Explanatory Notes

Consumer Credit Act 2006

2006 CHAPTER 14

30 March 2006

Default under Regulated Agreements

Section 11: Failure to give notice of sums in arrears

32.Section 11 inserts a new section 86D after the new section 86C (inserted into the 1974 Act by section 10). Section 86D sets out the consequences for a creditor or owner if he fails to give a notice as required by sections 86B or 86C. If the creditor or owner fails to provide a notice of sums in arrears when required to do so, then during the period of his failure to provide the notice (i.e. from the date that it was required to be given until the end of the day on which it is eventually provided), he is not entitled to enforce the agreement. In addition, the debtor or hirer is not liable to pay any interest that relates to the period of the creditor or owner’s failure, nor is the debtor or hirer liable to pay any default sum (see the notes in respect of section 18 below) which becomes payable during that period.