This website uses cookies to ensure you have the best experience. Learn more

Consumer Credit Essay

2547 words - 11 pages

What is credit?

Credit can be defined as the financial accommodation that is ‘the provision of a benefit (cash, land, goods, services or facilities) for which payment is to be made by the recipient in money at a later date’[1]. The Consumer credit Act 1974 s.9(1) defines credit as including ‘a cash loan, and any other financial accommodation’.

Types of credit

Credit arrangements can be classified in two ways which are loan credit and sales credit.
Loan credit involves an advance of money; sales credit involves a deferent of a payment obligation under a supply contract.

A loan payment of money by a creditor to a debtor as a means of benefiting and enriching the debtor, ...view middle of the document...

The CCA is also radical in that it extends its protection into fields hitherto uncovered, like licensing of all credit-granters, restricting of canvassing and on second mortgages.

In another sense the CCA is traditional. Such as the 1893, was intended to embody the common law concepts by codifying them, the CCA merely assumes the basic common law concepts, so whilst coherent pattern of law largely discarded, with the CCA the reader must constantly bear in mind the underlying common law, to which the Act makes often detailed changes.

Cancellation

Licensing

The justification for selecting consumer credit for special treatment over other areas of consumer protection is said to be that it is particularly prone to abusers from which consumers co do little to protect themselves[3] following the white paper[4] an elaborate licensing system was established for creditors and owners in part 3 of the CCA, with special licensing provisions for ancillary credit business.
The CCA, s21 provides that’ a licence is required to carry on a consumer credit business or consumer hire business. How this would protect consumers would be that the initial introduction of licensing should act as a sieve though which unwanted traders are then got rid of from the system because they do not apply for a license, and could be argued that many business will strive to comply with the law in order to obtain a license. More over licensing provides an effective means of controlling rouge traders in that, instead of incompetent threat of an occasional prosecution, the offender runs the risk of being denied the right to continue in business. An important aspect to the licensing system is that accurate and regular information becomes available to the Office of fair trading and emergent credit practices, both good and bad can be monitored. However it can be argued that that a corrupt lender may realise all too well that he will not obtain a license and so he may simply pursue illegal lending practises in the first place. Under s25(1) a license shall be granted on the application if he is a fit person to engage in activities covered by the licence.

Advertising

Consumers are constantly bombarded with a seemingly never ending stream of credit advertisements, whether it be through television advertising, web-based advertisements, flyers in shops, telephone marketing or the steady arrival of junk mail offering loans and credit cards on apparently favourable terms. Given the occurrence of credit advertising and the reliance that consumers place on them, it is clearly important to ensure that such advertisements are both complete and accurate, for the consumer protection.

Part 4 of the CCA s43-47 seek to control of advertisement of credit facilities as the above mentioned can play tricks on consumers minds, which is why they need protecting.

The objective of the control in the CCA is to ensure that, when they are seeking business, traders provide...

Other Papers Like Consumer Credit

Consumer Prefernce Towards Tupperware Products Essay

998 words - 4 pages Consumer Behavior |Program |: |MBA |Class of |: |2009 | |Credit |: |3 |Sessions |: |33 | |Course Code |: |SL MM 602 | | | | Objective To understand the various

Week Four Credit Card Checkpoint Essay

533 words - 3 pages discounts for cash purchases can keep more money in the businesses bank account. If the business finds that they receive a large amount of credit sales, the lower rates the merchant will have to pay to the credit card company. For the merchant, when credit sales increase it can give the merchant the opportunity to renegotiate lower rate transaction fees with the credit card companies. This is similar to a consumer obtaining a credit card

Goverment

845 words - 4 pages only site authorized by the Federal Trade Commission to provide free consumer credit reports. Request one free credit report from one of the three credit reporting agencies (if you are unable to download a report, complete this activity using a sample credit report from www.experian.com) Using what you have learned about credits reports, respond to the following in 50-to 100-words each: 1. What type of information is included on your

Consumer Debt

643 words - 3 pages The reasons we as Americans buy on credit varies, but without it most of us wouldprobably never be able to purchase necessities such as a home or automobile. The nation'seconomy depends on credit, the promise to pay later for goods and services used today;but along with consumer credit comes consumer debt. With the rise in telemarketing andcommercializing in America it is no wonder why Americans feel the impulse to buy now,pay later. The most

Job Discription

504 words - 3 pages ROLE TITLE Title: Assistant Manager, Credit Control Department: SME, Consumer Banking Current incumbent: Eishita Alam Grade: 8 Location: Dhaka, Bangladesh Date: 16th August, 2009 REPORTING RELATIONSHIPS: Reports Directly to: Senior Manager, Credit Policy and Risk Management, SME, Consumer Banking Reports Indirectly to: VC Country Risk Manager, SME, Consumer Banking JOB PURPOSE

Rip the Run Way

913 words - 4 pages , County, and State. Yes No VEHICLE INFORMATION 1. MAKE & MODEL YEAR LICENSE NO. & STATE 2. MAKE & MODEL YEAR LICENSE NO. & STATE OTHER VEHICLES OTHER INFORMATION HOW DID YOU HEAR ABOUT THIS PROPERTY? PLEASE INCLUDE ANY OTHER INFORMATION YOU BELIEVE WOULD HELP TO EVALUATE THIS APPLICATION I/we, the undersigned, authorize On-Site.com, Landlord and its agents to obtain an investigative consumer credit report including but

Math 533 Project a

605 words - 3 pages , the credit balances were on average of $3,964.00. The graph displayed below show that the customers with the higher income, had higher credit balances. The assumption would be that the more income made, the customers would spend more at the department store. The maximum credit balance of $5,678, which was based on a consumer with an income of $60,000 or more. The final pairing of the Size and Years; compares of the number of years a family

I Have No Idea

911 words - 4 pages , on the average consumer * The Black List which contains the list of those practices which are unfair and thus banned Companies are not allowed to use misleading or underhand tactics to get you to part with your cash. Misleading actions include advertising goods that don't exist, or offering just a few items at the advertised price with no hope of meeting large demand.  CONSUMER CREDIT ACTS 1974 AND 2006 - An Act to establish for the

Why Most Americans Should Not Use Credit Cards

987 words - 4 pages November 2010 according to the Federal Reserve’s report(2010) on consumer credit. There is no doubt that America is in the middle of a recession, historically speaking one of the worst ever, and credit cards are being widely overused and abused making the situation worse instead of better. There are certain things that people depend on, the basic essentials such as food and shelter. People very rarely realize one of the most important factors that

Why Americans Should Not Have Credit Cards

933 words - 4 pages major consumer purchase , without credit it would be harder to buy such things that are really necessary to have in life. Credit cards have destroyed a lot of lives, made some really hard , I got to the point that if the money is not there, it is not a need to have either at the time or at all. Living without credit cards has been such a blessing really, if you get to a point in life where material things are not as important as living a life you can

Bis/220 Information Technology Acts Paper

673 words - 3 pages stored electronically and information being transferred the same way, consumers’ information was at risk. Regulations had to be put in place to control this activity. The Fair Credit Reporting Act (FCRA), was enacted in 1970 to create guidelines for Credit Reporting Agencies (CRA). CRAs had operated in a way that employees had to meet a quota for offering credit and declining credit to consumers. This created some fraudulent activity and

Related Essays

Consumer Credit Scheme And Its Risk Management Of Different Commercial Banks In Bangladesh: Implications For Ific Bank Limited Bangladesh

3244 words - 13 pages CONSUMER CREDIT SCHEME AND ITS RISK MANAGEMENT OF DIFFERENT COMMERCIAL BANKS IN BANGLADESH: IMPLICATIONS FOR IFIC BANK LIMITED BANGLADESH 1. INTRODUCTION AND BACKGROUND Credit is the means of investment made by the bank to the entrepreneurs and business community. Alternatively this is the way of channeling fund to the deficit units where various risks and uncertainties are involved. Therefore every decision on credit matter should be taken

Credit Or Not Essay

1019 words - 5 pages lost or stolen it can be reported to the company, and then the account will be closed. If there are any fraudulent charges, the card holder is only liable for $50 (Avoiding credit and charge card fraud, 1997, para 6.) Some credit card companies hold the cardholder at 0% liability (Benefits of using a creditcard, 2010, para 8). More buying power is another advantage. The typical consumer has access to approximately $19,000 on all credit cards

Identity Theft Essay

564 words - 3 pages protection against identity theft. There are a number of protection plan companies a consumer can choose from. Each company has their own plans to choose from and each have different rates. A consumer can review the ratings of each company also. When a consumer has a protection program there are some advantages. These programs review the client’s credit reports with credit monitoring. When a consumer purchases a protection program, fraud insurance is

Credit Cards And College Students Essay

1200 words - 5 pages afford that the credit card company will then deny charges made to that credit card. This account then goes into collections and throughout this process the account is still incurring interest. “It is important to know what terms and conditions you have agreed to and the interest charges that will be added to your bill, if you cannot pay the balance each month” (Indiana Department of Financial Institutions Consumer Education,1996, slide  20). Top