DO YOU HAVE A LOAN?
ARE YOU THINKING OF GETTING A LOAN?

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THEN YOU SHOULD BE AWARE OF IMPORTANT CHANGES TO THE CONSUMER CREDIT ACT 1974

THIS PAGE EXPLAINS WHAT THESE CHANGES MEAN TO YOU

Q. What is the Consumer Credit Act?

A. Most loan and hire agreements have to comply with this Act. It provides a range of protection to consumers and covers most loans, credit card agreements, and hire agreements.

From 1 May 1998, the Act's protection will apply to loans and hire agreements for amounts up to £25,000. Many of the other monetary limits and amounts in the Act will also be increasing. This leaflet explains the main monetary figures that will apply after 1 May.

CREDIT AGREEMENTS

Q. How much will I have to pay to get a statement of account and other information from my lender?

A. £1

Q. Can a credit broker charge me if I don't take up a loan?

A. If you don't take up a loan as a result of using a broker's services or the agreement is canceled within six months the broker can only charge you a fee of £5. If you have already paid a fee, the broker should refund any amount over £5. You may still be liable for costs which are not part of the brokers fee, such as the costs of a survey.

Q. If I lose my credit card or it's stolen, am I responsible if someone else uses it?

A. Telephone your credit card company straight away and then confirm your call in writing because you won't be liable if someone else uses your card after you have informed them. If it's used before you inform them, you may have to pay up to £50.

Q. If I buy a television on credit, but it does not work when I get it home and the supplier refuses to mend or replace it or give me a refund, can I claim against the credit company?

A. You may able to claim from the credit company for breach of contract or misrepresentation by the supplier provided the cash price of the goods was between £100 and £30,000.

HIRE AGREEMENTS

Q. How much can a hire company charge me for a statement of account or certain other information about a hire agreement?

A. £1

Q. Can I end a regulated consumer hire agreement early?

A. In general, you can end a hire agreement after 18 months. If the total hire payments made in any year is not more than £1,500, you can end some agreements earlier by giving the required notice to the hire company.

PAWNBROKING

Q. If I lose my pawn receipt or it has been stolen or destroyed, can I still redeem my property from a pawnbroker?

A. If the pawn is security for a loan of not more than £75, and the pawnbroker agrees, an unsworn statement can be used instead of the pawn receipt. In other cases, a sworn statement is required.

Q. If I do not redeem my property, when can the pawnbroker sell it?

A. If the property secured credit is not more than £75, and the redemption period was 6 months, then the pledge becomes the property of the pawnbroker if it has not been redeemed by the end of this period. In any other case, the property in pawn passes to the pawnbroker at the end of the agreed redemption period.

Q. Does the pawnbroker have to give me advance notice if he intends to sell property which I used as security for a loan?

A. Not unless the loan was for more than £100. If it was, the pawnbroker should give at least 14 days' notice that he intends to sell the goods.

OTHER MATTERS

Q. How much will it cost to get a copy of the information held on me by a credit reference agency?

A. £2

Q. If I guarantee a friend's loan or hire agreement, how much can the credit or hire company charge me for a copy of the surety instrument or other information about the agreement?

A. £1

Q. Where can I get further information about the law on credit and hire agreements?

This article gives general guidance only. If you want advice about a loan or hire agreement you are considering taking on or already have, you should contact your local Citizens Advice Bureau or other advice centre. Some local authority Trading Standards (or Consumer Protection) Departments may also be able to give advice. You can find their addresses and telephone numbers in your local telephone directory.

Source: Office of Fair Trading, 2002.

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