31st July 2006

Consumer Credit Act (1974)
In March 2006 changes to the 1974 Consumer Credit Act came into force, bringing in a number of new measures. Section 2 of the Act removes the £25,000 financial limit for regulation of consumer credit agreements. In future all agreements will be regulated by the 1974 Act unless certain exemptions apply.

A number of exemptions have been introduced, for example high net worth individuals who submit declarations in a specified format. These persons will effectively forgo their statutory rights and protection where the credit provided or the hire payments to be made exceed £25,000.

The old bargain definitions will be phased out in favour of new provisions focused on 'unfair relationships between creditors and debtors', based on consideration of a number of guidelines, for example the way in which the creditor has enforced his rights.