Keenan and Riches’BUSINESS LAW

Advertising (ss 43 – 47)

The Act requires the Secretary of State to make regula-
tions about the form and content of advertisements to
ensure that they convey a fair and reasonably com-
prehensive indication of the nature of the credit facilities
offered and their true cost. The aim is to promote ‘truth
in lending’ and so encourage consumers to shop around
for the best credit bargain. The specific regulations relat-
ing to credit advertising have now been supplemented
by the more general rules contained in the Consumer
Protection from Unfair Trading Regulations 2008 (see
Chapter 12 ).
The Consumer Credit (Advertisements) Regulations
2004 (as amended) cover most advertisements for con-
sumer credit, credit brokerage and all forms of advertis-
ing including TV, radio, on the Internet and teletext,
and by telephone. The regulations contain a single list of
items which must be included in credit advertisements.
The list is set out in Fig 13.4.
The OFT publishes a guide to credit advertising which
is supplemented setting out examples of both compliant
and non-compliant advertising.
It is a criminal offence to cause an advertisement to be
published which breaches the regulations. Offences can
be committed by an advertiser, the publisher, and any-
one who devised the advert or arranged for its publica-
tion. It is a defence if a person can show that he did not
know and had no reason to suspect that the publication
would be an offence.

It is also an offence to advertise goods or services on

credit where the advertiser does not hold himself out as

prepared to sell for cash.

Quotations (s 52)

Traders used to be under an obligation to give a written

quotation if one was requested. The relevant regulations

were revoked in 1997. However, the Consumer Credit

(Content of Quotations) and Consumer Credit (Advert-

isements) (Amendment) Regulations 1999 (SI 1999/

2725), which came into force on 28 February 2000,

require the inclusion of certain prescribed information

where a quotation is provided by the trader. Quotations

must include a statement, if applicable, that security is

or may be required and the warning: ‘Your home is at

risk if you do not keep up repayments on a mortgage or

other loan secured on it.’

Canvassing (ss 48 –51)

It is an offence to canvass a DCA off trade premises. This

outlaws the practice of stopping people in the street or

calling uninvited at their houses to persuade them to

take a loan. Traders need a special licence to canvass off

trade premises credit agreements linked to the supply of

goods and services or the hire of goods. It is an offence

to send any documents to a minor inviting him to bor-

row money, obtain goods or services on credit, or to

apply for information or advice on borrowing. It is also

an offence to give or send a person a credit token if he

has not asked for it. This rule does not apply to the

renewal of credit cards.

Signing credit or hire agreements

Creditors or owners must observe certain formalities if

they wish to enforce any agreement. These rules do not

apply to non-commercial agreements. Small DCSAs for

restricted-use credit are only subject to the rules about

pre-contractual disclosure (see 1 below).

1 Before signing (s 55).The Act requires information

to be given to debtors or hirers before they enter into a

consumer credit or hire agreement. The rules depend on

whether the contract was entered into after face-to-face

contact or at a distance.

Part 3Business transactions

392

Figure 13.4Information to be provided in credit
advertising

Content of a credit advertisement

Types of credit

Deposit of money in an account

Cash price

Advance payment

Frequency, number and amount of repayments

of credit

Other payments and charges

Total amount payable by the debtor