Equal Liability

(Updated 19/03/25)

For credit of between £100 and £30,000 the creditor in a regulated borrow-lender-supplier agreement is ‘jointly and severally liable’ – i.e. equally liable – with the supplier of the goods. (Section 75 of the Consumer Credit Act )

This means that credit unions are equally liable with a supplier – e.g. Co-operatives Electricals – where there is a breach of contract involving the supplier.

(Section 75A, introduced under the EU Consumer Credit Directive, extends the same liability where credit is between £30,000 and £60,260, the agreement is a ‘linked agreement’ – similar to a debtor-creditor-supplier agreement – and the supplier cannot be traced, is insolvent, does not respond or has not responded satisfactorily where the consumer has taken reasonable steps to pursue them. In practice this is unlikely to affect credit unions given the size of the loans in question. NB 75A only applies where 75 does not – unlikely to affect credit unions given the sums of money involved.)

Chapter 13 of the BIS guide provides details of this extended provision: http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/c/10-1053-consumer-credit-directive-guidance.pdf