Consumer credit agreements come in different forms and many of us may not even consider that we have credit in the traditional sense. The term covers a variety of goods and services, including hire purchase agreements, bank accounts, credit cards, pay day loans, mail orders, store cards and logbook loans to name just a few.
Many finance agreements which individuals enter into are regulated by the Consumer Credit Act 1974 (the “Act”) which imposes strict obligations on creditors. If you are a party to a finance agreement which is regulated by the Act and the creditor hasn’t complied with their obligations then you may be entitled to significant amounts of money.
A key aim of the Act and other relevant consumer credit law is to provide protection for you, the consumer. This is done by the overall licensing of the industry, requiring specific practices to be adhered to, procedures to be followed and documents to be provided in relation to the agreement.
Following the financial crisis and a government review of the regulatory framework of financial services the Consumer Credit regime was wholly brought within the Financial Conduct Authority’s (“FCA”) remit.
Firms carrying on consumer credit activities must be authorised by the FCA and all authorised firms are listed on the financial services register. The register provides a firm’s details and what activities it is permitted to undertake.
These firms must adhere to the FCA’s handbook which sets out obligations, systems and controls, minimum standards, complaints procedures, administrative processes to name just a small number of the relevant areas covered in the handbook. There are 15 manuals in total which apply to these firms.
If a firm does not comply with its requirements under the FCA handbook then you may be entitled to compensation from it.
There are a number of practices regulated by the Act which have strict requirements that must be met in order for those activities to take place. Those practices include canvassing off trade premises, also known as “doorstep selling”, sending circulars, with a view to financial gain, to those under 18 years old, inviting them to obtain and the ways in which consumer credit can be advertised. If the relevant requirements of the Act are not met, this can lead to a criminal offence being committed and you may have a potential claim for compensation.
The Act imposes numerous requirements and obligations on a creditor in respect of the actual finance agreement and you may be entitled to compensation if these have not been complied with, for example if you were not served with a Default Notice or, in the event that you were, the information on it was inaccurate. You may also be entitled to compensation if you have paid more than a third of the total amount due under the agreement and the creditor repossesses goods without a Court Order or your written consent.
There are other circumstances when the creditor may need the court’s permission to enforce an agreement and you may be entitled to compensation or a reduction of any amount which you still owe the creditor, for example if your creditworthiness was not properly assessed by the creditor before you entered into the agreement; the terms of the agreement were not properly explained to you; you were not given details of key information before you entered into the agreement; if there was an error on the agreement or it omitted key information; if you did not sign the agreement; and if you were not given a copy of the agreement.
This is not an exhaustive list and there are many circumstances in which the creditor may conduct itself during negotiations, entering into the agreement, the course of the agreement, termination and post termination of the agreement which may give rise to circumstances entitling you to compensation or a reduction in the amount which you owe the creditor.
How can Truth Legal help?
The right legal support is crucial in disputes about the enforceability of your finance agreement and should be arranged as early as possible. Taking action without specialist advice can carry many risks including not seeking the full amount you might be entitled to in compensation claims.
By instructing Truth Legal, you will have expert guidance on hand, spearheaded by specialist litigation solicitor, Katherine Clark. We pride ourselves on providing an ethical and effective legal service.
We are based in Harrogate with presences in York, Manchester, and London. We act for clients all around the country.
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Truth Legal offers affordable fixed fees or hourly rates – allowing you a flexible and cost-effective service. You may also have Legal Expenses Insurance on your home insurance policy allowing some or all of your legal costs to the paid by your home insurance.
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For clear, expert guidance tailored to your situation, contact Truth Legal today.