When is a non-regulated credit agreement regulated asks Fred Philpott
Since the introduction of the Consumer Credit Act 1974 (the Act) one of the major classifications has been between agreements regulated by the Act and those which are non-regulated. In very general terms, agreements which are non-regulated are not subject to the Act (although there are exceptions). A credit agreement entered into with an individual (as defined) as borrower will be regulated unless it is (i) an exempt agreement, or (ii) before 6 April 2008, above the monetary limit. The original monetary limit was £5,000 which was increased to £15,000 and finally to £25,000. Similar rules apply to hire agreements. Credit and hire agreements with bodies corporate are and were always non-regulated.
Consequence
A major consequence of an agreement being regulated is that it has to comply with documentary requirements and, in particular, be drafted in accordance with the Consumer Credit (Agreements) Regulations 1983 (SI 1983/1553) or 2010 (SI 2010/1014). For example, the heading must state that it is a regulated agreement and certain wording is required setting out the rights given to consumers
