Consumer Credit Bill

House of Commons

Session 2004 - 05
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Other Bills before Parliament

Consumer Credit Bill

Consumer Credit Bill
Schedule 2 — Part 3A of Schedule 17 to the 2000 Act
59

Schedule 2
Section 59

Part 3A of Schedule 17 to the 2000 Act
Part 3A
The consumer credit jurisdiction
Introduction
5
16A
This Part of this Schedule applies only in relation to the consumer credit
jurisdiction.
Procedure for complaints etc.
16B   (1)
Consumer credit rules—
(a)
must provide that a complaint is not to be entertained unless the
10
complainant has referred it under the ombudsman scheme before the
applicable time limit (determined in accordance with the rules) has
expired;
(b)
may provide that an ombudsman may extend that time limit in
specified circumstances;
15
(c)
may provide that a complaint is not to be entertained (except in
specified circumstances) if the complainant has not previously
communicated its substance to the respondent and given him a
reasonable opportunity to deal with it;
(d)
may make provision about the procedure for the reference of
20
complaints and for their investigation, consideration and
determination by an ombudsman.
      (2)
Sub-paragraphs (2) and (3) of paragraph 14 apply in relation to consumer
credit rules made under sub-paragraph (1) of this paragraph as they apply
in relation to scheme rules made under that paragraph.
25
      (3)
Consumer credit rules may require persons falling within sub-paragraph (5)
to establish such procedures as the scheme operator considers appropriate
for the resolution of complaints which may be referred to the scheme.
      (4)
Consumer credit rules under sub-paragraph (3) may make different
provision in relation to persons of different descriptions or to complaints of
30
different descriptions.
      (5)
A person falls within this sub-paragraph if he is licensed by a standard
licence (within the meaning of the Consumer Credit Act 1974) to carry on to
any extent a business of a type specified in an order under section 226A(2)(e)
of this Act.
35
Fees
16C   (1)
Consumer credit rules may require a respondent to pay to the scheme
operator such fees as may be specified in the rules.
      (2)
Sub-paragraph (2) of paragraph 15 applies in relation to consumer credit
rules made under this paragraph as it applies in relation to scheme rules
40
made under that paragraph.

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Schedule 2 — Part 3A of Schedule 17 to the 2000 Act
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Enforcement of money awards
16D
A money award, including interest, which has been registered in accordance
with consumer credit rules may—
(a)
if a county court so orders in England and Wales, be recovered by
execution issued from the county court (or otherwise) as if it were
5
payable under an order of that court;
(b)
be enforced in Northern Ireland as a money judgment under the
Judgments Enforcement (Northern Ireland) Order 1981;
(c)
be enforced in Scotland as if it were a decree of the sheriff and
whether or not the sheriff could himself have granted such a decree.
10
Procedure for consumer credit rules
16E   (1)
If the scheme operator makes any consumer credit rules, it must give a copy
of them to the Authority without delay.
      (2)
If the scheme operator revokes any such rules, it must give written notice to
the Authority without delay.
15
      (3)
The power to make such rules is exercisable in writing.
      (4)
Immediately after the making of such rules, the scheme operator must
arrange for them to be printed and made available to the public.
      (5)
The scheme operator may charge a reasonable fee for providing a person
with a copy of any such rules.
20
Verification of consumer credit rules
16F   (1)
The production of a printed copy of consumer credit rules purporting to be
made by the scheme operator—
(a)
on which there is endorsed a certificate signed by a member of the
scheme operator’s staff authorised by the scheme operator for that
25
purpose, and
(b)
which contains the required statements,

is evidence (or in Scotland sufficient evidence) of the facts stated in the
certificate.
      (2)
The required statements are—
30
(a)
that the rules were made by the scheme operator;
(b)
that the copy is a true copy of the rules; and
(c)
that on a specified date the rules were made available to the public
in accordance with paragraph 16E(4).
      (3)
A certificate purporting to be signed as mentioned in sub-paragraph (1) is to
35
be taken to have been duly signed unless the contrary is shown.
Consultation
16G   (1)
If the scheme operator proposes to make consumer credit rules, it must
publish a draft of the proposed rules in the way appearing to it to be best
calculated to bring the draft to the attention of the public.
40
      (2)
The draft must be accompanied by—
(a)
an explanation of the proposed rules; and

Consumer Credit Bill
Schedule 3 — Transitional Provision and Savings
61

(b)
a statement that representations about the proposals may be made to
the scheme operator within a specified time.
      (3)
Before making any consumer credit rules, the scheme operator must have
regard to any representations made to it in accordance with sub-paragraph
(2)(b).
5
      (4)
If consumer credit rules made by the scheme operator differ from the draft
published under sub-paragraph (1) in a way which the scheme operator
considers significant, the scheme operator must publish a statement of the
difference.
Schedule 3
10
Section 68

Transitional Provision and Savings
Interpretation
1     (1)
Expressions used in the 1974 Act have the same meaning in this Schedule as
they have in that Act.
      (2)
For the purposes of this Schedule an agreement is a completed agreement
15
if—
(a)
there is no sum payable under the agreement; and
(b)
there is no sum which will or may become so payable.
Statements to be provided in relation to regulated agreements
2     (1)
Section 77A of the 1974 Act applies in relation to agreements whenever
20
made.
      (2)
Section 77A shall have effect in relation to agreements made before the
commencement of section 6 of this Act as if the period mentioned in
subsection (1)(a) were the period of one year beginning with the day of the
commencement of section 6.
25
3
Regulations made under section 78(4A) of the 1974 Act may apply in relation
to agreements regardless of when they were made.
4     (1)
Section 7(3) of this Act shall have effect in relation to agreements whenever
made.
      (2)
A dispensing notice given under section 185(2) of the 1974 Act which is
30
operative immediately before the commencement of section 7(3)—
(a)
shall, on the commencement of section 7(3), be treated as having
been given under section 185(2) as substituted by section 7(3); and
(b)
shall continue to be operative accordingly.
Default under regulated agreements
35
5
The OFT shall prepare, and give general notice of, the arrears information
sheet and the default information sheet required under section 86A of the
1974 Act as soon as practicable after the commencement of section 8 of this
Act.

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Schedule 3 — Transitional Provision and Savings
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6     (1)
Section 86B of the 1974 Act applies in relation to agreements whenever
made.
      (2)
In the application of section 86B in relation to an agreement made before the
commencement of section 9 of this Act, the conditions under subsection (1)
can be satisfied only if the two payments mentioned in paragraph (c) were
5
not required to have been made before the commencement of section 9.
      (3)
In the case of an agreement within subsection (8) of section 86B, sub-
paragraph (2) has effect as if for “two” there were substituted “four”.
7     (1)
Section 86C of the 1974 Act applies in relation to agreements whenever
made.
10
      (2)
Section 86C can apply in relation to an agreement made before the
commencement of section 10 of this Act only if the two payments mentioned
in subsection (1)(b) were not required to have been made before the
commencement of section 10.
8
Section 86E of the 1974 Act applies in relation to agreements whenever made
15
but only as regards default sums which become payable after the
commencement of section 12 of this Act.
9     (1)
Section 86F of the 1974 Act applies in relation to agreements whenever made
but only as regards default sums which become payable after the
commencement of section 13 of this Act.
20
      (2)
Where section 86F applies in relation to an agreement made before the
commencement of section 13, the agreement shall have effect as if any right
of the creditor or owner to recover compound interest in connection with the
default sum in question at a particular rate were a right to recover simple
interest in that connection at that rate.
25
10
Section 14 of this Act shall have effect in relation to any default notice served
after the commencement of that section, regardless of—
(a)
when the breach of the agreement in question occurred; or
(b)
when that agreement was made.
11
The repeal by this Act of—
30
(a)
the words “(subject to subsections (3) and (4))” in subsection (1) of
section 127 of the 1974 Act,
(b)
subsections (3) to (5) of that section, and
(c)
the words “or 127(3)” in subsection (3) of section 185 of that Act,

has no effect in relation to improperly-executed agreements made before the
35
commencement of section 15 of this Act.
12
A debtor or hirer under an agreement may make an application under
section 129(1)(ba) of the 1974 Act regardless of when that agreement was
made.
13
Section 130A of the 1974 Act applies in relation to agreements whenever
40
made but only as regards sums payable under judgments given after the
commencement of section 17 of this Act.

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Schedule 3 — Transitional Provision and Savings
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Unfair relationships
14    (1)
The court may make an order under section 140B of the 1974 Act in
connection with a credit agreement made before the commencement of
section 20 of this Act but only—
(a)
on an application of the kind mentioned in paragraph (a) of
5
subsection (2) of section 140B made at a time after the end of the
transitional period; or
(b)
at the instance of the debtor or a surety in any proceedings of the
kind mentioned in paragraph (b) or (c) of that subsection which were
commenced at such a time.
10
      (2)
But the court shall not make such an order in connection with such an
agreement so made if the agreement—
(a)
is, immediately before the commencement of section 20, a completed
agreement; or
(b)
becomes a completed agreement during the transitional period.
15
      (3)
In this paragraph—
“credit agreement”, “debtor” and “surety” shall be construed in
accordance with section 140C of the 1974 Act;
“the transitional period” means the period of one year beginning with
the day of the commencement of section 20.
20
      (4)
An order under section 68 of this Act may extend, or further extend, the
transitional period.
15    (1)
The repeal by this Act of sections 137 to 140 of the 1974 Act shall not affect
the court’s power to reopen an existing agreement under those sections as
set out in this paragraph.
25
      (2)
The court’s power to reopen an existing agreement which—
(a)
is, immediately before the commencement of section 22(3) of this
Act, a completed agreement, or
(b)
becomes a completed agreement during the transitional period,

is not affected at all.
30
      (3)
The court may also reopen an existing agreement—
(a)
on an application of the kind mentioned in paragraph (a) of
subsection (1) of section 139 made at a time before the end of the
transitional period; or
(b)
at the instance of the debtor or a surety in any proceedings of the
35
kind mentioned in paragraph (b) or (c) of that subsection which were
commenced at such a time.
      (4)
Nothing in section 16A or 16B of the 1974 Act shall affect the application of
sections 137 to 140 (whether by virtue of this paragraph or otherwise).
      (5)
The repeal or revocation by this Act of the following provisions has no effect
40
in relation to existing agreements so far as they may be reopened as set out
in this paragraph—
(a)
section 16(7) of the 1974 Act;
(b)
section 171(7) of that Act;
(c)
in subsection (1) of section 181 of that Act, the words “139(5) and
45
(7),”;

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Schedule 3 — Transitional Provision and Savings
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(d)
in subsection (2) of that section, the words “or 139(5) or (7)”;
(e)
in section 61(6) of the Bankruptcy (Scotland) Act 1985 (c. 66), the
words from the beginning to “but”;
(f)
in section 343(6) of the Insolvency Act 1986 (c. 45), the words from
the beginning to “But”;
5
(g)
Article 316(6) of the Insolvency (Northern Ireland) Order 1989 (S.I.
1989/2405 (N.I. 19)).
      (6)
In this paragraph—
“existing agreement” means a credit agreement (within the meaning of
sections 137 to 140 of the 1974 Act) made before the commencement
10
of section 22(3) of this Act;
“the transitional period” means the period of one year beginning with
the day of the commencement of section 22(3).
      (7)
An order under section 68 of this Act may extend, or further extend, the
transitional period.
15
16    (1)
It is immaterial for the purposes of section 140C(3)(a) to (c) of the 1974 Act
when (as the case may be) a credit agreement, a linked transaction or an
instrument was made.
      (2)
An order made under section 140B of the 1974 Act during the transitional
period in connection with a credit agreement shall not—
20
(a)
require a sum paid under a related agreement to which this sub-
paragraph applies to be repaid;
(b)
require a person to do or not to do (or to cease doing) anything in
connection with such an agreement;
(c)
reduce any sum which was payable under such an agreement;
25
(d)
direct the return of any property provided under such an agreement;
(e)
otherwise set aside (in whole or in part) any duty which was
imposed by virtue of such an agreement;
(f)
alter the terms of such an agreement; or
(g)
direct accounts to be taken, or (in Scotland) an accounting to be
30
made, between any persons in relation to such an agreement.
      (3)
Sub-paragraph (2) applies to a related agreement if—
(a)
it was made before the commencement of section 21 of this Act; and
(b)
immediately before the order under section 140B is made no party
has any further duties under it.
35
      (4)
An order made under section 140B after the end of the transitional period in
connection with a credit agreement shall not—
(a)
require a sum paid under a related agreement to which this sub-
paragraph applies to be repaid;
(b)
require a person to do or not to do (or to cease doing) anything in
40
connection with such an agreement;
(c)
reduce any sum which was payable under such an agreement;
(d)
direct the return of any property provided under such an agreement;
(e)
otherwise set aside (in whole or in part) any duty which was
imposed by virtue of any such agreement;
45
(f)
alter the terms of such an agreement; or
(g)
direct accounts to be taken, or (in Scotland) an accounting to be
made, between any persons in relation to such an agreement.

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Schedule 3 — Transitional Provision and Savings
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      (5)
Sub-paragraph (4) applies to a related agreement if—
(a)
it was made before the commencement of section 21; and
(b)
no party has any further duties under it where that was the case
immediately before the commencement of that section or that
became the case during the transitional period.
5
      (6)
In this paragraph “the transitional period” means the period of one year
beginning with the day of the commencement of section 21.
      (7)
An order under section 68 of this Act may extend, or further extend, the
transitional period.
17
Section 1 of this Act shall have no effect for the purposes of section 140C(1)
10
of the 1974 Act in relation to agreements made before the commencement of
section 1.
Applications for licences and fitness to hold a licence etc.
18    (1)
Section 6A of the 1974 Act shall not apply in relation to applications made
before the commencement of section 27 of this Act.
15
      (2)
Section 6(2A) of the 1974 Act shall not apply in relation to applications so
made.
      (3)
The repeal by this Act of the words “and must be accompanied by the
specified fee” in section 6(2) of the 1974 Act has no effect in relation to
applications so made.
20
19    (1)
The OFT shall prepare and publish the guidance required by section 25A of
the 1974 Act as soon as practicable after the commencement of section 30 of
this Act.
      (2)
The requirements of subsection (4) of section 25A may be satisfied in relation
to the preparation of that guidance by steps taken wholly or partly before the
25
commencement of section 30.
Further powers of OFT to regulate conduct of licensees etc.
20
The cases in which the OFT may impose requirements under section 33A of
the 1974 Act include cases where the matter with which the OFT is
dissatisfied arose before the commencement of section 38 of this Act.
30
21
The cases in which the OFT may impose requirements under section 33B of
the 1974 Act include cases where the matters giving rise to the OFT’s
dissatisfaction arose before the commencement of section 39 of this Act.
22    (1)
The OFT shall prepare and publish the guidance required by section 33E of
the 1974 Act as soon as practicable after the commencement of section 42 of
35
this Act.
      (2)
The requirements of subsection (4) of section 33E may be satisfied in relation
to the preparation of that guidance by steps taken wholly or partly before the
commencement of section 42.
Powers and duties in relation to information
40
23    (1)
Section 44 of this Act has no effect in relation to applications made before the
commencement of that section.