‘The Consumer Rights Act 2015 comes into force on 1 October 2015. In anticipation, Henderson Chambers is publishing a series of Alerters reviewing the key provisions. In this final article in the series, Rachel Tandy considers the impact of the legislation on the financial services sector.’
Henderson Chambers, 28th September 2015
Source: www.hendersonchambers.co.uk
‘Logbook loan borrowers have too little protection – and those who unwittingly buy cars subject to logbook loans have none at all. Today the Law Commission opens a consultation to reform the archaic law underlying logbook loans – the “Bills of Sale Acts” – which remains unchanged since Victorian times.’
Law Commission, 9th Spetember 2015
Source: www.justice.gov.uk/lawcommission
‘Under sections 140A-140D of the Consumer Credit Act 1974 credit transactions may be re-opened as a matter of judicial discretion. These wide judicial powers were added to the Act in 2006 (and came into force on 6 April 2007) in substitution of the previous, more limited, “extortionate credit bargains” regime which had routinely failed to provide an effective remedy to borrowers and guarantors seeking to challenge the terms of their agreement with the lender.’
No. 5 Chambers, 3rd September 2015
Source: www.no5.com
Regina v Bhatti [2015] EWCA Crim 1305; [2015] WLR (D) 346
‘Where the police obtained financial information from a credit ratings agency in reliance on section 29(1) of the Data Protection Act 1998, such information having been obtained by the agency from customers who had expressly agreed in their credit applications and agreements that their data might be shared for the purpose of crime detection, prevention and prosecution, the procedural requirements of Schedule 1 to the Police and Criminal Evidence Act 1984 were not bypassed and the information was lawfully obtained, so that it was not precluded from admissibility in criminal proceedings.’
WLR Daily, 30th July 2015
Source: www.iclr.co.uk
NRAM plc v McAdam and another [2015] EWCA Civ 751; [2015] WLR (D) 334
‘In a specific loan agreement, which was the template for agreements between a bank and numerous customers, the protections under section 77A of the Consumer Credit Act 1974 had not been incorporated, and no estoppel arose from the existence of the statutory wording in the agreement. Nor was it possible to treat the borrowers “as if” they had been under the protection provided by the 1974 Act. However, there had been a representation (and contractual warranty) arising from the statement that the loan agreement was a regulated agreement, when it was not, which would have entitled the borrowers to sue for misrepresentation or breach of contractual warranty.’
WLR Daily, 23rd July 2015
Source: www.iclr.co.uk
‘The High Court (Swift J, 22 May 2015) has upheld an order dismissing a claim under section 140A of the Consumer Credit Act 1974 (CCA) on the summary basis, in the absence of conduct on the part of a lender causative of unfairness in a debtor/creditor relationship.’
Henderson Chambers, 3rd June 2015
Source: www.hendersonchambers.co.uk
‘Consumer credit legislation requires lenders to negotiate a minefield of regulation and formalities. Even small errors in form, content or procedure can render a loan contract unenforceable and prevent a lender recovering the sums advanced. In the circumstances it is understandable that the exemptions within the legislation, such as that created by s.16B(1) of the Consumer Credit Act 1974 are often invoked to avoid the rigours of regulation. However, this approach can give rise to new risks as demonstrated in Woolsey v Payne [2015] EWHC 968 (Ch) [2015] All ER (D) 24 (May) and Wood v Capital Bridging Finance Limited [2015] EWCA Civ 451. Sarah Clarke, counsel in Woolsey and Payne, suggests how the lawyers and lenders should modify their approach to this exemption in light of these decisions.’
11 Stone Buildings, June 2015
Source: www.11sb.com
‘The Financial Conduct Authority (FCA) is to consult on the issue of unsolicited marketing by consumer credit firms this summer, according to an answer given in the UK parliament.’
OUT-LAW.com, 1st July 2015
Source: www.out-law.com
‘Lloyds Banking Group has docked £350,000 from the bonus of its boss António Horta-Osório after being hit with a £117m fine for unacceptable handling of compensation claims for payment protection insurance.’
The Guardian, 5th June 2015
Source: www.guardian.co.uk
‘Banks could face a bigger bill for mis-selling payment protection insurance after the City regulator said it was considering new rules on how customers should be compensated.’
The Guardian, 27th May 2015
Source: www.guardian.co.uk
‘In cases where the hirer of a car on credit terms is not impecunious, we thought we knew where we stood after Dimond v Lovell [2001] 1AC 384. The Claimant was entitled to recover the ‘spot rate’ or, as the Court of Appeal in Pattni v First Leicester Buses Ltd [2012] RTR 17 insisted, ‘basic hire rate’ or BHR. In Burdis v Livsey [2003] QB 36, three possible ways of calculating the basic hire rate were considered and indeed that consideration was repeated by Aikens LJ in Pattni. Both the Court of Appeal in Burdis and the Court of Appeal in Pattni rejected the mode of calculation of applying a reasonable discount to the credit hire rate charged. That left two methods of calculation. The first, which was not favoured by the Court of Appeal in Burdis, was to break down the charge made by the credit hire company and remove the additional elements from the claim in respect of credit, claim handling and delivery &c. The Court of Appeal in Burdis thought that the cost of working all that out might well be disproportionate. The court in Pattni, however, considered that where the actual credit hire company which had hired the replacement car to the Claimant, disclosed the BHR for that type of car in that area at that time, that might well be the best mode of calculation.’
Zenith PI Blog, 20th May 2015
Source: www.zenithpi.wordpress.com
‘Traditionally, when assessing recoverable rates, credit hire companies have argued that where a range of comparable basic hire rates (BHR) can be shown from other companies, some of which are higher than the credit hire rate claimed, the Claimant’s credit hire rate should be awarded in full.’
Zenith PI Blog, 16th March 2015
Source: www.zenithpi.wordpress.com
‘Solicitors are not under a general duty to check the credit status of parties in a commercial transaction unless instructed to, the High Court has ruled.’
Legal Futures, 4th March 2015
Source: www.legalfutures.co.uk
Plevin v Paragon Personal Finance Ltd and another [2014] UKSC 61; [2014] WLR (D) 487
‘An agreement for payment protection insurance was unfair within the meaning of section 140A of the Consumer Credit Act 1974, as inserted, when the debtor had not been told, before concluding the agreement, that over 70% of the one-off £5,780 premium would be used to pay commission to various parties.’
WLR Daily, 12th November 2014
Source: www.iclr.co.uk
Plevin (Respondent) v Paragon Personal Finance Limited (Appellant) [2014] UKSC 61 (YouTube)
Supreme Court, 12th November 2014
‘The UK’s financial watchdog is clamping down on payday loans, with new rules to ensure that borrowers are never forced to repay more than twice the sum of their original loan.’
The Guardian, 11th November 2014
Source: www.guardian.co.uk
‘ When Harry Moore was taken to court over spiralling credit card debts, he faced losing both his home and business. Mr Moore, 43, had built up a balance of more than £13,000 on an MBNA credit card, and had failed to meet repayments. His debts were passed from MBNA to a debt recovery agency, Hillesden Securities, which in November 2013 took him to court. But the case was thrown out – because the orginal agreement was “impossible to read”.’
Daily Telegraph, 16th July 2014
Source: www.telegraph.co.uk
‘The cap proposed by the Financial Conduct Authority means that if someone borrows £100 from a payday lender and pays it back within the agreed 30 days, they would pay a maximum of £24 in charges. Fees for late payment would be capped at £15, with a total price cap of 100% of the original loan to stop default charges spiralling out of control.’
The Guardian, 15th july 2014
Source: www.guardian.co.uk
Scotland and another v British Credit Trust Ltd [2014] EWCA Civ 790; [2014] WLR (D) 252
‘When determining whether negotiations between a debtor and a supplier were “antecedent negotiations” within section 56(1)(c) of the Consumer Credit Act 1974, so that the supplier was deemed to have been acting as an agent of the creditor, the court had to inquire whether all the negotiations formed part of one transaction as a matter of fact.’
WLR Daily, 10th June 2014
Source: www.iclr.co.uk
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