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If your business offers consumer credit or product leases, or is thinking of offering them, then there are numerous highly technical regulations made under The Consumer Credit Act 1974 and the Consumer Credit Act 2006 which will affect your business.
To get an idea on what actions you need to take, or for help preparing consumer credit or leasing agreements, our expert commercial team can offer you a free initial no obligation discussion, giving you clear direction on how to proceed.
We have seen that better outcomes are achieved when one of our experienced solicitors are brought in at an early stage, before costly mistakes are made, so get in contact today for a no obligation discussion. Below you will find some background information on the legal facts surrounding this area of the law, to help you get an idea of your options.
- The regulations made under The Consumer Credit Act 1974 and The Consumer Credit Act 2006 have resulted in a complex web of legislation governing regulated consumer credit and consumer hire agreements, advertisements for credit and hire facilities, notices and statements issued during the lifetime of agreements and debt collection procedures.
- Outside the scope of the Consumer Credit Acts in the commercial environment is the equally complicated concept of “Equipment Leasing” which is the general term applied to various contracts which have one thing in common – the hirer receives possession of the goods the subject of the hire and the right to use them in return for payment of rental to the user, generally by instalments – the owner is the bailor and the hirer is the bailee. Equipment leasing covers two main types of contract:
- Finance Leases – where the owner or bailor receives the whole of the cost of goods and its profit in the form of the rentals agreed to be paid during the course of the agreement. This usually enables the owner to claim capital allowances so the cost of purchase can be written off through its books.
- Operating Leases – these are effectively all leases other than Finance Leases. In essence the rental under these agreements is a measure of the demand for the goods in the market, not the cost of acquisition. Operating leases will, therefore, often contain provisions for the owner to provide maintenance and insurance cover.
We can advise you about or prepare for you both Consumer Credit Agreements and Equipment Leases.