Your Rights Under the Consumer Credit Act: What UK Borrowers Should Know

When you borrow money in the UK, you are not on your own. The Consumer Credit Act 1974 is the main piece of legislation that sets out your rights as a borrower, and it has been updated over the years to keep pace with how credit is offered today. Understanding what it covers can help you feel more confident when you sign a credit agreement, and it gives you practical tools if something goes wrong. Here is what you need to know.

What is the Consumer Credit Act?

The Consumer Credit Act 1974 (CCA) is a UK law that regulates most types of consumer credit, including personal loans, credit cards, hire purchase agreements, and some forms of overdrafts. Its purpose is to protect borrowers by requiring lenders and brokers to provide clear information, follow fair practices, and give consumers certain rights that cannot be taken away.

The Act is enforced by the Financial Conduct Authority (FCA), which sets the detailed rules that firms must follow. The FCA's Consumer Credit sourcebook (known as CONC) translates the Act's principles into practical requirements that lenders and brokers must meet day to day. Together, the CCA and FCA rules create a framework that means you should know what you are signing up to, and you have ways to challenge things if the firm does not treat you fairly.

Your right to clear information before you sign

Before you enter into a credit agreement, the lender must give you certain information in a standardised format. This is called pre-contractual information, and it includes details like the total amount you will repay, the interest rate, any fees, the frequency and number of repayments, and your right to withdraw. The idea is that you should be able to compare offers and understand the commitment before you agree to it.

If the information is missing, misleading, or unclear, the agreement may not be enforceable without a court order. In practice, most FCA-authorised firms go further than the minimum legal requirements, but the CCA gives you a baseline that every lender must meet. For a practical walkthrough of what to look for in the paperwork, see our guide on how to read a loan agreement.

Your right to change your mind: the cooling-off period

For most credit agreements signed away from the lender's premises (for example, online or over the phone), you have a 14-day cooling-off period during which you can withdraw from the agreement without giving a reason and without penalty. You do not need to return the money straight away if you have already received it, but you must repay it within 30 days of giving notice. You may also be charged interest for the days you had the money.

This right comes from the Consumer Credit Directive, which was incorporated into UK law through amendments to the CCA. It is a powerful protection because it gives you time to reconsider, compare alternatives, or simply change your mind. For a full explanation, including which types of credit it applies to and how to exercise it, read our detailed guide on cooling-off periods on credit agreements.

Section 75: extra protection on credit card purchases

Section 75 of the Consumer Credit Act is one of the most valuable protections for UK consumers. It says that if you use a credit card to pay for goods or services costing between £100 and £30,000, the card provider is jointly liable with the retailer if something goes wrong. This means that if the item is faulty, never arrives, or the company goes out of business, you can claim your money back from the credit card company as well as from the retailer.

This protection applies even if you only paid a deposit or a partial amount by credit card, as long as the total value of the item falls within the £100 to £30,000 range. It does not apply to debit cards, charge cards, or buy-now-pay-later agreements that are not regulated by the CCA. It is worth knowing about Section 75 before you make a significant purchase, because it adds a layer of security that you do not get with cash or a debit card. You can read more about consumer protections at Citizens Advice.

Protection against unfair terms and irresponsible lending

The CCA gives courts the power to strike out terms in a credit agreement that are unfair. This means that if a lender includes a clause that creates a significant imbalance between your rights and theirs, to your detriment, that term may not be enforceable. In addition, the FCA requires lenders to carry out reasonable affordability checks before approving credit, and to treat customers in financial difficulty with forbearance and due consideration.

If you believe a lender has not followed these rules, you have the right to complain. Start by raising the issue directly with the firm, and if you are not satisfied with the response, you can escalate to the Financial Ombudsman Service. For a step-by-step guide to the process, see our article on how to complain about a lender.

What the Act does not cover

The CCA does not cover every type of borrowing. It generally does not apply to mortgages, business loans, or credit agreements where the borrower is not an individual (for example, a limited company). It also does not cover some types of informal lending, such as borrowing from friends or family. Some short-term credit agreements and certain buy-now-pay-later products may fall outside its scope depending on the specific terms.

If you are unsure whether an agreement is regulated, check the paperwork. Regulated agreements must include specific wording and disclosures, and the lender must be authorised by the FCA. You can verify a firm's authorisation on the FCA Register at register.fca.org.uk.

The bottom line

The Consumer Credit Act gives UK borrowers a meaningful set of protections. You have the right to clear information before you sign, a 14-day window to change your mind on most agreements, Section 75 protection on credit card purchases, and safeguards against unfair terms. These are not theoretical. They are legal rights you can exercise, and knowing about them puts you in a stronger position when you borrow.

Mini Money is a credit broker, not a lender. We search a panel of regulated lenders to match you with loan options, and checking your eligibility through us uses a soft search that will not affect your credit score. If you are struggling with debt or worried about your finances, free, independent help is available at moneyhelper.org.uk.