Clause 11 - Failure to give notice of sums in arrears

Consumer Credit Bill – in a Public Bill Committee at 2:00 pm on 23rd June 2005.

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Question proposed, That the clause stand part of the Bill.

Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs)

Clause 11 sets out the consequences for the creditor or owner of failing to give an arrears notice. The Government have carefully considered appropriate sanctions for a failure to provide the notice, and I believe that the best way to make creditors or owners give arrears notices is to penalise them for non-compliance in a way that hurts them most directly.

Subsections (1) and (2) set out the periods in relation to which a creditor or owner will not have complied with the requirement to send an arrears notice. For fixed-sum credit agreements, that will be either after the 14-day period when the conditions in clause 9(1) have been met or for further notices after the six month period. For running-account credit agreements, it will be after the time when the next statement was due. The creditor or owner will comply with the relevant requirements when they have sent a notice to the debtor or hirer.

Subsections (3) and (4) establish the consequences for the creditor or owner during the period when they should have provided an arrears notice to the debtor or hirer. During that period, they will not be entitled to enforce the agreement, charge any interest, or impose any default sum for a breach by the debtor or hirer that occurs during that period. The clause ensures that creditors or owners cannot profit from an agreement when they fail to comply with the arrears notice requirements.

Question put and agreed to.

Clause 11 ordered to stand part of the Bill.