Businesses Requiring a Licence and Consequences of Not Being Licensed Section 26: Enforcement of agreements by unlicensed trader etc
56.Section 26 amends sections 40(1) and (2) of the 1974 Act to provide that a regulated consumer credit or hire agreement is unenforceable by a person acting in the course of a consumer credit or hire business who is not licensed to carry on a consumer credit or a consumer hire business of a description which covers the enforcement of the agreement. In addition, as under the current section 40, the new section 40(1A) provides that a regulated agreement is unenforceable if the creditor or owner who made the agreement did so in the course of a consumer credit or a consumer hire business but was not licensed at that time to make the agreement. Where a person has made an agreement without being licensed, that person may apply to OFT for an order to treat him as if he had been licensed to make the agreement.
57.Subsections (8) and (9) of the amended section 40 ensure that a person who is not required to have a licence under section 21(2) or (3) of the 1974 Act to carry out the acts referred to in sections 40(1) and (1A) is not caught by these provisions.