The consumer credit landscape has diametrically changed over the last 50 years and is ill adapted to deal with today's technology, where the internet has revolutionised how we communicate, shop and manage our finances.[1] The consultation of the reform of the 1974 Act states, "the time is now right...to fundamentally reform the approach to the regulation of the consumer credit in the UK".[2] To incorporate the provisions of the 1947 Act to the Financial Conduct Authority ("FCA") general rules[3] to modernize consumer credit regulations, continue to maintain high levels of the consumer protection and reduce costs to firm.

The FCA Reform Consultation Paper[4] a notable area of contention is section 75[5], the UK Government has recognized this is of outmost importance to the industry and provides consumer confidence, and while respondents felt that section 75 could be modernised, it will most likely remain in law if the protection cannot be replicated under the FCA powers,[6] as notably there is lack of clarity of how section 75 protection really works e.g. where the debtor-creditor-supplier chain has been broken through a third party transaction, resulting in consumers thinking they are protected when they are not.[7] Respondents also recommended that credit card firms should be liable for the amount of credit provided not the total cost of the item or service.[8]

Other areas recommended for reform includes voluntary termination of a hire-purchase or conditional sale agreement[9] which industry stakeholders feel that widespread use of this provision has led to higher prices, while the consumer groups argued that it supported customers experiencing financial difficulty.[10]

Industry Stakeholders felt that the unfair relationships[11] provision should be redrafted to improve operability, however consumers felt that it provides a strong mechanism that allows the courts to go further than the Financial Ombudsman Service.[12]

The Woolard Review also looked at reform through the importance of implementing rules for new credit such as Buy Now Pay Later "BNPL" credits as BNPLs represents significant potential to consumer harm.[13]

[1] HM Treasury, 'Reforming the Consumer Credit Act 1974 :Consultation Response' (2023) OGL < https://assets.publishing.service.gov.uk/media/64ad0cfcc933c10012f9e076/CCA_consultation_response_-_v7__new_format_.pdf> accessed 18 April 2024

[2] ibid

[3] Financial Services and Market Act 2000, s 137A

[4] Financial Conduct Authority, 'Review of retained provisions of the Consumer Credit Act: Final report', s 2.4, (Mar 2019) <https://www.fca.org.uk/publication/corporate/review-of-retained-provisions-of-the-consumer-credit-act-final-report.pdf> accessed 18 Apr 2024

[5] Consumer Credit Act 1974, s 75

[6] HM Treasury, 'Reforming the Consumer Credit Act 1974 :Consultation Response', s 3.30, (2023) OGL < https://assets.publishing.service.gov.uk/media/64ad0cfcc933c10012f9e076/CCA_consultation_response_-_v7__new_format_.pdf> accessed 18 April 2024)

[7] ibid 3.32

[8] ibid

[9] Consumer Credit Act 1974, ss 99 and 100

[10] HM Treasury, 'Reforming the Consumer Credit Act 1974 :Consultation Response', s 3.36, (2023) OGL < https://assets.publishing.service.gov.uk/media/64ad0cfcc933c10012f9e076/CCA_consultation_response_-_v7__new_format_.pdf> accessed 18 April 2024)

[11] Consumer Credit Act 1974, ss 140A and 140B

[12] HM Treasury, 'Reforming the Consumer Credit Act 1974 :Consultation Response', ss 3.38 and 3.39, (2023) OGL < https://assets.publishing.service.gov.uk/media/64ad0cfcc933c10012f9e076/CCA_consultation_response_-_v7__new_format_.pdf> accessed 18 April 2024)

[13] Financial Conduct Authority, 'The Woolard Review - A review of change and innovation in the unsecured credit market' (Feb 2021) < woolard-review-report.pdf > accessed 18 April 2024

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.