sum due under any one of the agreements, or

(b) in or towards the satisfaction of the sums due under any two or more of the agreements in such proportions as he thinks fit.

(2) If the debtor or hirer fails to make any such appropriation where one or more of the agreements is—

(a) a hire-purchase agreement or conditional sale agreement, or

(b) a consumer hire agreement, or

the payment shall be appropriated towards the satisfaction of the sums due under the several agreements respectively in the proportions which those sums bear to one another.

82 Variation of agreements

(1) Where, under a power contained in a regulated agreement, the creditor or owner varies the agreement, the variation shall not take effect before notice of it is given to the debtor or hirer in the prescribed manner.

(2) Where an agreement (a “modifying agreement”) varies or supplements an earlier agreement, the modifying agreement shall for the purposes of this Act be treated as—

(a) revoking the earlier agreement, and

(b) containing provisions reproducing the combined effect of the two agreements,

and obligations outstanding in relation to the earlier agreement shall accordingly be treated as outstanding instead in relation to the modifying agreement.

(3) If the earlier agreement is a regulated agreement but (apart from this subsection) the modifying agreement is not then, unless the modifying agreement is for running account credit, it shall be treated as a regulated agreement.

(4) If the earlier agreement is a regulated agreement for running-account credit, and by the modifying agreement the creditor allows the credit limit to be exceeded but intends the excess to be merely temporary, Part V (except section 56) shall not apply to the modifying agreement.

(5) If—

(a) the earlier agreement is a cancellable agreement, and

(b) the modifying agreement is made within the period applicable under section 68 to the earlier agreement,

then, whether or not the modifying agreement would, apart from this subsection, be a cancellable agreement, it shall be treated as a cancellable agreement in respect of which a notice may be served under section 68 not later than the end of the period applicable under that section to the earlier agreement.

(6) Except under subsection (5), a modifying agreement shall not be treated as a cancellable agreement.

(7) This section does not apply to a non-commercial agreement.

83 Liability for misuse of credit facilities

(1) The debtor under a regulated consumer credit agreement shall not be liable to the creditor for any loss arising from use of the credit facility by another person not acting, or to be treated as acting, as the debtor’s agent.

(2) This section does not apply to a non-commercial agreement, or to any loss in so far as it arises from misuse of an instrument to which section 4 of the Cheques Act 1957 applies.

84 Misuse of credit-tokens

(1) Section 83 does not prevent the debtor under a credit-token agreement from being made liable to the extent of £50 (or the credit limit if lower) for loss to the creditor arising from use of the credit-token by other persons during a period beginning when the credit-token ceases to be in the possession of any authorised person and ending when the credit-token is once more in the possession of an authorised person.

(2) Section 83 does not prevent the debtor under a credit-token agreement from being made liable to any extent for loss to the creditor from use of the credit-token by a person who acquired possession of it with the debtor’s consent.

(3) Subsections (1) and (2) shall not apply to any use of the credit-token after the creditor has been given oral or written notice that it is lost or stolen, or is for any other reason liable to misuse.

(3A) Subsections (1) and (2) shall not apply to any use, in connection with a distance contract (other than an excepted contract), of a card which is a credit-token.

(3B) In subsection (3A), “distance contract” and “excepted contract” have the meanings given in the Consumer Protection (Distance Selling) Regulations 2000.

(4) Subsections (1) and (2) shall not apply unless there are contained in the credit-token agreement in the prescribed manner particulars of the name, address and telephone number of a person stated to be the person to whom notice is to be given under subsection (3).

(5) Notice under subsection (3) takes effect when received, but where it is given orally, and the agreement so requires, it shall be treated as not taking effect if not confirmed in writing within seven days.

(6) Any sum paid by the debtor for the issue of the credit-token, to the extent (if any) that it has not been previously offset by use made of the credit token, shall be treated as paid towards satisfaction of any liability under subsection (1) or (2).

(7) The debtor, the creditor, and any person authorised by the debtor to use the credit-token, shall be authorised persons for the purposes of subsection (1).

(8) Where two or more credit-tokens are given under one credit-token agreement, the preceding provisions of this section apply to each credit-token separately.

85 Duty on issue of new credit-tokens

(1) Whenever, in connection with a credit-token agreement, a credit-token (other than the first) is given by the creditor to the debtor, the creditor shall give the debtor a copy of the executed agreement (if any) and of any other document referred to in it.

(2) If the creditor fails to comply with this section—

(a) he is not entitled, while the default continues, to enforce the agreement; and

(b) if the default continues for one month he commits an offence.

(3) This section does not apply to a small agreement.

86 Death of debtor or hirer

(1) The creditor or owner under a regulated agreement is not entitled, by reason of the death of the debtor or hirer, to do an act specified in paragraphs (a) to (e) of section 87(1) if at the death the agreement is fully secured.

(2) If at the death of the debtor or hirer a regulated agreement is only partly secured or is unsecured, the creditor or owner is entitled, by reason of the death of the debtor or hirer, to do an act specified in paragraphs (a) to (e) of section 87(1) on an order of the court only.

(3) This section applies in relation to the termination of an agreement only where—

(a) a period for its duration is specified in the agreement, and

(b) that period has not ended when the creditor or owner purports to terminate the agreement,

but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.

(4) This section does not prevent the creditor from treating the right to draw on any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(5) This section does not affect the operation of any agreement providing for payment of sums—

(a) due under the regulated agreement, or

(b) becoming due under it on the death of the debtor or hirer,

out of the proceeds of a policy of assurance on his life.

(6) For the purposes of this section an act is done by reason of the death of the debtor or hirer if it is done under a power conferred by the agreement which is—

(a) exercisable on his death, or

(b) exercisable at will and exercised at any time after his death.

Part VII

Default and Termination

Default notices

87 Need for default notice

(1) Service of a notice on the debtor or hirer in accordance with section 88 (a “default notice”) is necessary before the creditor or owner can become entitled, by reason of any breach by the debtor or hirer of a regulated agreement,—

(a) to terminate the agreement, or

(b) to demand earlier payment of any sum, or

(d) to treat any right conferred on the debtor or hirer by the agreement as terminated, restricted or deferred, or

(e) to enforce any security.

(2) Subsection (1) does not prevent the creditor from treating the right to draw upon any credit as restricted or deferred, and taking such steps as may be necessary to make the restriction or deferment effective.

(3) The doing of an act by which a floating charge becomes fixed is not enforcement of a security.

(4) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

88 Contents and effect of default notice

(1) The default notice must be in the prescribed form and specify—

(a) the nature of the alleged breach;

(b) if the breach is capable of remedy, what action is required to remedy it and the date before which that action is to be taken;

(c) if the breach is not capable of remedy, the sum (if any) required to be paid as compensation for the breach, and the date before which it is to be paid.

(2) A date specified under subsection (1) must not be less than seven days after the date of service of the default notice, and the creditor or owner shall not take action such as is mentioned in section 87(1) before the date so specified or (if no requirement is made under subsection (1)) before those seven days have elapsed.

(3) The default notice must not treat as a breach failure to comply with a provision of the agreement which becomes operative only on breach of some other provision, but if the breach of that other provision is not duly remedied or compensation demanded under subsection (1) is not duly paid, or (where no requirement is made under subsection (1)) if the seven days mentioned in subsection (2) have elapsed, the creditor or owner may treat the failure as a breach and section 87(1) shall not apply to it.

(4) The default notice must contain information in the prescribed terms about the consequences of failure to comply with it.

(5) A default notice making a requirement under subsection (1) may include a provision for the taking of action such as is mentioned in section 87(1) at any time after the restriction imposed by subsection (2) will cease, together with a statement that the provision will be ineffective if the breach is duly remedied or the compensation duly paid.

89 Compliance with default notice

If before the date specified for that purpose in the default notice the debtor or hirer takes the action specified under section 88(1)(b) or (c) the breach shall be treated as not having occurred.

Further restriction of remedies for default

90 Retaking of protected hire-purchase etc goods

(1) At any time when—

(a) the debtor is in breach of a regulated hire-purchase or a regulated conditional sale agreement relating to goods, and

(b) the debtor has paid to the creditor one-third or more of the total price of the goods, and

the creditor is not entitled to recover possession of the goods from the debtor except on an order of the court.

(2) Where under a hire-purchase or conditional sale agreement the creditor is required to carry out any installation and the agreement specifies, as part of the total price, the amount to be paid in respect of the installation (the “installation charge”) the reference in subsection (1)(b) to one third of the total price shall be construed as a reference to the aggregate of the installation charge and one third of the remainder of the total price.

(3) In a case where—

(a) subsection (1)(a) is satisfied, but not subsection (1)(b), and

(b) subsection (1)(b) was satisfied on a previous occasion in relation to an earlier agreement, being a regulated hire-purchase or regulated conditional sale agreement, between the same parties, and relating to any of the goods comprised in the later agreement (whether or not other goods were also included),

subsection (1) shall apply to the later agreement with the omission of paragraph (b).

(4) If the later agreement is a modifying agreement, subsection (3) shall apply with the substitution, for the second reference to the later agreement, of a reference to the modifying agreement.

(5) Subsection (1) shall not apply, or shall cease to apply, to an agreement if the debtor has terminated, or terminates, the agreement.

(6) Where subsection (1) applies to an agreement at the death of the debtor, it shall continue to apply (in relation to the possessor of the goods) until the grant of probate or administration, or (in Scotland) confirmation (on which the personal representative would fall to be treated as the debtor).

(7) Goods falling within this section are in this Act referred to as “protected goods”.

91 Consequences of breach of s 90

If goods are recovered by the creditor in contravention of section 90—

(a) the regulated agreement, if not previously terminated, shall terminate, and

(b) the debtor shall be released from all liability under the agreement, and shall be entitled to recover from the creditor all sums paid by the debtor under the agreement.

92 Recovery of possession of goods or land

(1) Except under an order of the court, the creditor or owner shall not be entitled to enter any premises to take possession of goods subject to a regulated hire-purchase agreement, regulated conditional sale agreement or regulated consumer hire agreement.

(2) At any time when the debtor is in breach of a regulated conditional sale agreement relating to land, the creditor is entitled to recover possession of the land from the debtor, or any person claiming under him, on an order of the court only.

(3) An entry in contravention of subsection (1) or (2) is actionable as a breach of statutory duty.

93 Interest not to be increased on default

The debtor under a regulated consumer credit agreement shall not be obliged to pay interest on sums which, in breach of the agreement, are unpaid by him at a rate—

(a) where the total charge for credit includes an item in respect of interest, exceeding the rate of that interest, or

(b) in any other case, exceeding what would be the rate of the total charge for credit if any items included in the total charge for credit by virtue of section 20(2) were disregarded.

Early payment by debtor

94 Right to complete payments ahead of time

(1) The debtor under a regulated consumer credit agreement is entitled at any time, by notice to the creditor and the payment to the creditor of all amounts payable by the debtor to him under the agreement (less any rebate allowable under section 95), to discharge the debtor’s indebtedness under the agreement.

(2) A notice under subsection (1) may embody the exercise by the debtor of any option to purchase goods conferred on him by the agreement, and deal with any other matter arising on, or in relation to, the termination of the agreement.

95 Rebate on early settlement

(1) Regulations may provide for the allowance of a rebate of charges for credit to the debtor under a regulated consumer credit agreement where, under section 94, on refinancing, on breach of the agreement, or for any other reason, his indebtedness is discharged or becomes payable before the time fixed by the agreement, or any sum becomes payable by him before the time so fixed.

(2) Regulations under subsection (1) may provide for calculation of the rebate by reference to any sums paid or payable by the debtor or his relative under or in connection with the agreement (whether to the creditor or some other person), including sums under linked transactions and other items in the total charge for credit.

96 Effect on linked transactions

(1) Where for any reason the indebtedness of the debtor under a regulated consumer credit agreement is discharged before the time fixed by the agreement, he, and any relative of his, shall at the same time be discharged from any liability under a linked transaction, other than a debt which has already become payable.

(2) Subsection (1) does not apply to a linked transaction which is itself an agreement providing the debtor or his relative with credit.

(3) Regulations may exclude linked transactions of the prescribed description from the operation of subsection (1).

97 Duty to give information

(1) The creditor under a regulated consumer credit agreement, within the prescribed period after he has received a request in writing to that effect from the debtor, shall give the debtor a statement in the prescribed form indicating, according to the information to which it is practicable for him to refer, the amount of the payment required to discharge the debtor’s indebtedness under the agreement, together with the prescribed particulars showing how the amount is arrived at.

(2) Subsection (1) does not apply to a request made less than one month after a previous request under that subsection relating to the same agreement was complied with.

(3) If the creditor fails to comply with subsection (1)—

(a) he is not entitled, while the default continues, to enforce the agreement; and

(b) if the default continues for one month he commits an offence.

Termination of agreements

98 Duty to give notice of termination (non-default cases)

(1) The creditor or owner is not entitled to terminate a regulated agreement except by or after giving the debtor or hirer not less than seven days’ notice of the termination.

(2) Subsection (1) applies only where—

(a) a period for the duration of the agreement is specified in the agreement, and

(b) that period has not ended when the creditor or owner does an act mentioned in subsection (1),

but so applies notwithstanding that, under the agreement, any party is entitled to terminate it before the end of the period so specified.

(3) A notice under subsection (1) is ineffective if not in the prescribed form.

(5) Regulations may provide that subsection (1) is not to apply to agreements described by the regulations.

(6) Subsection (1) does not apply to the termination of a regulated agreement by reason of any breach by the debtor or hirer of the agreement.

99 Right to terminate hire-purchase etc agreements

(1) At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.

(2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.

(3) Subsection (1) does not apply to a conditional sale agreement relating to land after the title to the land has passed to the debtor.

(4) In the case of a conditional sale agreement relating to goods, where the property in the goods, having become vested in the debtor, is transferred to a person who does not become the debtor under the agreement, the debtor shall not thereafter be entitled to terminate the agreement under subsection (1).

(5) Subject to subsection (4), where a debtor under a conditional sale agreement relating to goods, terminates the agreement under this section after the property in the goods has become vested in him, the property in the goods shall thereupon vest in the person (the “previous owner”) in whom it was vested immediately before it became vested in the debtor:

Provided that if the previous owner has died, or any other event has occurred whereby that property, if vested in him immediately before that event, would thereupon have vested in some other person, the property shall be treated as having devolved as if it had been vested in the previous owner immediately before his death or immediately before that event, as the case may be.

100 Liability of debtor on termination of hire-purchase etc agreement

(1) Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination.

(2) Where under a hire-purchase or conditional sale agreement the creditor is required to carry out any installation and the agreement specifies, as part of the total price, the amount to be paid in respect of the installation (the “installation charge”) the reference in subsection (1) to one-half of the total price shall be construed as a reference to the aggregate of the installation charge and one-half of the remainder of the total price.

(3) If in any action the court is satisfied that a sum less than the amount specified in subsection (1) would be equal to the loss sustained by the creditor in consequence of the termination of the agreement by the debtor, the court may make an order for the payment of that sum in lieu of the amount specified in subsection (1).

(4) If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.

(5) Where the debtor, on the termination of the agreement, wrongfully retains possession of goods to which the agreement relates, then, in any action brought by the creditor to recover possession of the goods from the debtor, the court, unless it is satisfied that having regard to the circumstances it would not be just to do so, shall order the goods to be delivered to the creditor without giving the debtor an option to pay the value of the goods.

101 Right to terminate hire agreement

(1) The hirer under a regulated consumer hire agreement is entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.

(2) Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.

(3) A notice under subsection (1) shall not expire earlier than eighteen months after the making of the agreement, but apart from that the minimum period of notice to be given under subsection (1), unless the agreement provides for a shorter period, is as follows.

(4) If the agreement provides for the making of payments by the hirer to the owner at equal intervals, the minimum period of notice is the length of one interval or three months, whichever is less.

(5) If the agreement provides for the making of such payments at differing intervals, the minimum period of notice is the length of the shortest interval or three months, whichever is less.

(6) In any other case, the minimum period of notice is three months.

(7) This section does not apply to—

(a) any agreement which provides for the making by the hirer of payments which in total (and without breach of the agreement) exceed £1,500 in any year, or

(b) any agreement where—

(i) goods are bailed or (in Scotland) hired to the hirer for the purposes of a business carried on by him, or the hirer holds himself out as requiring the goods for those purposes, and

(ii) the goods are selected by the hirer, and acquired by the owner for the purposes of the agreement at the request of the hirer from any person other than the owner’s associate, or

(c) any agreement where the hirer requires, or holds himself out as requiring, the goods for the purpose of bailing or hiring them to other persons in the course of a business carried on by him.

(8) If, on an application made to the Director by a person carrying on a consumer hire business, it appears to the Director that it would be in the interest of hirers to do so, he may by notice to the applicant direct that this section shall not apply to consumer hire agreements made by the applicant, and subject to such conditions (if any) as the Director may specify, this Act shall have effect accordingly.

(9) In the case of a modifying agreement subsection (3) shall apply with the substitution, for “the making of the agreement” of “the making of the original agreement”.

102 Agency for receiving notice of rescission

(1) Where the debtor or hirer under a regulated agreement claims to have a right to rescind the agreement, each of the following shall be deemed to be the agent of the creditor or owner for the purpose of receiving any notice rescinding the agreement which is served by the debtor or hirer—

(a) a credit-broker or supplier who was the negotiator in antecedent negotiations, and

(b) any person who, in the course of a business carried on by him, acted on behalf of the debtor or hirer in any negotiations for the agreement.

(2) In subsection (1) “rescind” does not include—

(a) service of a notice of cancellation, or

(b) termination of an agreement under section 99 or 101, or by the exercise of a right or power in that behalf expressly conferred by the agreement.

103 Termination statements

(1) If an individual (the “customer”) serves on any person (the “trader”) a notice—

(a) stating that—

(i) the customer was the debtor or hirer under a regulated agreement described in the notice, and the trader was the creditor or owner under the agreement, and

(ii) the customer has discharged his indebtedness to the trader under the agreement, and

(iii) the agreement has ceased to have any operation; and

(b) requiring the trader to give the customer a notice, signed by or on behalf of the trader, confirming that those statements are correct,

the trader shall, within the prescribed period after receiving the notice, either comply with it or serve on the customer a counter-notice stating that, as the case may be, he disputes the correctness of the notice or asserts that the customer is not indebted to him under the agreement.

(2) Where the trader disputes the correctness of the notice he shall give particulars of the way in which he alleges it to be wrong.

(3) Subsection (1) does not apply in relation to any agreement if the trader has previously complied with that subsection on the service of a notice under it with respect to that agreement.

(4) Subsection (1) does not apply to a non-commercial agreement.

(5) If the trader fails to comply with subsection (1), and the default continues for one month, he commits an offence.

104 Goods not to be treated as subject to landlord’s hypothec in Scotland

Goods comprised in a hire-purchase agreement or goods comprised in a conditional sale agreement which have not become vested in the debtor shall not be treated in Scotland as subject to the landlord’s hypothec—

(a) during the period between the service of the default notice in respect of the goods and the date on which the notice expires or is earlier complied with; or

(b) if the agreement is enforceable on an order of the court only, during the period between the commencement and the termination of an action by the creditor to enforce the agreement.

Part VIII

Security

General

105 Form and content of securities

(1) Any security provided in relation to a regulated agreement shall be expressed in writing.

(2) Regulations may prescribe the form and content of documents (“security instruments”) to be made in compliance with subsection (1).

(3) Regulations under subsection (2) may in particular—

(a) require specified information to be included in the prescribed manner in documents, and other specified material to be excluded;

(b) contain requirements to ensure that specified information is clearly brought to the attention of the surety, and that one part of a document is not given insufficient or excessive prominence compared with another.

(4) A security instrument is not properly executed unless—

(a) a document in the prescribed form, itself containing all the prescribed terms and conforming to regulations under subsection (2), is signed in the prescribed manner by or on behalf of the surety, and

(b) the document embodies all the terms of the security, other than implied terms, and

(c) the document, when presented or sent for the purpose of being signed by or on behalf of the surety, is in such a state that its terms are readily legible, and

(d) when the document is presented or sent for the purpose of being signed by or on behalf of the surety there is also presented or sent a copy of the document.

(5) A security instrument is not properly executed unless—

(a) where the security is provided after, or at the time when, the regulated agreement is made, a copy of the executed agreement, together with a copy of any other document referred to in it, is given to the surety at the time the security is provided, or

(b) where the security is provided before the regulated agreement is made, a copy of the executed agreement, together with a copy of any other document referred to in it, is given to the surety within seven days after the regulated agreement is made.

(6) Subsection (1) does not apply to a security provided by the debtor or hirer.

(7) If—

(a) in contravention of subsection (1) a security is not expressed in writing, or

(b) a security instrument is improperly executed,

the security (so far as provided in relation to a regulated agreement) is enforceable against the surety on an order of the court only.

(8) If an application for an order under subsection (7) is dismissed (except on technical grounds only) section 106 (ineffective securities) shall apply to the security.

(9) Regulations under section 60(1) shall include provision requiring documents embodying regulated agreements also to embody any security provided in relation to a regulated agreement by the debtor or hirer.

106 Ineffective securities

Where, under any provision of this Act, this section is applied to any security provided in relation to a regulated agreement, then, subject to section 177 (saving for registered charges),—

(a) the security, so far as it is so provided, shall be treated as never having effect;

(b) any property lodged with the creditor or owner solely for the purposes of the security as so provided shall be returned by him forthwith;

(c) the creditor or owner shall take any necessary action to remove or cancel an entry in any register, so far as the entry relates to the security as so provided; and

(d) any amount received by the creditor or owner on realisation of the security shall, so far as it is referable to the agreement, be repaid to the surety.

107 Duty to give information to