As usual, some readers were tripped up by deferred credit agreements. SJ of Derby approached me some three years after she had purchased two matching settees with a loan from First National, now a GE Money Home Lending consumer brand.
She had intended to pay off the £998 balance before the end of the 12-month interest-free period. However, the settees proved faulty and, by the time replacements were delivered and shown to be a mismatch, the 12 month deadline was past.
Then began a wrangle during which SJ wrote 35 letters. Meanwhile various charges and interest increased the debt to £2,000 with the store also demanding £450 - even if the goods were returned.
As many home owners plan to make improvements to their properties in the summer, the OFT is highlighting the options available to consumers to protect themselves should something go wrong.
Tips for consumers:
Christine Wade, OFT Director of Consumer Regulation Enforcement said: It is important for consumers who are asked to pay considerable sums in advance for home improvements to be aware of the ways in which they can protect their interests. Going to court can be difficult and expensive, but these simple steps can provide consumers with some redress should things go wrong.
Notes:
1. Section 75 of the Consumer Credit Act 1974 says that a credit grantor is equally liable with the supplier for any breach of contract or misrepresentation if all of the following conditions are met:
Section 75 does not cover debit or charge cards.
2. The Unfair Terms in Consumer Contracts Regulations (UTCCRs) came into force in 1999 (superseding the UTCCRs 1994) and apply to standard contract terms used with consumers. The UTCCRs protect consumers against unfair standard terms in contracts they make with traders. The OFT, together with certain other bodies, can take legal action to prevent the use of potentially unfair terms. A term is unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties rights and obligations under the contract, to the detriment of consumers. An unfair term in a contract covered by the UTCCRs is not binding on the consumer. Ultimately, only a court can decide whether a term is unfair.
Undertakings under the UTCCRs were accepted by the OFT from B&Q, MFI, Limelight (now HomeForm, the parent company for Moben Kitchens, Dolphin Bathrooms and Kitchens Direct) and Magnet that they would use the payment protection scheme administered by Qualitas to address concerns about contract terms requiring full payment in advance of installation.
Under the scheme, consumers pay a deposit when they order the goods and the full balance just before delivery. But if they express dissatisfaction, either with the product or with the installation, the companies pay 20 per cent of the cost in to an independent trust account administered by Qualitas and cannot access it until the complaint is resolved.
In 2003 the OFT announced that it would be carrying out a review of the Qualitas scheme to monitor its effectiveness. That review has now been concluded following the improvements made to publicity and customer information material by the companies concerned.
Qualitas is an independent standards body financed by members from the furniture and floorcoverings industries and overseen by an Advisory Panel whose members are drawn from the trade, consumer groups and trading standards services. Qualitas is part of FIRA (Furniture Industry Research Association). Qualitas has issued a leaflet for consumers who enquire about its scheme.
Other bodies also provide varying degrees of protection for consumers through alternative dispute resolution or deposit indemnity schemes, codes of practice or approval under the DTI TrustMark scheme.