The Consumer Credit Act 2006 (c 14) is an Act

Act of Parliament

An Act of Parliament is a statute enacted as primary legislation by a national or sub-national parliament. In the Republic of Ireland the term Act of the Oireachtas is used, and in the United States the term Act of Congress is used.In Commonwealth countries, the term is used both in a narrow...

 of the Parliament of the United Kingdom

Parliament of the United Kingdom

The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...

 intended to increase consumer protection

Consumer protection

Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...

 when borrowing money.

Provisions

The main provisions of the Act are to extend the scope of the Consumer Credit Act 1974

Consumer Credit Act 1974

The Consumer Credit Act 1974 is an Act of the Parliament of the United Kingdom that significantly reformed the law relating to consumer credit within the United Kingdom....

, to create an Ombudsman

Ombudsman

An ombudsman is a person who acts as a trusted intermediary between an organization and some internal or external constituency while representing not only but mostly the broad scope of constituent interests...

 scheme, and to increase the powers of the Office of Fair Trading

Office of Fair Trading

The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...

 in relation to consumer credit. In addition, it permits borrowers to challenge in court "unfair relationships between creditors and debtors".

Consumer Credit Act 1974

The 2006 Act brings two further types of agreement under the scope of the 1974 Act:

• Consumer agreements above £25,000, to reflect growing levels of consumer borrowing and debt
  Debt
  A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...
  
  ;
• 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

Financial Ombudsman Service

The United Kingdom's Financial Ombudsman Service is an ombudsman established in 2001 as a result of the Financial Services and Markets Act 2000 to help settle disputes between consumers and UK-based businesses providing financial services, such as banks, building societies, insurance companies,...

 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

Office of Fair Trading

The Office of Fair Trading is a not-for-profit and non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforces both consumer protection and competition law, acting as the UK's economic regulator...

 (OFT) to investigate applicants for consumer credit licences, to impose conditions on licences, and to impose civil penalties of up to £50,000 on companies which fail to comply with its conditions, appeals from which lie to the First-tier Tribunal

First-tier Tribunal

The First-tier Tribunal is part of the administrative justice system of the United Kingdom. It was created in 2008 as part of a programme, set out in the Tribunals, Courts and Enforcement Act 2007, to rationalise the tribunal system, and has since taken on the functions of twenty previously...

 (formerly the Consumer Credit Appeals Tribunal) and thence, with leave, to the Upper Tribunal

Upper Tribunal

The Upper Tribunal is part of the administrative justice system of the United Kingdom. It was created in 2008 as part of a programme, set out in the Tribunals, Courts and Enforcement Act 2007, to rationalise the tribunal system, and to provide a common means of handling appeals against the...

.

Section 71 - Short title, commencement and extent

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

• The Consumer Credit Act 2006 (Commencement No. 1) Order 2006 (S.I. 2006/1508 (C. 52))
• The Consumer Credit Act 2006 (Commencement No. 2 and Transitional Provisions and Savings) Order 2007 (S.I. 2007/123 (C. 6))
• The Consumer Credit Act 2006 (Commencement No. 2 and Transitional Provisions and Savings) (Amendment) Order 2007 (S.I. 2007/387 (C. 14))
• The Consumer Credit Act 2006 (Commencement No. 3) Order 2007 (S.I. 2007/3300 (C. 136))
• The Consumer Credit Act 2006 (Commencement No. 4 and Transitional Provisions) Order 2008 (S.I. 2008/831 (C. 40))
• The Consumer Credit Act 2006 (Commencement No. 4 and Transitional Provisions) (Amendment) Order 2008 (S.I. 2008/2444 (C. 105))

External links

• Times Online article about the Act

UK Legislation

• Explanatory notes to the Consumer Credit Act 2006.