Charles Hendry (Shadow Minister, Trade & Industry; Wealden, Conservative)

Will the Minister explain his reasoning for extending from seven to 14 days the minimum period after which a creditor or owner may take action in respect of an agreement after issuing a default notice? Does he think that that would offer greater protection for the consumer? What impact does he anticipate the change will have for lenders, particularly in terms of cost?

What evidence must there be that someone in default has received the notification? What happens if someone is away on holiday and does not know that the notification has been made? What happens if a student is away for some months over the summer vacation and the seven or 14-day period expires without their knowing that the notification has been provided?

Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)

Creditors currently have to provide a default notice under section 87 of the 1974 Act. They must do so if they wish to terminate the agreement or take any precautionary action for its breach. We are not changing the basic requirements, but there are amendments to the time of those requirements. Subsection (1) extends the period after which the notice is served before the creditor or owner may take action against the debtor or hirer from seven to 14 days. Any creditor or owner already waits that long. The period gives the debtor or hirer an opportunity to remedy the default or negotiate an alternative arrangement.

We are also amending the current requirements, permitting the Secretary of State to prescribe the information to be included in the notice, and requiring the creditor or owner to attach a default information sheet prepared by the Office of Fair Trading. We shall consult on the information to be required, which might cover some of the concerns that the hon. Gentleman raised.

We intend to include information about whether the agreement includes an interest after judgment clause, as well as a reminder to consumers of the right to voluntary termination under sections 99 and 100 of the 1974 Act. The default information sheet will include information to help debtors or hirers who receive a default notice. The clause ensures that debtors or hirers receive impartial information at a critical time and have sufficient time to act on it. I hope that that will help the hon. Gentleman to accept the clause.

Question put and agreed to.

Clause 14 ordered to stand part of the Bill.

Clause 15 ordered to stand part of the Bill.