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Consumer Credit Act 2006 - Essay Example
The Consumer Credit Act 2006 amending the original act 1974 seeks to rectify deficiencies that have led to the exploitation of consumers by the lenders and unequal or unfair relationship between them giving lenders undue advantage. The financial limit of 25,000 has been removed in keeping with the changing credit needs of the borrowers in a consumption economy…
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. ...