Consumer Credit Agreements

[Phoenix]

Have been looking into this for a new business idea. Hav emailed the FSA only to be told they will get back to me within 12 working days. So much for modern technology.

Just wondered if anyone could point me in the right direction for this. Have been looking around but not found any answers yet. FSA and OFT websites are bloated and don't give any answers. Googling for anything like consumer credit agreement brings up pages of the usual rubbish.

The idea is that we have people who pay a monthly subscription charge for 12 months membership. At the end of this they get a 'gift' the cost of which has been covered well withing thier subscription charges. Within thier 12 month subscription they have also have numerous other offers/benefits. The gift is a big part of why they join up.

I don't want to go into detail or debate the rights and wrongs of this idea. I just need to find out whether this would be classed as needing a credit agreement for each subscriber or not.

[skwdenyer]

Phoenix said:

Have been looking into this for a new business idea. Hav emailed the FSA only to be told they will get back to me within 12 working days. So much for modern technology.

Just wondered if anyone could point me in the right direction for this. Have been looking around but not found any answers yet. FSA and OFT websites are bloated and don't give any answers. Googling for anything like consumer credit agreement brings up pages of the usual rubbish.

The idea is that we have people who pay a monthly subscription charge for 12 months membership. At the end of this they get a 'gift' the cost of which has been covered well withing thier subscription charges. Within thier 12 month subscription they have also have numerous other offers/benefits. The gift is a big part of why they join up.

I don't want to go into detail or debate the rights and wrongs of this idea. I just need to find out whether this would be classed as needing a credit agreement for each subscriber or not.

In general, the question has to be whether you're giving them credit or not

So, for instance, if it is a monthly membership fee then probably not (unless paid in arrears on invoice, in which case it probably is). If, however, it is a 12-month membership, paid by monthly instalments (but when you sign up you're in for the whole amount) then, yes, it would be a CCA.

The "gift" is irrelevant, except inasmuch as you need to look at contract law to make sure your Ts&Cs reflect current legislation (particularly if, for instance, you want to be able to substitute something else, etc.).

If the "gift" is such a huge thing, and the rest such a small thing, such as to make the "membership" look like a 12-month savings plan towards buying the gift then, again, it would probably be a CCA.

So, as ever, the devil is in the detail, and I don't think there's enough detail in your question