This weekend the Office of Fair Trading (OFT) issued a warning to consumers that businesses claiming to use sections 77 - 79 of the Consumer Credit Act 1974 are misleading them.
Under published guidelines from the OFT, you may request, for a fee of £1, a copy of your credit / hire agreement and information on your account so that you can find out what was originally agreed, what the agreement is now (if it has changed) and how much you still owe on the account.
If the creditor fails to supply this information to you, the agreement becomes unenforceable. This means that although you would still owe any outstanding money to the creditor the lender cannot get a court judgement against the borrower, take back hired items or items bought on credit, or take anything used as security (like a car) when the agreement was made. Be aware that interest could be added to your loan or hire agreement, default charges could be made, and any failure to pay could impact your credit record. Also, the agreement is enforceable again once you are supplied with the information.
Many in the debt solution field, including Debt Free Me, are fully behind the OFT in this advice. The concern being that many people are falling further into debt as they mistakenly believe that they can write off debts they believe are 'unenforceable'.
Ray Watson, Director of the OFT's Consumer Credit Group, said that consumers have a right to information on debts they owe, however they must now realise that these sections of the Act cannot be used to write off legitimately owed debts.
"Although the debt can be classified as unenforceable until the right paperwork is provided, people are encouraged to seek advice and help on how they can continue to repay the money they owe."
