Consumer Credit Act 1974
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| Long title | An Act to establish for the protection of consumers a new system, administered by the Director General of Fair Trading, of licensing and other control of traders concerned with the provision of credit, or the supply of goods on hire or hire-purchase, and their transactions, in place of the present enactments regulating moneylenders, pawnbrokers and hire-purchase traders and their transactions; and for related matters. |
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| Citation | 1974 c 39 |
| Introduced by | Geoffrey Howe |
| Territorial extent | England & Wales; Scotland; Northern Ireland |
| Dates | |
| Royal assent | 31 July 1974 |
| Commencement | 31 July 1974, 19 May 1985 |
| Other legislation | |
| Amended by |
Enterprise Act 2002 Consumer Credit Act 2006 |
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Status: Amended
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| Text of statute as originally enacted | |
| Text of the Consumer Credit Act 1974 as in force today (including any amendments) within the United Kingdom, from legislation.gov.uk | |
The Consumer Credit Act 1974 (c 39) is an Act of the Parliament of the United Kingdom that significantly reformed the law relating to consumer credit within the United Kingdom.
Prior to the Consumer Credit Act, legislation covering consumer credit was slapdash and focused on particular areas rather than consumer credit as a whole, such as moneylenders and hire-purchase agreements. Following the report of the Crowther Committee in 1971 it was decided that wide-ranging reform of consumer credit law was needed, and a bill to do this was introduced to Parliament. Despite its progress through Parliament being disrupted by a general election, the bill passed quickly through the legislative process thanks to support from both the government and the opposition, coming into law on 31 July 1974.
The Act introduces new protection for consumers and new regulation for bodies trading in consumer credit and related industries. Such traders must have full licenses from the Office of Fair Trading, which may be suspended or revoked in the event of irregularities. The Act also regulates what may be taken as security, limits the ways in which credit organisations can advertise and gives the county court the ability to intercede in the case of unfair or unjust credit agreements. It also gives additional rights to the debtor, including certain limited rights to cancel concluded agreements. The Act was amended by the Consumer Credit Act 2006.
Consumer credit regulation was almost entirely ignored by both Parliament and the courts for over 800 years, with the judges and Members of Parliament taking the attitude that there was no reason to interfere with fairly concluded contracts. The first piece of legislation to deal with consumer credit was the Bills of Sale Act 1854, which required bills of sale to be registered. This allowed the courts to intervene for the first time, since an unregistered bill of sale was void and could not be claimed by creditors. This act was followed by the Bills of Sale Act 1878 and the Bills of Sale Act (1878) Amendment Act 1882, which provided limited protection for debtors. Outside of these acts, however, little was done between 1854 and 1900, and moneylenders used this to their advantage, sometimes abusively; the report of the House of Commons Select Committee on Money-Lending in 1898 included testimony from one moneylender who admitted he charged 3,000% interest, while another had worked under 34 different aliases to avoid having notoriety associated with his name.
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