Consumer Credit Act 2006 Essay Example | Topics and Well Written Essays - 4000 words

Consumer Credit Act 2006 - Essay Example The Office of Fair Trading has been given powers of superintendence over the activities and licensing of the lenders and others involved in allied activities. The lenders have also been given the relief of approaching the court for enforcing improperly executed agreement without procedural formalities having been complied with. Overall the Consumer Credit Act 2006 is a fair measure to both parties concerned and in no way appears to give consumers any undue advantage over the creditors. Consumer Credit Act 2006 is an amendment act of Consumer Credit Act of 1974 having a long history. The amendment was necessitated to provide for certain reforms in consumer credits and consumer hire agreement along with exemptions. Besides, it seeks licensing of all the related activities, empowering debtors to act against unfair relationship with the creditors and creation of an Ombudsman scheme to reddressal for complaints under the 1974 Act as amended up to date. This paper seeks to enquire whether the amendment act of 2006 is going too far to protect the consumers against the creditors and suppliers. Hence principles of Consumer Credit Act 2006 will be examined and whether the act gives too much leverage to the consumers who are the debtors to the detriment of creditors and suppliers. Literature review is a part of methodology of qualitative research. ... Hence principles of Consumer Credit Act 2006 will be examined and whether the act gives too much leverage to the consumers who are the debtors to the detriment of creditors and suppliers. Chapter 2 .Literature Review Literature review is a part of methodology of qualitative research. It forms the secondary data required for the research. The aim of the present study will be largely facilitated by review of literature on the subject chosen for the research; that is whether consumer credit act of 2006 has gone too far in pampering the consumers/debtors with too many privileges to the disadvantage of the suppliers/creditors. Background Expananotory note to the act of 2006 state that Government mooted in 2001 review of the 1974 Act through consultations with the interested parties on the impact of the then existing rules regarding information disclosure, premature settlement, unfair credit transactions, licensing of consumer credit agencies, financial limits beyond the coverage of 1974 Act and consumer reddressal mechanism. Following this, a white paper was published in December 2003 captioned "Fair, Clear and Competitive - The Consumer Credit Market in the 21st Century". At the time Government had been seized of the problem of over-indebtedness and trying to find solution to it by consultations with the industry, representatives of the consumers and advisers, as a sequel to which Department of Trade and Industry (DTI) and Department for Work and Pensions jointly brought out paper entitled "Tackling Over-Indebtedness- Action Plan 2004". The major issues encompassed by the 2006 Act are 1) how consumer credit agreemen ts and consumer hire