Consumer credit agreement meaning

In this issue: Prudential requirements Financial crime and sanctions Complaints, compensation and claims management Investigations, enforcement and discipline Regulation of capital markets Sustainable finance and ESG Banks and mutuals Investment funds and asset management UK MiFID II Consumer credit, mortgage and home finance Regulation of insurance FSMA regulated pensions activity Payment services and systems Financial Services Enforcement Database Daily and weekly news alerts Intraday news alerts New and updated content Dates for your diary Prudential requirements COREPER asked to endorse agreement on CCP concentration risk treatment After the European Parliament adopted, in April 2024, a proposal for a directive of the Parliament and the Council to amend Directive 2009/65/EC (UCITS), Directive 2013/36/EU (CRD IV) and the Investment Firms Directive (EU) 2019/2034 (IFD), the Council of the EU’s General Secretariat released an ‘I/A’ Item Note inviting the Council’s Permanent Representatives Committee (COREPER) to confirm its agreement...

Banking & Finance—July 2025 case round-up Ciddy Ltd v Natalia [2025] EWHC 1616 (Ch) Loan agreement—unenforceable penalty clause The Chancery Division dismissed the bankruptcy petition presented by the petitioner, Anjana Natalia, against the debtor, Ms Ella Vacani. The petitioner sought to recover £657,516.32 said to arise from a loan contract, asserting that the debtor, a professional accountant, had taken legal advice before signing. The debtor, by contrast, maintained that the parties’ relationship was unfair because of unequal understanding, coercive control exerted by her husband, and an excessive default interest rate that, she said, constituted an unenforceable penalty clause. The court identified substantial grounds to challenge the petition, grounded in the debtor’s allegations of an unfair relationship under the Consumer Credit Act 1974 and a penalty default term within the agreement. It held that the issues concerning default interest and unfairness were not fanciful and ought to be determined by the County Court. Accordingly, any sums due to the petitioner, if any, remain to be established in separate...

Financial services developments FCA sets out final rules for regulation of Deferred Payment Credit The Financial Conduct Authority (FCA) has released policy statement PS26/1: Regulation of Deferred Payment Credit (unregulated Buy Now Pay Later), which sets out the final rules designed to ensure borrowers receive appropriate protections when using these products, following the government’s decision to bring this sector within the FCA’s regulation. From 15 July 2026, any lender offering a Deferred Payment Credit (DPC) agreement to fund the purchase of goods or services from a merchant will come within FCA regulation. Merchants that provide their own DPC agreements directly remain outside scope. The broking of DPC agreements is also excluded. To prepare for regulation on 15 July 2026, DPC lenders should review the FCA’s final rules and implement the required updates to their systems and controls. Firms carrying on DPC activity that do not currently hold the necessary consumer credit permissions will need to register for the Temporary Permissions Regime...

Practice Note This Practice Note consists of two strands created to help dispute resolution practitioners remain up to date with developments in case law that affect their field, or which influence civil litigation procedure more generally: selected forthcoming appeals to the Supreme Court are highlighted below; see Key forthcoming appeals to the Supreme Court—2022 summaries of significant appeal decisions in England and Wales (ie rulings of the Court of Appeal and Supreme Court and, where appropriate, certain judgments of the Competition Appeal Tribunal, Judicial Committee of the Privy Council, Court of Justice of the European Union), and ECtHR, which we have covered; see: Key forthcoming appeal cases—2022 You can navigate this content using the table of contents in the left-hand margin. Alternatively, search this tracker using [CTRL]+[F]. This material is not intended to be a comprehensive register of every appeal or major decision relevant to dispute resolution practitioners. Key forthcoming appeals to the Supreme Court—2022 Tort and negligence ...

ARCHIVED: This Practice Note is archived, not maintained, and supplied for background reference only. In addition, some links may no longer direct you to the provisions as at the date this guidance was published. For information on earlier and/or subsequent CPR amendments, see: CPR updates—overview and Procedure Rule Committee minutes—overview. Responses to the questions were given by: Lord Justice Briggs—The Deputy Head of Civil Justice Mr Justice Birss—Senior Court Judge Master Roberts—Senior Court Master Mr Edward Pepperall—Barrister at St Phillips Chambers who chaired the sub-committee on the Part 36 reforms Kate Wellington—Solicitor who is chairing the sub-committee on the Debt pre-action protocol Pre-action procedure for applying for interim payments Question Answer Interim payments are needed to deal with matters including, inter alia, rehabilitation; although the Rehabilitation Code sets out a process and encourages co-operation between the parties, consensus is not always reached. Where there is no agreement under the current rules, the route is to commence proceedings...

Law firms may fall within the consumer credit regime: by entering into a consumer credit agreement as a lender, eg in relation to their fees by carrying on ancillary consumer credit activities, such as debt adjusting This Practice Note outlines how the SRA’s consumer credit framework applies to law firms. It reflects the SRA's Consumer credit toolkit and the SRA’s requirements in the SRA Financial Services (Scope) Rules and the SRA Financial Services (Conduct of Business) Rules (COB Rules). Who regulates consumer credit? Before 1 April 2014: consumer credit activities (including entering into consumer credit agreements) were overseen by the Office of Fair Trading (OFT) law firms benefited from a group licence for consumer credit work issued by the OFT to the SRA and therefore did not need an individual licence to enter into consumer credit agreements with clients or engage in ancillary consumer credit activities On 1 April 2014, the Financial Conduct Authority...

Law firms can fall within the consumer credit regime by entering a consumer credit agreement as a lender—for example, in relation to their own fees—or by undertaking ancillary consumer credit activities such as debt adjusting. This decision tree helps you determine whether particular fee arrangements with clients of a law firm amount to a consumer credit agreement. See also Practice Note: Consumer credit and client fee arrangements. For guidance on how the consumer credit regime affects law firms when carrying on ancillary consumer credit activities, see Practice Note: Law firms and ancillary consumer credit business. For a summary of the consumer credit regime as it applies to law firms, see Practice Note: Consumer credit and law firms. Select the link below to open or print the full-size PDF version...

Law firms may fall within the consumer credit regime by entering a consumer credit agreement as the lender, eg in relation to their charges, or by carrying out ancillary consumer credit activity such as debt adjustment work. This practical decision tree assists you in establishing whether you are undertaking ancillary consumer credit activity and, if so, whether a licence is required. Click below to view or print the full-size PDF version: See also Practice Note: Law firms and ancillary consumer credit business For guidance on the implications of the consumer credit regime for your firm’s fee arrangements, see Practice Note: Consumer credit and client fee arrangements. For an overview of how the consumer credit regime applies to law firms, please see Practice Note: Consumer credit and law firms...

There are a number of points to weigh up when determining if a consumer credit agreement is regulated by the Consumer Credit Act 1974 (CCA 1974). Under the CCA 1974, s 8(1), a consumer credit agreement is described as an agreement between an individual (“the debtor”) and any other person (“the creditor”) whereby the creditor extends credit of any amount...

What is the regulatory regime under the Financial Services and Markets Act 2000 (FSMA 2000) Under section 19 of the Financial Services and Markets Act 2000, the general prohibition applies: a person must not carry on a regulated activity in the UK, or even purport to do so, unless they are within one of the permitted categories below. An authorised person (that is, authorised by the Prudential Regulation Authority and/or the Financial Conduct Authority) An exempt person (for example, an appointed representative) For an outline of the UK regime governing regulated activities, see Practice Note: What are regulated activities? An activity is regulated if it is of a ‘specified kind’—as listed in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO 2001), SI 2001/544—and it is carried on by way of business. For further detail on what amounts to carrying on a regulated activity ‘by way of business’ in the UK, refer to Practice Notes: What does ‘by...

Key legal issues for guarantees Guarantees constitute contracts and must accordingly meet the four essential elements of a contract, namely: offer acceptance consideration the intention to create legal relations As a rule in law, consideration given in the past is ordinarily insufficient. A firm ought not to take a guarantee once it has already agreed to supply services to a client in question. The guarantee must also comply fully with s.4 of the Statute of Frauds 1677. It must thus be recorded in writing and properly signed by the guarantor as required. The Firm should also be alert to potential claims of misrepresentation, duress, and undue influence. It is sound practice to see that the guarantor receives independent legal advice on the implications of giving the guarantee. Is the guarantee a regulated credit agreement? Where undertaken by way of business in the United Kingdom, entering into a regulated credit agreement may potentially amount to a regulated activity under...