Clause 40 - Supplementary provision relating to requirements

Consumer Credit Bill – in a Public Bill Committee at 11:45 am on 28th 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)

To assist the Committee, the clause sets out details relating to the OFT’s power to impose requirements on licensees, and supervisory bodies which hold a group licence. It provides that a notice imposing a requirement can specify when that requirement should be complied with. This may be a deadline, or a period during which it is in force. A requirement no longer applies when the licence it is related to expires.

Subsection (3) states that no compensation, or other redress, will be required. That is not the function of requirements, which are to ensure that a licence holder’s conduct is satisfactory to the OFT. Compensation, or making amends to individuals, should be pursued through the courts or the alternative dispute resolution mechanism.

Subsections (4) to (7) relate to powers to vary or revoke requirements. The OFT may vary or revoke a requirement on its own motion. Affected persons are also able to apply to the OFT to vary or revoke a requirement. These affected persons are the licensee, or any person who is referred to by name in the requirement. The clause ensures that the power for OFT to impose requirements is an effective tool.

Photo of James Brokenshire James Brokenshire Conservative, Hornchurch

Briefly, subsection (3) says that a person shall not be required under section 33A or 33B to compensate or otherwise make amends to another person. Could that provision be used to prevent a practice from taking place, for example, if there was an improper practice in place for a particular borrower? Could it be used to protect a borrower in those circumstances?

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

Yes, because that would be a matter of fitness and would concern unfair practice. We talked about default issues earlier on in the Bill. The borrower would not be able to collect anything because they had acted in an unfair way.

Question put and agreed to.

Clause 40 ordered to stand part of the Bill.