New Clause 3 - Duties of lenders and debtors
Consumer Credit Bill
4:15 pm
No. NC3, to move the following Clause:—
DUTIES OF LENDERS AND DEBTORS
'(1) A lender who provides credit or loans to a debtor so that the debtor may purchase goods and/or services from a third party, who acts as an agent for the lender, in terms of signing debtors up to financial agreements, shall take all reasonable steps to ensure that—
(a) the goods and/or services provided by the goods and/or services provider are of a merchantable quality;
(b) that the goods and/or services are legal;
(c) that the provider of the goods and/or services, when acting as a credit agent on behalf of a lender, does so in a professional and honest manner and behaves in a way which could be considered reasonable in all aspects;
(d) that the provider of goods and/or services, when acting as a credit agent on behalf of the lender, has not acted fraudulently in any way with respect to the setting up and/or running of the credit agreement and the provision of those goods and/or services; and
(e) that the goods and/or services provider, when acting as a credit agent on behalf of the debtor, complies with the requirements of this Act and the 1974 Act.
(2) It shall be for the debtor to demonstrate that the provider of goods and/or services has acted in an irresponsible or illegal way, having regard to the subsections above.
(3) If the debtor so demonstrates, it shall be for the lender to show that he has taken all reasonable steps to ensure that the requirements of the above subsections have been met.
(4) If the lender fails so to do to the satisfaction of the court, the court shall have the power to review the agreement.'. —[Mr. Robertson]
Brought up, and read the First time.