Section 18: Reopening of terms of credit agreement by order of Commissioner

18. Reopening of terms of credit agreement by order of Commissioner (1) Where a borrower considers that his credit agreement is extortionate, he may report the matter to the Commissioner giving all the relevant information and documents. B11 – 9 [Issue 1] Borrower Protection Act (2) On receipt of a report under subsection (1), the Commissioner shall carry out an enquiry into the matter and hear the parties. (3) The Commissioner may, where he is satisfied that the credit agreement is extortionate— (a) make an order directing the lender to— (i) amend the terms and conditions of the credit agreement which are extortionate; (ii) repay to the borrower any excess amount paid; (iii) indemnify the borrower or any other person prejudiced by the agreement in such sum and on such terms as may be imposed by him; or (b) make such other order as he thinks fit. (4) Any lender to whom an order has been made under subsection (3)— (a) shall take immediate action following the order of the Commissioner and notify him forthwith in writing; or (b) may apply to a Judge in Chambers for a decision varying or revoking the order, within 21 days of the date of the issue of the order. (5) Where a lender does not apply to a Judge in Chambers under subsection (4) (b), the order of the Commissioner shall be binding on the lender. (6) A credit agreement is extortionate where it— (a) requires the borrower to make payments which are exorbitant; or (b) otherwise contravenes ordinary principles of fair dealing. (7) In determining whether a credit agreement is extortionate, regard shall be had to such evidence as is adduced regarding— (a) prevailing interest rates at the relevant time; (b) the personal circumstances of the borrower and the degree to which he was under financial pressure at the time, having regard to the disclosure made or information given under section 10; and (c) the lender’s relationship to the borrower and the degree of risk accepted by him, having regard to the value of any security provided.