Consumer Credit Dispute Solicitors
A credit agreement that is improperly executed, a lender pursuing a debt it cannot legally enforce, or a finance company that is jointly liable for a trader's breach — consumer credit law has specific rules that protect you.
Consumer credit disputes arise from unenforceable credit agreements, section 75 credit card claims, unfair relationship claims against lenders, disputes with lenders over default notices, and disputes over the conduct of secured lending. The Consumer Credit Act 1974 provides a detailed framework of formalities and protections — an agreement that does not comply with the Act may be unenforceable without a court order, and some agreements cannot be enforced at all. A solicitor will identify the specific statutory protection that applies and advise on the appropriate remedy.
Types of Consumer Credit Dispute
Consumer credit disputes — the statutory protections and how they work in practice.
The Consumer Credit Act 1974 creates a detailed set of protections for consumer borrowers. A solicitor will identify which protections apply to the specific agreement and advise on the appropriate challenge or claim.
Section 75 — credit card company joint liability
Under section 75 of the Consumer Credit Act 1974, a credit card company is jointly and severally liable with the supplier for any misrepresentation or breach of contract where: the purchase is between £100 and £30,000; and the credit card is used to pay part or all of the purchase price. This means the card company is equally liable alongside the supplier — and the consumer can pursue the card company directly, without first pursuing the supplier. Section 75 applies even where only a deposit was paid by credit card. A solicitor will pursue the credit card company directly where the supplier is insolvent, unresponsive, or has refused the claim.
Unenforceable credit agreements
A regulated credit agreement must be in a specific prescribed form — set out in the Consumer Credit (Agreements) Regulations. Agreements that do not contain all the prescribed terms (credit limit, interest rate, repayment terms) may be improperly executed and, as a result, unenforceable without a court order. Some categories of improperly executed agreement cannot be enforced at all, regardless of a court order. A solicitor will review the agreement against the prescribed form requirements and advise on whether enforcement can be challenged on the basis of improperly executed documentation.
Unfair relationship — section 140A
Section 140A of the Consumer Credit Act 1974 gives the court a broad power to re-open credit agreements where the relationship between the creditor and debtor is unfair — because of the terms of the agreement, the way the creditor has exercised its rights, or anything else done by or on behalf of the creditor. Unfair relationships have been found where: lenders were paid secret commissions by credit brokers; PPI commissions were not disclosed; interest rates were set in a way that was not transparent; and high-cost credit was extended to borrowers who could not afford it. A solicitor will assess whether an unfair relationship claim applies and advise on the remedy — which can include reduction of the balance, refund of excessive charges, and rescission.
Disputes with lenders over default notices
Before a creditor can terminate a regulated credit agreement — and pursue the full outstanding balance or repossess goods — it must serve a valid default notice in the prescribed form, giving the debtor at least 14 days to remedy the breach. A default notice that fails to state the correct amount required to remedy the breach, or that gives less than 14 days, is defective — and a creditor who terminates an agreement without a valid default notice commits repudiatory breach. A solicitor will review any default notice served and advise on whether it meets the statutory requirements — and whether the creditor's subsequent enforcement action can be challenged.
Voluntary termination of hire purchase agreements
Under section 99 of the Consumer Credit Act 1974, a debtor under a hire purchase or conditional sale agreement has a statutory right to voluntarily terminate the agreement at any time before the final payment falls due — by returning the goods and paying the difference between the amount paid and 50% of the total amount payable. The creditor cannot impose any contractual penalty for voluntary termination, and cannot charge for damage beyond fair wear and tear. A solicitor will advise on the right to voluntary terminate, the correct amount payable, and will challenge any attempt by the creditor to charge penalties or excessive damage costs above the statutory entitlement.
Disputes over credit file — incorrect default and adverse entries
An incorrect default on a credit file — recording a debt that is disputed, or recording a default where the correct notice was not served — causes real financial loss and can prevent the consumer from obtaining credit. The Information Commissioner's Office (ICO) and the credit reference agencies (Experian, Equifax, TransUnion) have processes for challenging incorrect entries. A solicitor will advise on the dispute process with the lender and the credit reference agency, and will pursue a claim for financial loss caused by an incorrect adverse credit entry — including under the UK GDPR for inaccurate personal data.