Section 78 of the Consumer Credit Act

Under Section 78 of the Consumer Credit Act of 1974, creditors must give certain information to debtors regarding credit agreements that do not have a fixed sum for a fee of 1 pound, and penalties may be assessed if creditors do not provide that information.

Responsibilities of Creditors Under Section 78

Creditors must provide to debtors the current state of their credit agreement, the amount that has already been paid and future due days for payments under the current credit agreement between the creditor and the debtor.

Penalties for Creditors

If the creditor does not give due dates for future payments within 12 working days of the request, then the agreement between the creditor and debtor may become "unenforceable."

Unenforceable debt agreements still must be paid, but creditors cannot threaten legal action, demand early payments or repossess property on unenforceable agreements.

Agreements Where Section 78 Does Not Apply

Section 78 does not apply to non-commercial credit agreements, and creditors have more leniency with smaller agreements.

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About the Author

Since 2000, Andrew Sylvia has written for more than a dozen newspapers throughout New Hampshire. He received a bachelor's degree in journalism in 2004.

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