On July 31, in a year already marked out by memorable events, the Consumer Credit Act slipped quietly on to the statute book, unobserved by Press and public and unknown to large sectors of the business community. Yet this massive enactment, running to 193 sections and five schedules, will revolutionise the law of consumer credit, sweeping away almost all the existing legislation and replacing this with a far more effective and wide-ranging pattern of control. It is impossible, in an article of this kind, to explore all the complexities of the new legislation, which has hitherto been unobtainable from the Stationery Office. The purpose of the ensuing paragraphs is to give a bird’s eye view of the Act and an explanation of the meaning and purpose of the new terminology and classification of agreements which it introduces.

Most of the provisions of the Act will not come into force until days to be appointed by Order; and many sections which are general in character will be supplemented by regulations. The first set of provisions likely to become operative is that relating to advertising, for which regulations are expected early next year. At about the same time, regulations will be made prescribing the form and content of documents utilised in connection with transactions governed by the Act, but the Government is expected to allow 12 months for compliance before these become operative. The licensing of credit grantors and intermediaries will be phased over a two-year period. Hence the Act is at present in a curious state of limbo and will not become fully operational for some time. What follows should be read with this point in mind.

The most striking feature of the Act is its adoption of the fundamental recommendation of the Crowther Committee that the legislative treatment of consumer sale credit and consumer loan credit should be unified. Hitherto, the former has been governed by the Hire-Purchase Acts, the latter by the Moneylenders Acts, so that because of differences in their legal form transactions serving the same economic purpose have been subject to entirely different types of statutory control. When the relevant provisions have been brought into force, the new Act will repeal the Hire-Purchase Act 1965, the Advertisements (Hire-Purchase) Act 1967, the Moneylenders Acts and the Pawnbrokers Acts (though not the Bills of Sale Acts), and will impose an across-the-board regulation of all forms of consumer credit: hire-purchase, instalment sale, check trading, credit cards, secured and unsecured loans and overdrafts, and every other form of financial accommodation. In addition, consumer rental will for the first time be brought under statutory control as a consumer protection measure.