Most of the day-to-day rules on short-term lending now come from the Financial Conduct Authority’s own rulebook rather than an Act of Parliament. But the Consumer Credit Act 1974 hasn’t disappeared — several of its provisions still sit underneath FCA regulation and give borrowers real legal protections that are separate from, and in addition to, FCA rules.
Why the CCA still matters alongside FCA regulation
Consumer credit regulation moved from the Office of Fair Trading to the FCA in April 2014, and government has since been reforming parts of the Consumer Credit Act 1974 (CCA), shifting much of its detailed technical content into FCA rules instead. But two of the Act’s most consumer-relevant provisions — connected lender liability under section 75, and the unfair relationships test under sections 140A to 140C — have deliberately been left in place for now, rather than being replaced, because reform proposals have specifically identified them as complex, well-established provisions underpinned by a significant body of case law that shouldn’t be disturbed without careful separate work.
Section 75: connected lender liability
Section 75 makes a credit provider jointly liable, alongside the seller or supplier, for certain breaches of contract or misrepresentation connected to a purchase made using credit. It was designed around credit cards, and its application to short-term or instalment loans is narrower and more fact-specific — it generally requires a direct arrangement between the lender and the supplier of the goods or service purchased with that credit, rather than applying automatically to every loan a lender provides. Where it does apply, it means a borrower isn’t left solely chasing the supplier if something goes wrong; the credit provider shares legal responsibility.
Sections 140A–140C: the unfair relationships test
This is arguably the more broadly useful protection for short-term borrowing specifically. Under section 140A, a court can intervene if it determines the relationship between a creditor and a debtor is unfair to the debtor, because of the terms of the credit agreement itself, the way the creditor has exercised or enforced its rights, or any other thing done, or not done, by or on behalf of the creditor. The court is required to consider all matters it thinks relevant, covering both the creditor’s and the debtor’s circumstances — which gives it broad discretion to look at the substance of how a loan was sold and managed, not just whether the paperwork technically complied with disclosure rules. Remedies a court can order include changing the terms of the agreement, reducing or discharging sums owed, or requiring the creditor to repay money already paid.
What this doesn’t cover
- The unfair relationships test doesn’t apply to every type of credit agreement — certain exempt agreements, including regulated mortgage contracts, sit outside its scope.
- Section 75 claims connected to short-term loans depend heavily on the specific facts of the arrangement between lender and supplier, so it’s not a guaranteed route in every dispute involving borrowed money.
- Neither provision replaces the FCA’s own rules on affordability, the price cap on high-cost short-term credit, or the Consumer Duty — they sit alongside FCA regulation as a separate, court-based legal route, generally used where a dispute has gone beyond what a complaint to the lender or the Financial Ombudsman Service has resolved.
How this fits with FCA-regulated redress routes
In practice, most disputes about short-term lending are resolved through the FCA’s own conduct rules and the Financial Ombudsman Service, which can investigate complaints about irresponsible lending, unfair treatment or unaffordable borrowing without a court case at all. The CCA’s unfair relationships provision becomes more relevant where a matter proceeds to court — for example, where a lender is pursuing a debt through the county court and the borrower wants to raise the fairness of the original relationship as a defence, or where redress through the Ombudsman hasn’t been pursued or has been exhausted. The two systems — FCA regulatory rules enforced through the Ombudsman, and CCA legal rights enforced through the courts — are complementary rather than substitutes for each other.
Why this history matters for borrowers today
Understanding that short-term lending sits under two overlapping legal frameworks explains why a loan can be technically compliant with FCA rules on the surface — clear pre-contract information, an affordability check carried out — and still potentially be challenged as part of an unfair relationship if the overall picture, including how the loan was later enforced or how charges were applied, was unfair in substance. It’s this substance-over-form approach that makes sections 140A to 140C a meaningful backstop, even in an FCA-regulated market.
FAQs
Do I need a solicitor to raise an unfair relationship claim?
Not necessarily for an initial complaint to the lender or the Financial Ombudsman Service, but a formal unfair relationships claim under section 140A is a court matter, and given its fact-specific, discretionary nature, most people pursuing one would benefit from legal advice.
Does Section 75 apply if I borrowed cash rather than buying something directly on credit?
Not typically in the same way — section 75 is built around a purchase made using credit, with a connection between the lender and supplier. A general cash loan without that direct purchase link sits outside its usual scope.
Is the Consumer Credit Act being scrapped completely?
No — government reform has been moving many of its technical, administrative provisions into FCA rules over time, but core consumer protections like section 75 and the unfair relationships test have specifically been retained rather than removed.