Millions of people across the world use their credit cards every day to buy goods and services. Yet, a credit card can greatly affect your credit rating, which can determine your eligibility for credit on a mortgage or loan. It is therefore essential to understand your credit card rights, so you don’t make a big mistake.
The Right to Cancel a Credit Agreement
The Consumer Credit Act (1974) states you have the right to cancel a credit agreement, which is dependent on both how and where the agreement was signed, as this will affect the cooling off period.
There would be a five-day cooling off period if a credit agreement was signed at your home, work or at an exhibition or conference. The five days will begin once you receive a cancellation form that should have been included in the second copy of a credit agreement.
However, if you signed a credit agreement via a broker, intermediary or over the telephone, there will be a 14-day cooling off period, which will begin once you receive a notification on how to cancel the contract.
Section 75 of the Consumer Credit Act states there is an equal liability on a creditor, such as a credit card company, for breaches by the supplier. For example, if goods are faulty and you are unable to receive compensation, or if a merchant goes bust, the credit card company will be responsible for the goods that exceed £100. It is also responsible for goods bought and delivered to the UK from overseas by mail order, the internet or the telephone. Read this article on Section 75 to learn more about the enhanced form of consumer protection.
CCA Request – Section 77-79
Section 77-79 of the Consumer Credit Act ensures you have a legal right to request a copy of a credit agreement from a creditor. You also have a right to receive specific and current information regarding a debt.
The specific information regarding your loan must include the total sum to be paid, the outstanding sum and the due dates for each instalment, as well as the total sum payable, if this differs from the original agreement.
A creditor must also provide both the agreement and statement within 12 working days. If they are unable to provide the documents, the debt cannot be enforced onto the borrower. If they fail to provide the information within one month, they will have committed a criminal offence.
The sections also state that loan providers must provide statements regarding new regulations to the consumer within one year of the contract being made. If they fail to do so, both the repayments and interest will be frozen until the statement has been sent. The request should also be made to the creditor with a payment of £1.
Credit File Access
If you have been refused a credit agreement, you have a legal right under sections 157-159 to request the lender provides details of the credit agency used to access your credit file. However, you must request the information in writing within 28 days, and the lender must respond to the letter with seven days.