About Resolva Disputes
Section 75
Section 75, an integral part of the Consumer Credit Act (CCA), specifically addresses the dynamics of credit card transactions and the allocation of liability in cases of misrepresentation or contractual breaches. When a consumer finds themselves on the short end of a deal, invoking a Section 75 claim becomes a powerful recourse, holding both the merchant and the credit card issuer equally responsible under the law.
Key Points:
- Applicability: Section 75 protections extend to individual credit card purchases, regardless of whether they are conducted in-person or online, by a UK consumer. The purchase amount must fall within the range of £100 to £30,000, with debit card transactions excluded.
- Full Coverage: Notably, Section 75 covers the entirety of a credit card purchase, even if it was initiated with only a down payment or deposit. This comprehensive coverage remains intact, even if subsequent payments were made through alternative methods.
Section 140
Addressing Fairness in Lending: Section 140 of the Amended Consumer Credit Act 1974
Section 140 of the Consumer Credit Act 1974, as amended, is designed to address and rectify potential imbalances between borrowers and lenders in loan agreements. The Act identifies instances of unfairness, offering a comprehensive framework to mitigate such situations.
Key Provisions:
- Unfair Terms: Section 140 empowers the court to identify situations where the terms of the loan agreement or related agreements are deemed unjust towards the borrower.
- Creditor Conduct: The Act allows scrutiny of how the creditor has exercised their rights under the agreement. This includes actions such as initiating legal proceedings or attempting to recover debts, ensuring fairness and ethical practices.
- Lender Actions or Inactions: Section 140 encompasses any actions or omissions by the lender or their representatives concerning the loan agreement or related agreements, such as insurance policies linked to the loan. For instance, this could pertain to terms within the loan agreement itself or associated insurance policies.
Applicability:
- The provisions of Section 140 apply broadly to all second charge lending, provided the relevant agreement was established before 21 March 2016. Second charge lending involves loans secured against a property through a mortgage.
- It's crucial to note that any second charge lending initiated after 21 March 2016 falls under the jurisdiction of the Financial Conduct Authority mortgage regime. In such cases, the provisions outlined in Section 140 of the Consumer Credit Act 1974 are not applicable.
In essence, Section 140 serves as a protective mechanism, ensuring fairness and equity in lending practices. By delineating instances of potential unfairness and prescribing remedies, the Act aims to foster a balanced and just relationship between borrowers and lenders, particularly in the realm of second charge lending agreements.
Section 56
In 2008, the Consumer Credit Act ushered in groundbreaking "unfair relationships" provisions, providing customers with the means to challenge loan agreements that might tip the scales towards an unjust relationship with their lenders.
Key Elements:
- Challenging Unfair Relationships: Customers can contest credit agreements that may give rise to an unfair relationship. The court may intervene if:
- Any terms within the credit agreement or related agreements create an unfair relationship.
- The lender's exercise or enforcement of rights under the credit agreement is deemed unfair.
- Actions or inactions by the lender, preceding or following the credit agreement, contribute to an unfair relationship.
Court Powers:
In instances where an unfair relationship is identified, the court wields an array of powers, including the authority to:
- Modify the terms of the credit agreement.
- Reduce the amount payable by the customer.
- Compel the lender to refund money to the customer.
- Eliminate any duties imposed on the customer under the agreement.
Lender's Burden of Proof:
When a customer raises a complaint, the onus is on the lender to demonstrate that their actions were not unfair. Customer claims may encompass allegations against the lender's agents for actions taken or neglected.
Recourse Options:
Should a consumer find the lender's response unsatisfactory, they have recourse options, including referring the matter to the Financial Ombudsman Service (FOS) for investigation and adjudication, or pursuing legal action. The FOS extends its assistance to various financial matters, spanning banking, credit cards, loans, hire purchase, pawnbroking, and financial advice.
Consumer Credit Act Section 56:
Section 56 of the Consumer Credit Act provides consumers with comprehensive coverage against:
- Misrepresentation
- Irresponsible lending
- Unaffordable lending
- Unregulated lending
- Unfair lending
In essence, these provisions aim to empower consumers, ensuring fairness and equity in their interactions with lenders. For more detailed information, the 'FLA Lending Code and dispute resolution' module offers insights into the Financial Ombudsman Service.
These legislative measures underline the commitment to a fair and transparent financial landscape, allowing consumers to assert their rights and maintain integrity within credit relationships.