NOSIA than thou? Unenforceability Provisions In Consumer Credit Regulations
Richard Mawrey QC examines whether the penalties for non-compliance with the Byzantine labyrinth of the Consumer Credit Act 1974 are reasonable, necessary or proportionate.
Unenforceability is now the sanction of choice for most consumer-orientated legislation, but it is often triggered by trivial errors or computer glitches.
The Consumer Credit Act (CCA) 1974 ss 77A and 86B which regulate the serving of annual statements for fixed-sum credit agreements and notices of sums in arrear (NOSIA) carry disproportionate sanctions for non-compliance, particularly where the prejudice to the customer is minimal.
Every unenforceable agreement diminishes the pool of money available for lending and increases the costs of the lender which are passed on to those customers who do meet their obligations.
In place of total unenforceability, why not make these penalties subject to the same regime as the improperly executed agreement enforcement with court leave?
See here for the full article which was first published in Butterworths Journal of International Banking and Financial Law and forms part of an ongoing series being written by members of the Henderson Chambers Banking, Finance and Consumer Credit group.