The Consumer Credit Act 1974 (CCA) has been a key piece of legislation in the UK, aiming to regulate consumer credit agreements and protect consumers from unfair practices. However, recent criticisms from the credit industry suggest that the Act may be outdated and biased towards consumers and consumer groups. In this forum, we will critically assess this assertion, considering various aspects of the CCA and its impact on both consumers and creditors[1].

That being said one of the most contentious aspects of the CCA is Section 75, which holds credit card companies jointly liable with retailers for breaches of contract or misrepresentations. While this provision offers important protection for consumers, critics argue that it places undue burdens on credit providers, especially in cases where the retailer is no longer in business. This raises questions about the practicality and fairness of Section 75 in today's credit landscape.

Moreover it needs to be understood that before the CCA was introduced, consumer credit was largely unregulated, leading to widespread exploitation of consumers by unscrupulous lenders. The CCA was designed to address these issues and provide a legal framework for fair lending practices. However, it could be argued that the Act may now be outdated, failing to account for the evolution of the credit industry as well as emerging financial products and services.

Essentially the CCA was established to protect consumers from unfair lending practices and promote responsible lending[2]. However, interpreting creditor's liability under the Act has proven challenging, leading to a lack of clarity and consistency in court decisions. This has created uncertainty for both consumers and creditors, highlighting the need for updates or revisions to the law[3].

Although over the years, various court cases have influenced the interpretation of creditor's liability under the CCA, such as Wilson v First County Trust Ltd (No 2) [2003] UKHL 40, where the House of Lords clarified the scope of Section 75[4], holding that the creditor must be 'the supplier of the goods or services' for the section to apply[5]. These cases have varied in their approach, leading to a lack of consistency and predictability in this area of law. Critics argue that the law needs to be more coherent and consistent to provide clarity for all parties involved.

As previously mentioned while the CCA provides various protections for consumers, such as the right to cancel[6] certain credit agreements and protections against harassment by creditors, critics argue that it may be overly biased in favor of consumers. This raises questions about the balance between protecting debtors and safeguarding creditors' interests under the Act.

In addition to the Consumer Credit Act 1974, the legal framework for consumer protection in the UK has been further strengthened by the Consumer Rights Act 2015[7]. This Act introduced comprehensive provisions to protect consumers in various aspects of consumer transactions, including unfair contract terms, digital content, and services. While the Consumer Rights Act 2015 does not specifically address consumer credit agreements regulated by the Consumer Credit Act 1974, it reflects the ongoing efforts to enhance consumer rights and ensure fair treatment in the marketplace.

In conclusion, the debate surrounding the Consumer Credit Act 1974 is complex, with valid arguments on both sides. While the Act has undoubtedly provided important protections for consumers, criticisms from the credit industry suggest that it may need to be updated or reformed to better balance the interests of consumers and creditors in today's credit landscape. This forum aims to explore these issues further and foster a constructive dialogue on the future of consumer credit regulation in the UK.

[1] Consumer Credit Act 1974

[2] Consumer Credit Act 1974, s140

[3] HM Treasury, 'UK commits to reform of the Consumer Credit Act' (GOV.UK, 16 June 2022) accessed 15 April 2024.

[4] Consumer Credit Act 1974, s75

[5] Wilson v First County Trust Ltd (No 2) [2003] UKHL 40

[6] Consumer Credit Act 1974, s56

[7] Consumer Rights Act 2015

Respond to the above using OSCOLA references. You may address aspects which include the following:

Consider the application of section 75. Consider the position prior to the establishment of the Act. Consider the reason for establishing the CCA and aspects relating to creditor's liability which have proved difficult to interpret. Assess the different cases on creditor's liability and how they have influenced the development of the statute. Consider whether the law offers protection for debtors and how the law balances the interest of creditors.