Modifying consumer credit legislation
Section 25: Exemption from Consumer Credit Act 1974 in relation to credit to business debtors
90.This section amends section 16B of the Consumer Credit Act 1974 to provide that the Act does not regulate consumer credit agreements in the form of green deal plans where the agreement is exclusively for business purposes and the credit does not exceed a sum of £25,000.
91.Subsections (2) to (4) contain the insertions to the Act.
Section 26: Energy suppliers not to be treated as carrying on ancillary credit business
92.This section amends the Consumer Credit Act 1974 so as to exempt energy suppliers from the need to obtain an Office of Fair Trading licence in carrying out the functions required of them under the Green Deal.
93.Subsection (4) of section 21 of that Act exempts energy suppliers from the need for a licence where they are carrying out functions comprising or relating to debt-adjusting, debt-counselling, debt-collecting or debt administration, in relation to payments due under a green deal plan associated with the supplier.
94.Subsection (5) of that section specifies that a green deal plan is associated with a supplier where a supplier is collecting payments under that plan.
95.Subsection (6) of that section defines the terms ‘green deal plan’ and ‘relevant energy supplier’ by reference to sections 1 and 2 of this Act.
Section 27: Duties to give debtors information and statements.
96.This section amends sections 77, 77A and 77B of the Consumer Credit Act 1974 so that, in respect of green deal plans, the obligations placed on creditors to provide debtors with statements periodically and on request can be met by a third party acting on behalf of the creditor.
97.Subsections (2) to (4) contain the insertions to be made.
Section 28: Exemption from requirement to give notice of sums in arrears
98.This section amends section 86B of the Consumer Credit Act 1974 so that, in the context of green deal plans, creditors are exempt from the requirement to give debtors notice of sums in arrears. This section provides for subsection (12) of section 86B of the Consumer Credit Act 1974 to be replaced by new subsections (12) to (12B).
Section 29: Early repayment of Green Deal finance
99.The Consumer Credit Act 1974 already allows creditors to receive limited compensation in the event of a customer choosing to repay a credit agreement early. This section amends the Consumer Credit Act 1974 so that Green Deal Providers are able to receive compensation up to what is allowed under the Consumer Credit Directive. Subsection (1) of the new section 95B of that Act sets out the circumstances in which enhanced compensation is available. The rate of interest under the credit agreement must be fixed; the agreement must be a green deal plan which lasts for a specified duration; and the debtor must be discharging all or part of his indebtedness during the fixed rate period. Subsection (2) states that this compensation can only be claimed if the early repayment amount is not paid from the proceeds of a contract of payment protection insurance, and if the agreement satisfies other conditions that may be set out in regulations. Subsection (3) states that the amount claimed as compensation must be fair, objectively justified, and calculated in accordance with provision made in regulations. The amount claimed must also not exceed what the debtor would have paid in interest had the agreement not been repaid early. Subsection (4) allows the creditor to choose whether they wish to claim compensation from a customer under the existing Consumer Credit Act provisions in section 95A or under this new section 95B in circumstances where both provisions apply.
100.Subsections (3) and (4) of section 29 make consequential amendments to the Consumer Credit Act 1974.
Section 30: Power to amend Consumer Credit Act 1974
101.This section enables the Secretary of State, following consultation with the Office of Fair Trading and such other persons as the Secretary of State considers appropriate, to amend the Consumer Credit Act 1974 in consequence of the provision made by or under Chapter 1.