Your Key Rights Under the Consumer Credit Act 1974
💳Section 75 — credit card provider joint liability — where you paid for goods or services by credit card and the cash price was between £100 and £30,000, the credit card provider is jointly and severally liable with the trader for any breach of contract or misrepresentation. The claim is against the card company directly — you do not need to pursue the trader first. This applies where the trader has delivered defective goods, failed to deliver at all, or gone into administration.
⚖️Section 140A — unfair credit relationships — where the terms of a credit agreement, the creditor's conduct before or after the agreement, or any related transaction make the relationship between the creditor and debtor unfair to the debtor, the court can reopen the agreement and order repayment, reduction of sums owed, or return of property. This is the primary route for challenging irresponsible lending, excessive interest rates, and undisclosed commission.
📋Section 56 — antecedent negotiations — statements made by a supplier (for example, a car dealer) in the course of antecedent negotiations with the debtor about a debtor-creditor-supplier (DCS) agreement are deemed to be made as agent of the creditor. Misrepresentations made by a car dealer that induced the consumer to take out a PCP or HP agreement with a finance company can be attributed to the finance company under s.56.
📱Section 62/63 — failure to comply with formalities — a regulated credit agreement that does not comply with the formalities prescribed by the CCA 1974 (prescribed terms, proper copies, credit reference agency notices) is unenforceable against the debtor unless the court makes an enforcement order. Failure to comply with the formalities is a complete defence to a lender's claim.
PCP and HP Finance Disputes
Personal contract purchase (PCP) and hire purchase (HP) finance agreements for vehicles are the most common regulated consumer credit agreements in the UK. Disputes arise in several ways:
🚗Discretionary commission arrangements (DCA) — between 2014 and 2021, many motor finance providers allowed dealers to set the interest rate on PCP/HP agreements and receive a higher commission where they set a higher rate. The FCA's review (January 2024) found these arrangements were likely unfair under s.140A — creating a widespread mis-selling claim for consumers who unknowingly paid above the market rate because of undisclosed DCA.
🔧Faulty vehicle — rejection and finance — where a vehicle purchased on PCP or HP is faulty and rejected under the Consumer Rights Act 2015, the rejection also terminates the finance agreement and triggers a refund of the deposit and all payments made. The finance company is jointly liable with the dealer under s.75 CCA 1974 and handles the refund — providing a route even where the dealer is unwilling or unable to cooperate.
💰Voluntary termination rights — under s.99 CCA 1974, a debtor under a regulated HP or conditional sale agreement may terminate the agreement at any time before the final payment by giving written notice to the creditor. Where at least half the total price has been paid (or the shortfall is paid), the debtor may return the vehicle. Lenders frequently attempt to charge excessive return/damage charges on voluntary termination — these charges can be challenged.
📉Irresponsible lending — a lender who provided credit without adequate assessment of the debtor's ability to repay — contrary to FCA CONC affordability rules — may have created an unfair relationship under s.140A. Where the debtor was placed in financial difficulty because the lender ought to have known they could not afford the credit, the lender's conduct in entering and administering the agreement is challengeable.
Frequently Asked Questions
Does s.75 apply to purchases made abroad?
Yes — section 75 of the Consumer Credit Act 1974 can apply to overseas purchases made on a UK credit card, provided the cash price of the goods or service was between £100 and £30,000 and the credit agreement was made in the UK. This has been confirmed by the courts: the place of the transaction is the UK credit agreement, not the location of the foreign seller. This makes s.75 particularly valuable for failed holiday bookings, foreign goods that were not delivered, and purchases from foreign online retailers where a UK credit card was used.
Can I claim under s.75 where I paid a deposit only on the card?
Yes — section 75 applies to the whole transaction even if only a partial payment (including a deposit) was made by credit card, provided the credit card payment was "in respect of" a transaction where the total cash price was between £100 and £30,000. There is no requirement that the whole price was paid by card — a deposit of £1 paid by credit card for a holiday costing £5,000 gives a s.75 claim for the full £5,000 against the card provider. However, this was disputed before the courts, and a solicitor advises on the applicable authority for your specific facts.
What is the Plevin principle and does it still apply after the PPI deadline?
Yes — the Plevin v Paragon Personal Finance [2014] Supreme Court principle that an undisclosed, disproportionately high commission paid to a lender or broker on a PPI policy creates an unfair relationship under s.140A CCA 1974 remains good law. Although the FCA's PPI complaint deadline was August 2019, certain Plevin-based claims and other credit-related unfair relationship claims may still be available. The s.140A route is also central to the motor finance DCA mis-selling claims currently being considered by the FOS and the courts.
The finance company has demanded payment of a default notice — what are my rights?
A regulated credit agreement cannot be enforced through the courts before the creditor has served a default notice that complies with s.87 of the CCA 1974 — giving 14 days for the debtor to remedy the default. The default notice must be in the prescribed form; failure to comply with the formalities renders the default notice invalid and the agreement unenforceable until a valid notice is served. A solicitor advises on the validity of the default notice, any defences available, and the debtor's rights if they are in genuine financial difficulty (including Time Orders under s.129 CCA 1974).
Can I use the Financial Ombudsman Service for a consumer credit dispute?
Yes — the FOS has jurisdiction over complaints against FCA-regulated creditors, including banks, credit card providers, and motor finance companies. The FOS considers whether the creditor's conduct was fair and reasonable — including whether lending was irresponsible, whether commission was adequately disclosed, and whether the agreement was administered fairly. The FOS is free to consumers and awards up to £415,000 per complaint. A solicitor advises on whether the FOS or civil proceedings is the more effective route for your specific claim.