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Consumer Credit Act (Implementation)

Volume 927: debated on Tuesday 8 March 1977

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asked the Secretary of State for Prices and Consumer Protection if he will make a statement about implementation of the Consumer Credit Act.

I have made orders and regulations which, with one exception, require creditors and owners making regulated agreements to hold a licence granted by the Director General of Fair Trading from 1st October 1977. The exception concerns non-corporate creditors who make agreements only for credit not exceeding £30, in respect of whom I have considered it desirable to defer licensing. This deferment will be kept under review. My intention, subject to further consideration, is to make a similar deferment for credit brokers in the further stage of licensing.I have made arrangements that moneylenders and pawnbrokers whose licences expire on 31st July will not have to renew these licences on 1st August but will require a licence from the Director General from 1st October.From 16th May the provisions in the Act enabling consumers to obtain and, where appropriate, correct copies of files about them held by credit reference agencies will be effective. From the same date the courts will be given powers to reopen any personal credit agreement they consider extortionate.An essential preliminary to these steps is the identification of those consumer credit and hire agreements which are to be regulated. Accordingly, among the various orders and regulations that I have made has been an order exempting certain agreements from many of the provisions of the Act, including certain short-term credit sales and certain agreements made below a commercial rate of charge. To enable the exemption rate to be calculated I have also made regulations stipulating what charges are to be included in the total charge for credit and how the rate is to be calculated. To assist in calculations Her Majesty's Stationery Office has published a series of tables.I have placed in the Libraries of both Houses an explanatory booklet entitled "Counting the Cost of Credit", which explains and illustrates the regulations for calculating of the rate of charge. Copies are also available in the Vote Office and the Printed Paper Office.I have also made regulations setting out cases where local authority officers need the prior authorisation of the Director General before taking certain enforcement action.Consultation on the implementation of the Act will continue. Among other provisions I hope to introduce this year will be those requiring creditors to disclose their rates in most advertisements and agreements.