The Act, which came into force on Friday 6 April, will allow consumers to challenge unfair credit agreements in court and take complaints about lenders to the Financial Ombudsman Service.

Businesses are expected to benefit from the reforms outlined in the Act as it seeks to create a level playing field in the credit industry. It will also promote competition among lenders, as reported in a press release from the Department of Trade and Industry (DTI).

Consumer Minister Ian McCartney said:

"The Consumer Credit Act beefs up protection for borrowers, especially those with debt problems. It helps them challenge unfairness and protects them from dishonest lenders who try to rip them off. Our aim is a market that protects all consumers and is fair to honest lenders, leaving those without scruples with nowhere to hide."