Part IX Judicial Control
Extortionate credit bargains
138 When bargains are extortionate.
1
A credit bargain is extortionate if it—
a
requires the debtor or a relative of his to make payments (whether unconditionally, or on certain contingencies) which are grossly exorbitant, or
b
otherwise grossly contravenes ordinary principles of fair dealing.
2
In determining whether a credit bargain is extortionate, regard shall be had to such evidence as is adduced concerning—
a
interest rates prevailing at the time it was made,
b
the factors mentioned in subsection (3) to (5), and
c
any other relevant considerations.
3
Factors applicable under subsection (2) in relation to the debtor include—
a
his age, experience, business capacity and state of health; and
b
the degree to which, at the time of making the credit bargain, he was under financial pressure, and the nature of that pressure.
4
Factors applicable under subsection (2) in relation to the creditor include—
a
the degree of risk accepted by him, having regard to the value of any security provided;
b
his relationship to the debtor; and
c
whether or not a colourable cash price was quoted for any goods or services included in the credit bargain.
5
Factors applicable under subsection (2) in relation to a linked transaction include the question how far the transaction was reason-ably required for the protection of debtor or creditor, or was in the interest of the debtor.