The Consumer Credit (Agreements) (Amendment) Regulations 2004

Amendment of the Consumer Credit (Agreements) Regulations 1983

16.—(1) Schedule 8, part 1 (information to be contained in documents embodying regulated modifying agreements varying or supplementing earlier credit agreements) is amended as follows.

(2) For paragraph 1 substitute—

“1

All types

(1) A heading in one of the following forms of words— (a) “Agreement modifying a Hire-Purchase Agreement and regulated by the Consumer Credit Act 1974”; (b) “Agreement Modifying a Conditional Sale Agreement and regulated by the Consumer Credit Act 1974”; (c) “Agreement modifying a Fixed-Sum Loan Agreement and regulated by the Consumer Credit Act 1974”; (d) “Agreement modifying a Credit Card Agreement and regulated by the Consumer Credit Act 1974”; or (e) “Agreement modifying a Credit Agreement and regulated by the Consumer Credit Act 1974” as the case may require. (2) Where the document and a pawn-receipt are combined, the words “, and Pawn-Receipt,” shall be inserted in the heading after the word “Agreement” in the second place that it occurs. (3) Where the document embodies an agreement of which at least one part is a credit agreement not regulated by the Act, the word “partly” shall be inserted before “regulated” unless the regulated and unregulated parts of the agreement are clearly separate. (4) Where the loan is being secured on land the words “secured on” and the address of the land shall be inserted at the end of the heading.”.

(3) In paragraph 5—

(a) For subparagraph (b) of column 1 substitute—

“(b) modifying agreements where the earlier agreement is an agreement excluded from the scope of the Consumer Credit (Early settlement) Regulations 2004 by regulation 2(2) of these Regulations.”.

(b) for subparagraph (3) of column 2 substitute—

“(3) The total amount of the charges on the credit not yet accrued referred to in sub-paragraph (2) above shall be the amount of a notional rebate calculated in accordance with the Consumer Credit (Early Settlement) Regulations 2004 as if early settlement had taken place and as if the settlement date were the relevant date disregarding any deferment of the settlement date under regulation 6 of those Regulations.”.

(4) For paragraph 6 substitute—

“6

Modifying agreements both under which the amount of credit to be provided under an earlier agreement for fixed-sum credit is varied or supplemented and where the earlier agreement is an agreement excluded from the scope of the Consumer Credit (Early Settlement) Regulations 2004 by regulation 2(2) of those Regulations.

The total amount of the credit to be provided under the modified agreement calculated as follows, namely the total of— (a) the balance of the credit outstanding under the earlier agreement at the relevant date; (b) any charges thereon (included in the total charge for credit in relation to the credit to be provided under the earlier agreement) due and unpaid at the relevant date; (c) the amount of any additional credit to be provided under the modifying agreement, with a list of its constituent parts.”.

(5) After paragraph 7 insert—

“Term of the agreement
7A	Modifying agreements under which the duration of an earlier agreement for running account credit of fixed duration is varied.	The duration of the modified agreement.
7B	Modifying agreements under which the duration of an earlier agreement for fixed-sum credit is varied.	The duration or minimum duration of the modified agreement.”.

(6) For paragraph (8) substitute—

“8

Modifying agreements under which any charge included in the total charge for credit in relation to an earlier agreement for fixed-sum credit is varied or supplemented, except modifying agreements— (a) which do not specify either the intervals between repayments under the modified agreement or the amounts of repayments or both the intervals and the amounts; (b) under which the total amount payable by the debtor under the modified agreement to discharge his indebtedness in respect of the amount of credit provided may vary according to any formula specified in such agreement having effect by reference to movements in the level of any index or to any other factor; (c) which provide for a variation of, or permit the creditor to vary, (whether or not by reference to any index) the amount or rate of any item included in the total charge for credit in relation to the modified agreement after the relevant date; or (d) under which the total amount payable by the debtor under the modified agreement is not greater than the total cash price under that agreement .

(1) The total charge for credit in relation to the credit to be provided under the modified agreement, with a list of its constituent parts. (2) The varied or supplemented rates of any interest on the credit to be provided under the modified agreement quoted on a per annum basis, or a statement that the rates of interest under the earlier agreement are unchanged. (3) A statement explaining how and when interest charges are calculated and applied under the modified agreement.”.

(7) For paragraph 9 substitute—

“9

Modifying agreements under which— (a) any charge included in the total charge for credit in relation to an earlier agreement for fixed-sum credit is varied or supplemented and which fall within the exceptions in paragraph 8 (a) to (c); or (b) the rate of any other charge included in the total charge for credit in relation to an earlier agreement for running-account credit is varied or supplemented.

(1) The total charge for credit in relation to the credit to be provided under the modified agreement with a list of its constituent parts and in the case of running-account credit, the total charge for credit shall be calculated on the same assumptions as are set out in paragraph 1 of Schedule 7 for the purpose of calculating the APR in place of the assumptions in Part 4 of the Total Charge for Credit Regulations that might otherwise apply. (2) The varied or supplemented rates of any interest on the credit to be provided under the modified agreement quoted on a per annum basis, or a statement that the rates of interest under the earlier agreement are unchanged. (3) A statement whether the interest rates to be shown under (2) above are fixed or variable (4) A statement explaining how and when interest charges are calculated and applied under the modified agreement.”.

(8) After paragraph 13 insert—

“13A.

Modifying agreements under which— (a) an earlier agreement is varied or supplemented so that different interest rates or different charges forming part of the total charge for credit or both are payable in respect of— (i) credit provided under the agreement for different purposes; or (ii) different parts of the agreement, whether or not the agreement is a multiple agreement; or (b) an earlier agreement is varied by varying the order or proportions in which any amount paid by the debtor which is not sufficient to discharge the total debt then due under the agreement will be applied or appropriated by the creditor towards the discharge of the sums due— (i) in respect of the amounts of credit provided for different purposes, or (ii) under each of the different parts of the agreement, as the case may require.

A statement of the order or proportions in which any amount paid by the debtor which is not sufficient to discharge the total debt then due under the agreement will be applied or appropriated by the creditor towards the discharge of the sums due— (a) in respect of the amounts of credit provided for different purposes, or (b) under each of the different parts of the agreement, as the case may be.”

(9) For paragraph 22 substitute—

“Charges
22	Modifying agreements under which any provision for charges under an earlier agreement are varied, including a variation to or from there being no such charges.	(1) A list of any charges payable under the modified agreement to the creditor upon failure by the debtor or a relative of his to do or refrain from doing anything which he is required to do or refrain from doing, as the case may be, or a statement indicating that no such charges are payable as the case may be. (2) A statement indicating any term of the modified agreement which provides for charges (a) not required to be shown under (1) above; or (b) included in the total charge for credit.”

(10) After paragraph 22 insert—

“Cancellation rights
23	Modifying agreements that are not treated as cancellable agreements under section 82(5) of the Act.	A statement that the modifying agreement is not cancellable.
Amount payable on early settlement
24	Agreements for fixed-sum credit for a term of more than one month.	(1) Examples based on the amount of credit to be provided under the agreement or the nominal amount of either £1000 or £100, showing the amount that would be payable if the debtor exercised the right under section 94 of the Act to discharge his indebtedness on the date when— (a) a quarter of the term of the agreement elapses; (b) half of the term elapses; and (c) three quarters of the term elapses, or on the first repayment date after each of those dates. (2) A statement explaining that, in calculating the amounts shown, no account has been taken of any variation which might occur under the agreement, and that the amounts are accordingly only illustrative.”.