Consumer Credit Act 2006

Consumer Credit Act 2006[a]
Act of Parliament
coat of arms
Parliament of the United Kingdom
Long titleAn Act to amend the Consumer Credit Act 1974; to extend the ombudsman scheme under the Financial Services and Markets Act 2000 to cover licensees under the Consumer Credit Act 1974; and for connected purposes.
Citation2006 c. 14
Territorial extent United Kingdom[b]
Dates
Royal assent30 March 2006
Commencementvarious[c]
Other legislation
Amends
Relates to
Status: Amended
History of passage through Parliament
Text of statute as originally enacted
Revised text of statute as amended
Text of the Consumer Credit Act 2006 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk.

The Consumer Credit Act 2006[1] (c. 14) is an act of the Parliament of the United Kingdom intended to increase consumer protection when borrowing money.

Purpose

The 2006 act had four main purposes:[2]

  • to improve the rights of consumers and to provide consumers with redress
  • to strengthen regulation of consumer credit businesses
  • to extend the coverage of regulation to all forms of consumer credit agreements
  • to provide debtors with additional post-contractual information

Provisions

The main provisions of the act are to extend the scope of the Consumer Credit Act 1974, to create an ombudsman scheme, and to increase the powers of the Office of Fair Trading in relation to consumer credit, including consumer credit agreements (CCA), and similar borrowing facilities. In addition, it permits borrowers to challenge unfair debtor-creditor relationships in court.[3]

Consumer Credit Act 1974

The 2006 act brings two further types of agreement under the scope of the 1974 act:[4]

  • Consumer agreements above £25,000, to reflect growing levels of consumer borrowing and debt;
  • In section 1, to include small, one-man businesses and partnerships of up to three people.

Ombudsman scheme

The 2006 act gives consumers the option of using the Financial Ombudsman Service if they are unhappy with their lender's dispute resolution service, whether the lender consents or not. Complaints may also be raised against other types of credit related companies, such as debt-collection agencies.

Office of Fair Trading

The 2006 act empowers the Office of Fair Trading (OFT) to investigate applicants for consumer credit licences, to impose conditions on licences.[5] The act also imposes civil penalties of up to £50,000 on companies, or £5,000 on individuals, failing to comply with its conditions. Appeal is to the First-tier Tribunal (formerly the Consumer Credit Appeals Tribunal) and thence, with leave, to the Upper Tribunal.

Section 71 - Short title, commencement and extent

The following orders have been made under section 71(2):

See also

Notes

  1. ↑ Section 71(1).
  2. ↑ Section 71(3).
  3. ↑ Section 71(2).

References

  1. ↑ The citation of this act by this short title is authorised by section 71(1) of this act.
  2. ↑ "Current Developments: Edited by Iain McDonald". Journal of Social Welfare and Family Law. 27 (3–4): 395–419. December 2005. doi:10.1080/09649060500387065. ISSN 0964-9069.
  3. ↑ "Unfair Relationships under the Consumer Credit Act 2006". The Payday Review. 28 February 2013. Archived from the original on 30 March 2013. Retrieved 2 March 2013.
  4. ↑ Smith, Julia; MacCalla, Sandra (2006). Consumer Credit Act 2006: a guide to the new law. Legislation guides. London: Law Society. ISBN 978-1-85328-543-1.
  5. ↑ "Consumer Credit Bill". BBC News. 5 July 2005. Retrieved 3 July 2026.
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