Unfair relationships – what does the future hold?

[EXC]

Unfair relationships – what does the future hold?

The “unfair relationship” concept in respect of credit agreements was introduced into the Consumer Credit Act 1974 (“CCA”) on 6 April 2007^[1]. Seven years later, this article reflects on how the provisions of the test have been interpreted and applied by the courts and how the law is likely to develop......

http://www.lexology.com/library/deta...5-011e0b284893

[Guest]

Re: Unfair relationships – what does the future hold?

Yes I remember when it was introduced it promised so much and ended up delivering so little.

Perhaps the new decision and the FCA muscle will breathe some life back into the sections.

[Amethyst]

Re: Unfair relationships – what does the future hold?

''Compliance with the regulatory framework, has, to date, assisted creditors in defending unfair relationship claims. The Court in Harrison said that the ‘touchstone’ as to whether a relationship was unfair was “the standard imposed by the regulatory authorities pursuant to their statutory duties” and that they should “not resort to a visceral instinct that the relevant conduct is beyond the Pale.” The Court went on to refer to the Insurance: Conduct of Business Rules (“ICOB”) and whether those rules required disclosure of receipt of commission stating that it would be an “anomalous result if a lender was obliged to disclose receipt of a commission in order to escape a finding of unfairness under section 140A of the Act but not yet obliged to disclose it pursuant to the statutorily imposed regulatory framework under which it operates”.

However, the CA’s analysis did not consider the higher level principles (PRIN) contained in the FCA Handbook, many of which may be considered relevant to whether a relationship was unfair. Future courts may look to PRIN to assess compliance with the ‘spirit’ of the regulatory regime rather than compliance with detailed rules.

The regulatory landscape changed significantly on 1 April this year as regulation of consumer credit was transferred from the OFT to the FCA. Consumer credit businesses are now subject to the provisions of the Handbook and to the new Consumer Credit Sourcebook, known as ‘CONC’. While there is a ‘grace period’ in relation to certain aspects of CONC that does not apply to the many other aspects of the Handbook. In particular, the FCA will expect compliance with PRIN immediately.

The law of unfair relationship is unlikely to emerge unchanged from this regulatory shift. The change may come from the regulator, with an already established reputation for being pro-active, or it may come from the courts dealing with a new set of claimants bringing fresh proceedings for unfair relationships. Then there is the much anticipated decision of Supreme Court in Plevin and Conlon. What is undoubtedly called for is more certainty in this area of law. ''


HARRISON - > http://legalbeagles.info/harrison-v-...february-2011/

[FlamingParrot]

Re: Unfair relationships – what does the future hold?

I can't see how most PDLs cannot be considered an 'unfair relationship' against the borrower, when you borrow, say, £200 and they charge £80 to roll over plus £30 to write a letter asking you to pay, etc... :wof: :wof: :wof: Especially when you consider most people taking out PDLs do so because they can't access mainstream credit like credit cards and overdraft facilities.

The concept of 'unfair relationship' seems very wide open to interpretation.

[Guest]

Re: Unfair relationships – what does the future hold?

I think there is an application in PDLs, although not the obvious one.

The situation regarding consumer protection since the days pf the money lenders act and the Crowther report is one of transparency, the reams of legislation about pre-contractual information and indeed the requirements of the CCA center around the form and the content of the agreement, not so much about its intrinsic fairness or the quality of the bargain.

This continues to be the case IMO, the fairness test is not about the contract but about fairness arising out of the contract.There have been a number of case where section 140 has been wheeled out to argue about high interest rates for instance, to my knowledge there have been no major successes.

Where the act may be of help is when the agreement seems to conceal the addition of default charges, for instance, or the misleading claims made by PDL companies regarding repayment.