This paper intends to discuss the Consumer Credit Act of 1974 and 2006. The main focus of this paper is to analyse whether these Consumer Credit Act of 1974 and 2006 ensures that consumers are adequately informed and protected from unfair practices of the credit agreement. Various aspects of these credit agreement oriented laws are examined to know the rights of the borrowers and if they are completely protected.
Initially the first Consumer Credit Act was introduced in 1974and it provides significantly great protection to the borrowers who pay for their purchases on credit terms, either by credit card or any other means. However, in recent times it has been reinforced in 2006 to make it strengthen. This has assisted the legislation in bringing the consumer credit of UK in the line along with European Directives. In addition to this, the act of 2006 also takes in to consideration about the burgeoning credit market.
Credit Consumer Act of 1974
Summary of the Rights
Protection for purchase more than 100 pounds
If a consumer has made a transaction and purchased an item, which is over 100 pounds then he is advised to use a credit card instead of a debit one. However, in this case the consumer shall ensure that by the end of the month he makes the payment so he shall not be liable to make any interest payment. As mention earlier the lower limit of this protection is 100 pounds, while the upper limit of this protection is extended till 30, 000 pounds. However, only few people shall be affected by the upper limit.
Credit Card Company and Supplier are equally liable
In cases, where any problem occurs then both, credit card firm and the supplier shall be accountable to rectify the problem. However, it is recommended that consumer shall go first to the supplier to lodge the claim. In case where supplier may reject the claim then the consumer may forward the claim to the credit card firm.
Liability is limited to the first 50 pounds
If the consumer reports that his credit card has been stolen then he may only be liable for the initial 50 pounds. Further, if the credit card is found to be used after being stolen then the consumer shall not be charged any penny for those transactions. This way the law provides great protection to the consumers.
Cooling off Period
This term refers to the regulation that provides some cushion time to the consumers where they have a right to change the terms with the short span of period. However, of there is any doubt regarding the credit terms then it is always recommended not to sign the contract papers unless one is absolutely sure about the terms. The consumer shall carry the credit agreement documents to the home and then decide. This way he also get time to read and understand the terms in a relax mode without any pressure.
Section 75 of Credit Consumer Act of 1974
There are various important sections that a consumer must have ...