Consumer Credit Bill

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

Consumer Credit Bill

Consumer Credit Bill
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Funding of ombudsman scheme
In Part 16 of the 2000 Act after section 234 insert—
“234A
Funding by consumer credit licensees etc.
(1)
For the purpose of funding—
(a)
the establishment of the ombudsman scheme so far as it relates
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to the consumer credit jurisdiction (whenever any relevant
expense is incurred), and
(b)
its operation in relation to the consumer credit jurisdiction,

the scheme operator may from time to time with the approval of the
Authority determine a sum which is to be raised by way of
10
contributions under this section.
(2)
A sum determined under subsection (1) may include a component to
cover the costs of the collection of contributions to that sum (‘collection
costs’) under this section.
(3)
The scheme operator must notify the OFT of every determination
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under subsection (1).
(4)
The OFT must give general notice of every determination so notified.
(5)
The OFT may by general notice impose requirements on—
(a)
licensees to whom this section applies, or
(b)
persons who make applications to which this section applies,
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to pay contributions to the OFT for the purpose of raising sums
determined under subsection (1).
(6)
The amount of the contribution payable by a person under such a
requirement—
(a)
shall be the amount specified in or determined under the
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general notice; and
(b)
shall be paid before the end of the period or at the time so
specified or determined.
(7)
A general notice under subsection (5) may—
(a)
impose requirements only on descriptions of licensees or
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applicants specified in the notice;
(b)
provide for exceptions from any requirement imposed on a
description of licensees or applicants;
(c)
impose different requirements on different descriptions of
licensees or applicants;
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(d)
make provision for refunds in specified circumstances.
(8)
Contributions received by the OFT must be paid to the scheme
operator.
(9)
As soon as practicable after the end of—
(a)
each financial year of the scheme operator, or
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(b)
if the OFT and the scheme operator agree that this paragraph is
to apply instead of paragraph (a) for the time being, each period
agreed by them,

the scheme operator must pay to the OFT an amount representing the
extent to which collection costs are covered in accordance with
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subsection (2) by the total amount of the contributions paid by the OFT
to it during the year or (as the case may be) the agreed period.
(10)
Amounts received by the OFT from the scheme operator are to be
retained by it for the purpose of meeting its costs.
(11)
The Secretary of State may by order provide that the functions of the
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OFT under this section are for the time being to be carried out by the
scheme operator.
(12)
An order under subsection (11) may provide that while the order is in
force this section shall have effect subject to such modifications as may
be set out in the order.
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(13)
The licensees to whom this section applies are licensees under standard
licences which cover to any extent the carrying on of a type of business
specified in an order under section 226A(2)(e).
(14)
The applications to which this section applies are applications for—
(a)
standard licences covering to any extent the carrying on of a
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business of such a type;
(b)
the renewal of standard licences on terms covering to any extent
the carrying on of a business of such a type.
(15)
Expressions used in the Consumer Credit Act 1974 have the same
meaning in this section as they have in that Act.”
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Consequential amendments relating to ombudsman scheme
(1)
In section 4 of the 1974 Act (OFT to disseminate information and advice) after
“the operation of this Act,” insert “the consumer credit jurisdiction under Part
16 of the Financial Services and Markets Act 2000,”.
(2)
In section 227(2)(e) of the 2000 Act (conditions for exercise of voluntary
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jurisdiction) after “jurisdiction” insert “or the consumer credit jurisdiction”.
(3)
In sections 228(1) and 229(1) of that Act (determinations and awards by
ombudsman) after “jurisdiction” insert “and to the consumer credit
jurisdiction”.
(4)
In subsection (4) of section 229 of that Act (awards by ombudsman) after
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“specify” insert “for the purposes of the compulsory jurisdiction”.
(5)
After that subsection insert—
“(4A)
The scheme operator may specify for the purposes of the consumer
credit jurisdiction the maximum amount which may be regarded as fair
compensation for a particular kind of loss or damage specified under
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subsection (3)(b).”
(6)
In subsection (8)(b) of that section after “17” insert “or (as the case may be) Part
3A of that Schedule”.
(7)
For subsection (11) of that section substitute—
“(11)
‘Specified’ means—
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(a)
for the purposes of the compulsory jurisdiction, specified in
compulsory jurisdiction rules;

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(b)
for the purposes of the consumer credit jurisdiction, specified in
consumer credit rules.
(12)
Consumer credit rules under this section may make different provision
for different cases.”
(8)
In section 230 of that Act (costs)—
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(a)
in subsection (1) after “jurisdiction” insert “or the consumer credit
jurisdiction”;
(b)
in subsection (7) after “17” insert “or (as the case may be) paragraph
16D of that Schedule”.
(9)
In section 353(1) of that Act (power to permit disclosure of information) after
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paragraph (b) insert—
“(c)
by the scheme operator to the Office of Fair Trading for the
purpose of assisting or enabling that Office to discharge
prescribed functions under the Consumer Credit Act 1974.”
(10)
In Schedule 17 to that Act (the ombudsman scheme)—
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(a)
in paragraph 3(4) after “227” insert “, the function of making consumer
credit rules, the function of making determinations under section
234A(1)”;
(b)
in paragraph 7(2) after “compulsory jurisdiction” insert “, functions in
relation to its consumer credit jurisdiction”;
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(c)
in paragraph 9(3) after “compulsory” insert “, consumer credit”;
(d)
in paragraphs 10(1) and 11 after “jurisdiction” insert “or to the
consumer credit jurisdiction”.
Miscellaneous
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Monitoring of businesses by OFT
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In section 1(1) of the 1974 Act (general functions of OFT) after paragraph (b)
insert—
“(ba)
to monitor, as it sees fit, businesses being carried on under
licences;”.
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Disapplication of s.101 of the 1974 Act
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(1)
In section 101 of the 1974 Act (right of hirer to terminate regulated consumer
hire agreement) after subsection (8) insert—
“(8A)
If it appears to the OFT that it would be in the interests of hirers to do
so, it may by general notice direct that, subject to such conditions (if
any) as it may specify, this section shall not apply to a consumer hire
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agreement if the agreement falls within a specified description; and this
Act shall have effect accordingly.”
(2)
In subsection (8) of that section for the words from “this section” onwards
substitute “, subject to such conditions (if any) as it may specify, this section
shall not apply to consumer hire agreements made by the applicant; and this
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Act shall have effect accordingly”.

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Determinations etc. by OFT
For section 183 of the 1974 Act (determinations etc. by OFT) substitute—
“183
Determinations etc. by OFT
(1)
The OFT may vary or revoke any determination made, or direction
given, by it under this Act.
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(2)
Subsection (1) does not apply to—
(a)
a determination to issue, renew or vary a licence;
(b)
a determination to extend a period under section 28B or to
refuse to extend a period under that section;
(c)
a determination to end a suspension under section 33;
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(d)
a determination to make an order under section 40(2), 148(2) or
149(2);
(e)
a determination mentioned in column 1 of the Table in section
41.”
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Sums received by OFT
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In section 190(2) of the 1974 Act (fees received by OFT to be paid into the
Consolidated Fund) after “fees” insert “, charges, penalties or other sums”.
Final provisions
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Financial provision
There shall be payable out of money provided by Parliament—
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(a)
any expenditure incurred by a Minister of the Crown or the Office of
Fair Trading by virtue of this Act; and
(b)
any increase attributable to this Act in the sums payable out of money
so provided by virtue of any other Act.
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Interpretation
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In this Act—
“the 1974 Act” means the Consumer Credit Act 1974 (c. 39);
“the 2000 Act” means the Financial Services and Markets Act 2000 (c. 8).
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Consequential amendments
(1)
The Secretary of State may by order made by statutory instrument make such
30
modifications of—
(a)
any Act or subordinate legislation (within the meaning of the
Interpretation Act 1978 (c. 30)), or
(b)
any Northern Ireland legislation or instrument made under such
legislation,
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as he thinks fit in consequence of any provision of this Act.
(2)
An order under this section may include transitional or transitory provisions
and savings.

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(3)
A statutory instrument containing an order under this section is subject to
annulment in pursuance of a resolution of either House of Parliament.
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Transitional provision and savings
(1)
Schedule 3 (which sets out transitional provision and savings) has effect.
(2)
The Secretary of State may by order made by statutory instrument make such
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transitional or transitory provisions and savings as he thinks fit in connection
with the coming into force of any provision of this Act.
(3)
An order under this section may (amongst other things)—
(a)
where a provision of this Act is brought into force for limited purposes
only, make provision about how references in Schedule 3 to the
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commencement of that provision of this Act are to apply;
(b)
make provision for or in connection with the application of any
provision of this Act in relation to—
(i)
things existing or done, or
(ii)
persons who have done something or in relation to whom
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something has been done,

before the coming into force of that provision of this Act.
(4)
An order under this section may—
(a)
modify any Act or any subordinate legislation (within the meaning of
the Interpretation Act 1978 (c. 30));
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(b)
modify any Northern Ireland legislation or any instrument made under
such legislation;
(c)
make different provision for different cases.
(5)
Schedule 3 does not restrict the power under this section to make transitional
or transitory provisions or savings.
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Repeals
The enactments and instruments set out in Schedule 4 are repealed or revoked
to the extent shown in that Schedule.
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Short title, commencement and extent
(1)
This Act may be cited as the Consumer Credit Act 2005.
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(2)
This Act (apart from this section) shall come into force on such day as the
Secretary of State may by order made by statutory instrument appoint; and
different days may be appointed for different purposes.
(3)
This Act extends to Northern Ireland.