Lloyd's Maritime and Commercial Law Quarterly

The unfair relationship test, consumer credit transactions and the long arm of the law

Sarah Brown *

The Consumer Credit Act 2006 has introduced a new unfair relationship test, as a replacement for the extortionate credit bargain test contained in the Consumer Credit Act 1974, ss 137–140. This gives the court far-reaching powers to intervene in credit transactions but provides little guidance as to how these powers should be applied. This article looks at the implications of the new sections. It examines the potential extent of the new test by means of comparison with the old, by looking at relevant factors, assessing the possible approach of the various agencies involved in its application and considers what this means for parties to present and future consumer credit transactions.


The Consumer Credit Act 2006 (“CCA 2006”) has introduced a number of amendments to the existing consumer credit legislation contained in the Consumer Credit Act 1974 (“CCA 1974”). The 2006 Act has been fully in force since 31 October 2008. The aim of the reform was couched in terms of fairness to both creditor and consumer, but the underlying basis of the desire for change was protection for the consumer, more particularly the vulnerable consumer and his/her exposure to unfair creditor behaviour. Ensuring adequate information and transparency in the market-place were regarded as



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