purchase protection and large purchase query

gt94sss2

Section 75 can apply where the purchaser is a small business in certain circumstances.

For Section 75 to apply, in the first instance the following four conditions must all be satisfied:

• The cash price of the goods or services bought by the consumer must be over £100 and not more than £30,000.
• The amount of credit provided to the consumer towards the purchase must not exceed £25,000, and must have been provided to an 'individual' (which includes sole traders, small partnerships and unincorporated businesses, as well as ordinary consumers).
• The provider of credit must be in the business of lending money, and the credit agreement must have been made in the course of that business.
• The credit must have been provided to the consumer under pre-existing arrangements between the provider of credit and the supplier of the goods and services.

Source: https://www.financial-ombudsman.org.uk/publications/ombudsman-news/62/62-consumer-credit.htm

Terry_Towelling

Notwithstanding gt94sss2's post above, I've been trawling through bits of the CCA and was wondering whether S75A6c might be the part which says the connected lender liability will not apply if the debtor is making the purchase in connection with his business.

chattychappy

gt94sss2 wrote: »

Section 75 can apply where the purchaser is a small business in certain circumstances.

....

Source: https://www.financial-ombudsman.org.uk/publications/ombudsman-news/62/62-consumer-credit.htm

Thanks for finding that, I vaguely remember seeing it before. Coming from the FOS it has some authority. Actually I disagree with your intro "small business". It only uses "small" in the case of partnerships, which I find odd. But anyway, with that proviso, businesses are covered if credit is provided to an individual rather than a Ltd company.

Terry_Towelling wrote: »

Notwithstanding gt94sss2's post above, I've been trawling through bits of the CCA and was wondering whether S75A6c might be the part which says the connected lender liability will not apply if the debtor is making the purchase in connection with his business.

Actually I think that confirms the position. S75A6c is a top up provision for amounts over £30K (but less than £60K) subject to certain further provisos - essentially you must go after the supplier first.

The fact that it includes a business exclusion :"the linked credit agreement is entered into by the debtor wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him" which is absent in S75 suggests S75 does cover business transactions.

gt94sss2

chattychappy wrote: »

Thanks for finding that, I vaguely remember seeing it before. Coming from the FOS it has some authority. Actually I disagree with your intro "small business". It only uses "small" in the case of partnerships, which I find odd. But anyway, with that proviso, businesses are covered if credit is provided to an individual rather than a Ltd company.

I agree - I only used the phrase "small business" as I assume any large business would be incorporated and/or not a sole trader.

The language to do with Partnerships might be to reflect the existence of "Limited Liability Partnerships" (LLPs) which are also considered their own legal entity.

Notwithstanding gt94sss2's post above, I've been trawling through bits of the CCA and was wondering whether S75A6c might be the part which says the connected lender liability will not apply if the debtor is making the purchase in connection with his business.

I believe Section 75A applies only where Section 75 does not apply and was introduced mainly to cover hire purchase agreements..

Terry_Towelling

gt94sss2 wrote: »

I believe Section 75A applies only where Section 75 does not apply and was introduced mainly to cover hire purchase agreements..

Was going a bit boggle eyed by that stage and didn't read it properly. I read it as meaning that S75 wouldn't apply if the conditions of S75A sub-section 6 were met when (as you say) it actually means S75A won't apply.

I think it's time to dig out the plastic submarine and go for a bath now!