The United Kingdom government will shortly be starting Phase 2 of its review of the Consumer Credit Act 1974. This law gives important protections to people who take out loans, credit cards, and other types of finance.

One of the biggest questions is whether two key protections—Section 75 and Section 140A—should stay in the law or be moved into the Financial Conduct Authority rulebook.

This is part of a wider project to modernise the way consumer credit is regulated. Phase 1 finished in July 2025, and Phase 2 will look at the rights that matter most to consumers.

What Is the Government Considering?

Should Section 75 and Section 140A stay in law?

The government is looking at whether these protections could instead sit within the Financial Conduct Authority’s rules. The Consumer Duty, introduced in 2023, already requires firms to treat customers fairly.

However, some rights—especially Section 75—cannot currently be copied or replaced by Financial Conduct Authority rules. This will influence the final decision.

Avoiding overlap with other laws

There are already several laws and regulators that protect consumers, including:

The Consumer Rights Act 2015
The Digital Markets, Competition and Consumers Act 2024
Complaints handled by the Financial Ombudsman Service

The government wants to ensure protection remains strong, but without unnecessary duplication.

Key Points Raised About Section 75 and Section 140A

Section 75 – who is responsible?

Some lenders say Section 75 is unclear—especially when there are third parties involved in a transaction.
Others want liability to be limited only to the part of the price that was financed, not the full cost.

Section 140A – unfair relationships

Many firms argue this section is complicated and overlaps with Financial Ombudsman Service powers.
Consumer groups strongly disagree. Recent Supreme Court decisions on motor finance have shown that courts can act more quickly and deliver stronger outcomes than the Financial Ombudsman Service. This has reinforced the value of Section 140A.

Voluntary termination rights

These allow a customer to end a hire‑purchase or conditional sale agreement once they have paid 50 per cent of the total amount. They were designed to help people in financial difficulty, but they are now used widely, so their future is being reviewed.

Time orders

These are court orders that allow repayment terms to be adjusted. They are rarely used, and opinions differ on whether they are still useful.

Parliamentary clarification on timeshare mis‑selling

Recent written parliamentary questions confirmed that issues such as mis‑selling or fraud in timeshares are dealt with through existing consumer laws, not by the Financial Conduct Authority. Criminal sanctions now sit within the Digital Markets, Competition and Consumers Act 2024.

Why Does This Matter?

These protections play a major role in helping consumers challenge:

Mis‑sold products
Unfair lending
Finance agreements that were unsuitable or unaffordable

Section 75 has helped many people recover money when a supplier went out of business. Section 140A has been a vital tool in cases involving aggressive sales techniques or hidden charges. Consumer organisations are concerned that the Consumer Duty is still new and untested. They believe these long‑established protections should stay in legislation until it is clear that the new regime works as well.

What Happens Next?

The government has not set out a full timetable. Phase 2 proposals will be published by HM Treasury in due course.

At the same time, the Financial Conduct Authority is working on a redress scheme for motor finance commission cases, which is expected to come into effect in 2026.

Our View

At Edwin Coe, we believe these statutory protections must remain strong. Any move from legislation to Financial Conduct Authority rules should not reduce consumer rights or make it harder for people to obtain redress.

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