Consumer Credit Act 1974

138 When bargains are extortionate

(1) A credit bargain is extortionate if it—

(a) requires the debtor or a relative of his to make payments (whether unconditionally, or on certain contingencies) which are grossly exorbitant, or

(b) otherwise grossly contravenes ordinary principles of fair dealing.

(2) In determining whether a credit bargain is extortionate, regard shall be had to such evidence as is adduced concerning—

(a) interest rates prevailing at the time it was made,

(b) the factors mentioned in subsection (3) to (5), and

(c) any other relevant considerations.

(3) Factors applicable under subsection (2) in relation to the debtor include—

(a) his age, experience, business capacity and state of health; and

(b) the degree to which, at the time of making the credit bargain, he was (under financial pressure, and the nature of that pressure.

(4) Factors applicable under subsection (2) in relation to the creditor include—

(a) the degree of risk accepted by him, having regard to the value of any security provided ;

(b) his relationship to the debtor ; and

(c) whether or not a colourable cash price was quoted for any goods or services included in the credit bargain.

(5) Factors applicable under subsection (2) in relation to a linked transaction include the question how far the transaction was reasonably required for the protection of debtor or creditor, or was in the interest of the debtor.