Unaffordable Lending 
Unfair Purchase Protection

AFFORDABILITY

Before lending money to consumers, lenders must ensure that the borrowing can be repaid in a sustainable way without causing any harmful effects.

 

FAIRNESS & PURCHASE PROTECTION

Lenders must ensure that the terms of borrowing are fair and do not involve any misrepresentation. These principles not only apply to the terms of the finance itself but also to any goods or services that are purchased with the finance. The Consumer Credit Act provides many valuable purchase protections to ensure the things we buy with credit are fair and not in breach of any applicable contracts.

Section 75 (Credit Cards and Point of Sale Loans)

All purchases over £100 and below £30,000, where either full or part payment has been made with a credit card, are covered by section 75 of the Consumer Credit Act. You do not have to pay all of the total price with a credit card. Partial payments or deposits paid with a credit card still provide you with cover for the full purchase price. If your finance was a point of sale loan and the product or service was specified on the credit agreement and linked to the finance then you may be covered for over £30,000. An example of linked finance is Vehicle Hire Purchase where the finance is specifically provided and linked to the vehicle. There is no time limit on making a  claim - even if your credit card or finance has been closed. Section 75 provides valuable protection for -

 

Misrepresentation - If the service or item you purchased was not as advertised or described, then you can make a claim to recover the full purchase price.

 

Breach of Contract - If the seller of a service or product you paid does not fulfil the terms of their sales contract then you can make a claim to recover the full purchase price.

Section 140 (Credit Cards and Loans)

If your finance was taken out after April 2007 or, if started before April 2007, was still open after April 2008 then you have the benefit of "Unfair Relationship" protection. This means that if anything was unfair about the finance, or a service or product you bought with it, you can make a claim to recover some or all of your payments.