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Consumer Credit Act

Protecting consumers with the Consumer Credit Act

Nowadays, it is common for consumers to spend beyond their means. Even in the current financial climate, credit is readily available to people who shouldn’t even be offered credit. Banks, Loan and Credit Card companies lend money to individuals who do not pass even their own criteria in order to secure commission within their workplace. This is part of the reason why the country is in the current financial state. So we cant solely blame individuals for this, the banks have to take some responsibility for their actions.

The Consumer Credit Act

The Consumer Credit Act is a law that protects the consumers who may be offered credit opportunities from unfair practices of creditors. It was set up in 1974 and was later amended in 2006 based to adjust with the times.

The Consumer Credit Act does not offer debt help or does not provide solutions for those who want to get out of debt. It only serves as a basis when the debtor says that he has been unfairly treated or unfairly offered illegal or unfair business practices. Generally what the Consumer Credit Act does is the following:

  • The 1974 Consumer Credit Act regulates agreement between traders and consumers by establishing rules on credit advertisement, annual percentage rates, credit agreements, settlements on early stages and defaults on credits. Moreover, it is in this act that requires license from financial advisors, credit brokers, and other credit establishments.
  • The 2006 Consumer Credit Act was upgraded to involve the Financial Ombudsman. At this point, there was more protection for the consumers as it addresses more reasonable fees, elimination of credit limits, and provision of ways for consumers to complain against an alleged unfair trader.

The UK Debt Advisor can provide more details about a person’s rights in the current credit market. In most cases, when the debtor has problems with debts, the debt advisor will take into account his rights and protection. From here, they can check if the problem is due to unfair trading on behalf of the creditors or from personal circumstances. The result will help the debt advisor know the kind of debt help that is suitable for the particular case.