Restrictions on varying or modifying consumer credit agreements
Produced in partnership with Jacqui Hatfield of Reed Smith LLP
Restrictions on varying or modifying consumer credit agreements

The following Financial Services guidance note Produced in partnership with Jacqui Hatfield of Reed Smith LLP provides comprehensive and up to date legal information covering:

  • Restrictions on varying or modifying consumer credit agreements
  • Background to consumer credit agreements
  • Why are there restrictions on varying consumer credit agreements?
  • How can regulated agreements be varied?
  • What additional practical issues do firms need to consider?

Background to consumer credit agreements

Since 1 April 2014, the Financial Conduct Authority (FCA) has been responsible for the regulation of consumer credit).

The Consumer Credit Act 1974 (CCA 1974) and many of the regulations that supplement the CCA 1974 remain in force, although they have now been amended and supplemented to fall within the Financial Services and Markets Act 2000 (FSMA 2000) and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 (RAO) regime.

This means that the rules governing the variation of consumer credit agreements are set out in the CCA 1974 and the Consumer Credit section of the FCA Handbook (CONC). This Practice Note discusses the variation of consumer credit agreements only. For further information on what constitutes a regulated consumer credit agreement and how to draft a consumer credit agreement see Practice Notes: What is a Regulated Consumer Credit Agreement? Consumer credit agreements—pre-contract requirements and Drafting and varying consumer credit agreements.

Why are there restrictions on varying consumer credit agreements?

One of the main purposes of the CCA 1974 and one of the main objectives of the FCA is consumer protection. In theory at least, one of the ways to ensure that consumers are protected is to provide them with an added degree of statutory / regulatory protection by imposing strict rules on the form and