The Consumer Credit Act governs the licensing of, and other controls on traders who supply credit, or goods and services on credit.
This article explains the requirement for providing a debtor with a statement of money owed and paid.
Required statements under a fixed sum credit agreement
Section 6 of the Consumer Credit Act 2006 inserts a new section (s77A) whereby a statement must be provided if the agreement is a fixed sum credit agreement under section 77A.
The statement should explain the money borrowed, money paid, interest in all cases and the outstanding amount.
The creditor under a regulated agreement for fixed sum credit must within a period of one year (beginning with the day after the day on which the agreement is made) give the debtor a statement.
After giving that statement, the creditor must give the debtor further statements at intervals of not more than one year.
Failure to provide the statement
If the creditor fails to give the debtor an annual statement, then they are not entitled to enforce the agreement during the period of his non-compliance, and the debtor is not liable to pay any interest during this period.
The debtor is also not liable to pay any default sum that would have become payable during the period of non-compliance or that would have become payable after the end of that period in connection with a breach of the agreement occurring during that period.
However, nor is a creditor required to give the debtor an annual statement if there is no further sums payable under the agreement.
Further provisions relating to running account credit agreements
Section 7 of CCA 2006 requires creditors to issue further statements to debtors setting out specified information in respect of running account credit agreements.
These further statements must be provided at intervals of not more than 12 months.
Creditors may further be required to include specified information about the consequence of failing to make repayments, or only making minimum repayments.
The dispensing notice
If there are two or more debtors, one of them can provide a dispensing notice to the creditor. This gives the creditor permission not to provide a statement to him or her.
The key point here is that at least one of the debtors must still receive a notice. Not all can opt out.