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Clauses

Definition
A section of a consumer credit agreement or other legal document.

Explanation
Used when talking about the various sections within a consumer credit loan agreement.

A clause will usually be about one subject and will detail the terms of a specific part of the contract.

Collection week

Definition
The period of time, around one week, before City Energy Network collects the Direct Debit for a regular loan repayment.

Explanation
Used when talking about your regular repayments of your loan. City Energy collects most using Direct Debit. Collection week refers to the week before the date a Direct Debit is due. During this week, it's not possible to cancel the Direct Debit or make amendments to the payment date or value because it's too close to the date the Direct Debit payment is due. City Energy has to collect the Direct Debit as usual and then refund the payment to the customer.

Compensation

Definition
Compensation is also referred to as Redress.
They are either:

  • a payment made to a customer for a loss; or
  • a payment for damages awarded by a court or agreed between parties.

Explanation
Used when talking about settlements.

Condition

Definition
A condition is part of a contract that specifies that something must be done – and often when, where or how it must be done too.

Explanation
Used when talking about contracts and agreements.

In an installation agreement, a condition usually refers to something that must be done or complied with. For example, the duty to take reasonable care to protect property, or the duty to carry out routine maintenance are both common conditions whereas in a personal loan agreement it would be a condition to keep up regular repayments.

Agreements or contracts may be deemed to be broken if any of the conditions they contain are broken.  

Consumer Credit Act

Definition 
The Consumer Credit Act 1974 is the legislation that dictates aspects such as what information must be provided to borrowers before and during a loan, the terms of credit agreements, and calculations for APR.

Explanation
The law that underpins all credit matters and which gave us things like APR, cooling off periods, credit agreements and a lot more. Loans provided by us to our customers are delivered in compliance with the Consumer Credit Act 1974.  Documents provided as part of the loan application process clarify how this legislation affects our loans and the rights that it gives a borrower.

Continuous Payment Authority (CPA)

Definition
A continuous payment authority exists when a customer has given consent to a firm to debit one or more payments from the customer’s payment account.

Explanation
A continuous payment authority is in place to enable the firm to collect loan repayments from the customer. A CPA enables the firm to not only collect from a designated account card but also the customer’s bank account.  The most common used CPA is known as a Direct Debit.

Contractual Liability

Definition
A liability that a person or organisation accepts as part of a contract they sign.

Explanation
Used when talking about contracts. Contractual liabilities are agreed by signing a contract, which is different to liabilities established by common law or statute law.

Cooling off period

Definition
Another term for statutory cancellation rights. It is also referred to as the Right to Withdrawal. Used when talking about personal or consumer contracts.

Explanation
How long you've got to change your mind after signing a credit agreement. Usually 14 days.

A customer has a right to cancel their personal loan up to 14 days after the contract completion, or the date that the customer received their documentation. This applies at the start of a loan. In cases of product installations, customers have the right to cancel this installation within 14 days of the last piece of equipment entering the property, unless an Express Consent document has been signed.

County Court Judgement (CCJ)

Definition
A County Court Judgement is issued by a County Court for failing to repay a loan or outstanding debt. A CCJ will affect a person’s credit rating and may affect their ability to get a loan or mortgage. CCJs can be enforced by bailiffs.

Explanation
CCJs are one or more factors taken into consideration by lenders prior to the provision of a loan.  A failure to repay a loan or outstanding debt may result in the lender taking the customer to court and achieving a County Court Judgement against the person ensuring that they are the first to be paid once the person obtains an income.

Credit

Definition
Credit is the provision of resources (such as granting a loan) by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay at a later date. The first party is called a creditor, also known as a lender, while the second party is called a debtor, also known as a borrower.

Explanation
Giving someone money with the intent that it will be repaid in full at a future date.

Credit Rating

Definition
A credit rating is a points system used by banks and lenders offering loans and mortgages to estimate a person's credit worthiness and their risk potential. A record called a credit report or credit history is held on file by credit reference agencies documenting an individual's past borrowing and repayments. To compile this, they use public records, like whether you are on the electoral roll, have had a CCJ or have been made bankrupt.

Explanation
The statistical probability of defaulting on a credit agreement. A credit rating is used by the firm to determine if a customer’s past activities on borrowing and repayment alongside current financial obligations meet with the risk they are willing to take. Credit ratings are not deemed inherently good or bad.

Credit Reference Agency

Definition
This is a company that compiles credit records of consumers and releases the information to companies offering credit terms (examples of such companies include Equifax and Experian).

Explanation
City Energy Network will use Credit Reference Agency CallCredit during a loan application. A person’s credit history will be held by them, enabling us to score borrowing and repayment patterns. A person can access their credit history by visiting a credit reference agency's website. They can be obtained at a cost of £2.00.

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