Consumer Credit Act 2006

26 Enforcement of agreements by unlicensed trader etc.

(1) In section 40 of the 1974 Act (enforcement of regulated agreements made by unlicensed trader) for subsections (1) and (2) substitute—

“(1) A regulated agreement is not enforceable against the debtor or hirer by a person acting in the course of a consumer credit business or a consumer hire business (as the case may be) if that person is not licensed to carry on a consumer credit business or a consumer hire business (as the case may be) of a description which covers the enforcement of the agreement.

(1A) Unless the OFT has made an order under subsection (2) which applies to the agreement, a regulated agreement is not enforceable against the debtor or hirer if—

(a) it was made by the creditor or owner in the course of a consumer credit business or a consumer hire business (as the case may be); and

(b) at the time the agreement was made he was not licensed to carry on a consumer credit business or a consumer hire business (as the case may be) of a description which covered the making of the agreement.

(2) Where—

(a) during any period a person (the ‘trader’ has made regulated agreements in the course of a consumer credit business or a consumer hire business (as the case may be), and

(b) during that period he was not licensed to carry on a consumer credit business or a consumer hire business (as the case may be) of a description which covered the making of those agreements,

he or his successor in title may apply to the OFT for an order that the agreements are to be treated for the purposes of subsection (1A) as if he had been licensed as required.”

(2) In subsection (4) of that section—

(a) in paragraph (a) for “regulated agreements made by the trader during that period” substitute “the regulated agreements in question”;

(b) in paragraph (b) after “covering” insert “the making of those agreements during”;

(c) in paragraph (c) for “obtain a licence” substitute “be licensed as required”.

(3) In subsection (6) of that section after “This section” insert “(apart from subsection (1))”.

(4) After that subsection insert—

“(7) Subsection (1) does not apply to the enforcement of a regulated agreement by a consumer credit EEA firm unless that firm is precluded from enforcing it as a result of a prohibition or restriction mentioned in subsection (6)(a) or (b).

(8) This section (apart from subsection (1)) does not apply to a regulated agreement made by a person if by virtue of section 21(2) or (3) he was not required to be licensed to make the agreement.

(9) Subsection (1) does not apply to the enforcement of a regulated agreement by a person if by virtue of section 21(2) or (3) he is not required to be licensed to enforce the agreement.”