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Financial Services Bill

301: After Clause 27, insert the following new Clause— "Restrictions on appropriation of payments (1) The Consumer Credit Act 1974 ("the CCA 1974") is amended as follows. (2) After section 81(2) insert— "(3) Where a debtor or hirer is liable to make payments in respect of a regulated agreement where more than one interest rate applies, on making a payment in respect of the agreement which is not sufficient to discharge the total amount then due under the agreement, the sums so paid by him shall be appropriated towards the satisfaction of the amounts outstanding in the order of those which bear the highest rate of interest. (4) A consumer credit business who does not act in accord with section 81(3) commits an offence." (3) In Schedule 1 (prosecution and punishment of offences), after the entry relating to section 80(2) insert— "81(4) Breach of restrictions on provisions of credit limit increase. (a) Summarily. (b) On indictment. The statutory maximum. A fine." (4) An offence under section 81(4) of the CCA 1974 is to be treated for the purposes of Part 3 of the Regulatory Enforcement and Sanctions Act 2008 (civil sanctions) as contained in the CCA 1974 immediately before the day on which that Act of 2008 was passed."