Q&As

Where a lender is required to send notices of sums in arrears on a fixed sum loan under section 86B of the Consumer Credit Act 1974 (CCA 1974) and the customer clears the arrears but leaves default sums outstanding, is the lender required to keep sending subsequent notices of sums in arrears under CCA 1974, s 86B(5)(b)?

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Produced in partnership with Russell Kelsall LLB (Hull); LPC (Shef) of TLT
Published on LexisPSL on 14/04/2021

The following Financial Services Q&A produced in partnership with Russell Kelsall LLB (Hull); LPC (Shef) of TLT provides comprehensive and up to date legal information covering:

  • Where a lender is required to send notices of sums in arrears on a fixed sum loan under section 86B of the Consumer Credit Act 1974 (CCA 1974) and the customer clears the arrears but leaves default sums outstanding, is the lender required to keep sending subsequent notices of sums in arrears under CCA 1974, s 86B(5)(b)?
  • The requirement to give a notice of sums in arrears (a NOSIA)
  • The time period to give a NOSIA and a SNOSIA
  • What if the customer pays off the arrears which triggered a NOSIA, and any further arrears?

The requirement to give a notice of sums in arrears (a NOSIA)

Section 86B(1) of the Consumer Credit Act 1974 (CCA 1974) sets out when a notice of sum in arrears (NOSIA) is triggered. In broad terms, a customer under an agreement requiring them to repay by monthly repayments must be sent a NOSIA where:

  1. the customer is required to have made at least two payments under the agreement before that time

  2. the total sum paid under the agreement by the customer is less than the total sum which he is required to have paid before that time

  3. the amount of the shortfall is no less than the sum of the last two payments which the customer is required to have made before that time

  4. the lender is not already under a duty to give their notices under CCA 1974, s 86B for the agreement, and

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