1. Introduction
The Consumer Credit Act 1974 (CCA 1974) was introduced to protect consumers and some small businesses using credit to buy goods and services in the UK.
The CCA 1974 was reviewed and amended by the Consumer Credit Act 2006 (CCA 2006) and further provisions were brought into force in the UK in 2010 (The Consumer Credit (Agreement) Regulations 2010) as a result of the European Consumer Credit Directive (which had been adopted in Europe in 2008).
Until 1 April 2014, the Office of Fair Trading (OFT) was responsible for overseeing the Consumer Credit Act. From 1 April 2014, the OFT closed and its functions were largely divided between the Competition and Markets Authority and the Financial Conduct Authority (FCA), which has assumed responsibility for regulating consumer credit.
Some parts of the Consumer Credit Act have been abolished, but most of its provisions remain in force and have been carried over into new rules made by the FCA in its Sourcebook. The specific rules for firms carrying out consumer credit activities are set out in the FCA’s Consumer Credit Sourcebook (referred to as ‘CONC’).
In June 2022, the UK government began a process to change the CCA 1974 radically. The government will move much of the Act from statute to sit under the FCA – enabling the regulator to quickly respond to emerging developments in the consumer credit market, rather than having to amend existing legislation. It will also simplify ambiguous technical terms to make clear to consumers what protections they have. This is currently at the consultation phase and is expected to take many years to be completed because of the complexity of legislation.
Consumer credit legislation is complex. It is suggested that debt advisers getspecialist advice when dealing with challenges to the CCA 1974.