'Consumer credit
Elisabeth Dunn
Five years and a week ago, Lord Crowther's committee published its report on consumer credit and its thoughts on how the credit business should be run. Five years, one week, two government departments, a consumer cabinet minister, a national consumer agency and countless millions of (largely turgid) words later, two sections of the Consumer Credit Act are in force. Which leaves just over 160 to go. One of the operative sections states that mortgage brokers who failt to get you a mortgage within six months can charge you no more than £1; the other states that debt adjusters and their ilk may not canvas for trade. To be fair, schemes for licensing those engaged in the credit business are under way but they won't be completed until December next year and nobody anywhere is sticking his neck out to say exactly when the whole Act will be implemented.
On a more optimistic note, the time-lag has given consumer pundits an opportunity to pick holes in the Act and to find ways of plugging them up. One such hole was discovered by David Tench, legal adviser to the Consumers' Association. He drafted his very own Private Member's Bill and sought out an MP—Robin Corbett—to sponsor it. It reads: 'Section 39 (i) (c) of the County Courts Act 1959 is hereby repealed'. As Mr Tench observed, it is hardly a statute to set the blood coursing through the veins but it has a certain relevance to all our lives.
For the County Courts Act, 1959, Section (i) (c) makes it impossible for a County Court to hear cases of 'libel, slander and seduction'. And that, on the face of it, might seem to have little to do with consumer credit, but bear with me.
When the Consumer Credit Act — a People's Law if ever there was one—is fully in force, everybody will have the right to inspect, for a fee of 25p, the file kept on them by credit reference agencies. They will beentitled to find out what their credit rating is and what black marks are against their names and why they are there. And that opens a whole new can of worms.
Consider the hypothetical case of Mr Jones. He applies several times to several different finance companies for a loan or a hire purchase agreement. He is turned down. He cannot buy his car, extend his house or whatever he had in mind. Sensing something wrong, he asks the credit reference agency (whose name must be given to him by a finance house which refuses him credit) to send him a copy of his file. And there it is recorded for all time that he owes £120 to the garage he once used. What had actually happened was that the garage had punctured the overhead cam sprocket flange or whatever; Mr Jones had refused to pay the bill and after a long and acrimonious wrangle, the garage had waived their claim to the money but Mr Jones's name had already gone forward as a bad debtor and the blot was never expunged from his record. It could easily happen.
Mr Jones is an injured man. He is, indeed, a libelled man. Certainly he has recourse to the Director-General of Fair Trading who can force the credit reference agency to correct the record, but that in no way compensates Mr Jones for the aggravation he has suffered in being turned down for loans in the past. But the Consumer Credit Act the People's Law—does not restrict the citizen's rights in law, so Mr Jones can sue for libel. But you can't sue for libel in the County Court—the People's Court—because Section 39(i) (c) of the County Courts Act 1959 says you can't. You can only sue for libel in the High Court which is very expensive and you cannot get legal aid for libel actions. So once libelled, you stay libelled and uncompensated.
To avoid all this unpleasantness, Mr Tench last year approached Robin Corbett, who drew a high place in the ballot for Private Members' Bills. Mr Corbett was full of enthusiasm for Mr Tench's dry little draft repealing Section 39 etc etc, until he discovered rape and, in the nature of things, a Bill on the law affecting rape was going to be given somewhat higher priority than Section 39.
'The point is,' Mr Tench said, 'that the Consumer Credit Act gives you the means of finding out if you have been libelled but no means by which you can get compensation. It's very nice if the Director-General of Fair Trading sets the record straight, but he's not going to be handing out the fivers, is her?'
The Faulks Committee on defamation has taken a similar view on the jurisdiction of County Courts and has recommended that their powers be extended to encompass libel actions. If the Faulks recommendations become law there will be no need for Tench's proposal. But when, one might ask, is anyone going to do anything about Faulks, bearing in mind the five years and one week since Crowther ?
Previous page
