Two questions about how CCAs work

[mrroper]

If a Consumer Credit Act-regulated agreement is entered into and then the company's licence lapses, am I right in understanding that any amendments made to the existing agreement after the lapse would be null and void?

Also, if a debt incurred during the 'post-lapse period', would it then be unlawful for that company to then sell that debt on - even if the company that buys it has a Consumer Credit Licence themselves?

[labman]

Re: Two questions about how CCAs work

If a Consumer Credit Act-regulated agreement is entered into and then the company's licence lapses, am I right in understanding that any amendments made to the existing agreement after the lapse would be null and void? It would depend if the company had applied for a new CCL in the meantime. If they have applied for another CCL, it may well be overlooked; if they simply did not hold a CCL any longer, then I imagine they are unable to vary th terms of any agreement previously in existence.

Also, if a debt incurred during the 'post-lapse period', would it then be unlawful for that company to then sell that debt on - even if the company that buys it has a Consumer Credit Licence themselves? I don't believe you have to hold a CCL to own a debt, so I see no reason why you would have to hold a CCL to sell a debt you currently own.

[gravytrain]

Re: Two questions about how CCAs work

If a Consumer Credit Act-regulated agreement is entered into and then the company's licence lapses, am I right in understanding that any amendments made to the existing agreement after the lapse would be null and void?

Also, if a debt incurred during the 'post-lapse period', would it then be unlawful for that company to then sell that debt on - even if the company that buys it has a Consumer Credit Licence themselves?

The ability to vary a terms would depend upon whether it was included within the terms and conditions of the contract.

If the license was no longer in existence the "creditor" would not be able to enforce without permission as per section 40. However due to the definition of "enforcement" would mean that the creditor would still be entitled to ask for the debtor to perform on the varied terms.

As said a temporary lack of a licence say in a transitional period would probably be ignored, serious lapses though are punishable by heavy fines under section 35 i think.

[mrroper]

Re: Two questions about how CCAs work

The ability to vary a terms would depend upon whether it was included within the terms and conditions of the contract.

If the license was no longer in existence the "creditor" would not be able to enforce without permission as per section 40. However due to the definition of "enforcement" would mean that the creditor would still be entitled to ask for the debtor to perform on the varied terms.

As said a temporary lack of a licence say in a transitional period would probably be ignored, serious lapses though are punishable by heavy fines under section 35 i think.

Hi gravytrain,

Many thanks for your input - I very much appreciate it.

But just to clarify, when you say temporary lack or serious lapses, please could you expand a little more on that one, especially in respect to reasonable timeframes?

[mrroper]

Re: Two questions about how CCAs work

If a Consumer Credit Act-regulated agreement is entered into and then the company's licence lapses, am I right in understanding that any amendments made to the existing agreement after the lapse would be null and void? It would depend if the company had applied for a new CCL in the meantime. If they have applied for another CCL, it may well be overlooked; if they simply did not hold a CCL any longer, then I imagine they are unable to vary th terms of any agreement previously in existence.

Also, if a debt incurred during the 'post-lapse period', would it then be unlawful for that company to then sell that debt on - even if the company that buys it has a Consumer Credit Licence themselves? I don't believe you have to hold a CCL to own a debt, so I see no reason why you would have to hold a CCL to sell a debt you currently own.

Hi labman,

Thank you for your reply - I can confirm with a very high degree of likelihood (bordering on certainty) that the company in question definitely didn't hold a CCL any longer.

[gravytrain]

Re: Two questions about how CCAs work

Hi gravytrain,

Many thanks for your input - I very much appreciate it.

But just to clarify, when you say temporary lack or serious lapses, please could you expand a little more on that one, especially in respect to reasonable timeframes?

It depends on how serious the director considered the breach, section 40 details some of the requirements for appeal and the fines and penalties are itemized in schedule one of the act.

[mrroper]

Re: Two questions about how CCAs work

I do have another question - I had heard that Lowell tried to argue in court (I may even have read it on a thread on this site) that Early Termination Fees for mobile contracts were legally enforceable, and that they lost the case.

I'm trying to find out more information about this, so just asking if anyone can help shed some light on this.