This act sets out the rules which lenders must follow when they lend amounts of £15,000 or less to consumers.
The act regulated the sales of secured and unsecured lending under £25,000, excluding loans for property purchases. Regulation covers the administration of a loan through cooling off periods and action allowed to recuperate losses from defaults.
The legislation that regulates the consumer credit market in the UK, including credit cards.
An act of Parliament aimed at ensuring 'truth in Lending'. It established a system for the protection of consumers for amounts borrowed below 25,000 controlling traders concerned with providing credit or the supply of goods on credit or hire. Under the act, 'consumer` means an individual, sole trader, or partnership, but not a corporate body. (See definition for 'Corporate Body).
Amongst other things, regulates certain secured and unsecured lending. Loans in excess of £25,000 are unregulated. Loans for house purchase are exempt. Regulated loans require set procedures for both pre-loan administration and default arrangements. The Act also sets out requirements for ‘cooling-off periods' -– these provide the opportunity for borrowers to change their minds.
This is the main legislation covering the provision of loans to individuals. A regulated loan is one that does not exceed £25,000 and would not include a mortgage loan of over £25,000 and so the lenders set a minimum loan of £25,001 to ensure it is not treated as a regulated loan.
The Consumer Credit Act 1974 is a consumer protection law in the UK. It requires certain businesses to obtain Consumer credit licences and protects individuals receiving credit up to £25,000. Appeals under the Consumer Credit Act are made to the Office of Fair Trading.
