Advice to Consumers - Buying on Credit

Information and advice about buying goods and services using credit.

Advice and support for consumers in Solihull is now provided by Consumer Direct.
Consumer Direct is a telephone and online consumer advice service, which is supported by local authorities in The West Midlands and by Government.

Consumer Direct works in partnership with Local Authority Trading Standards Advice Services offering first level advice and information on a wide range of consumer issues. More complex problems, or complaints requiring further investigation or assistance are referred to Trading Standards or other advice services

To speak to a Consumer Direct adviser, please call 08454 04 05 06. Opening hours are 8.00 a.m. and 6.30p.m. Monday - Friday or 9.00a.m. to 1p.m. on Saturdays. (Minicom users should call on 08451 28 13 84). To e-mail Consumer Direct, please Contact us via the Consumer Direct website.

A wide range of consumer information and advice is also available online from the Consumer Direct website at http://www.consumerdirect.gov.uk/

Buying on credit - what extra protection do you get?

When you purchase goods and pay by either a credit card or a credit agreement that the trader has arranged with a separate finance company and the total cost of the transaction is in excess of £100, you will also have an equal claim against the finance company. These rights, known as equal liability, are provided by Section 75 of The Consumer Credit Act 1974.

Credit Cards

Section 75 of the Consumer Credit Act provides that if you buy goods or services costing in excess of £100 but no more than £30,000 using a credit card, should the goods prove to be defective or the service not delivered, you will have an equal claim for compensation against both the seller of the goods or service and the finance company.

Deposits

You only need to pay over £100 on credit to be covered by this protection. You can pay £100 on credit card and the remainder in cash and the whole amount you have paid will be protected.

Charge cards and debit cards

Equal liability under section 75 only applies to credit transactions. You do not have equal liability rights if you pay with a debit card (where the money is taken out of your account immediately) or a charge card (where you must pay all you owe in a monthly period).

Credit Sale

These are agreements where the goods are supplied by the trader who, acting as an agent, then arranges finance for the consumer with a separate finance company. In this type of credit agreement section 75 applies.

How equal liability works

If a consumer has a claim against a trader for the supply of goods or services, then under section 75 he has a like claim against the credit grantor. He can therefore choose whether to sue the supplier, the credit grantor or both. It is sensible to approach the trader first, if he is still in business.

How to solve your problems

• If you contact the credit company, write to the Head Office and give your account number. You can find the head office address and account number on your credit agreement or any statements they send you. It shouldn't matter whether you have already paid all the instalments.
• Send your letter by Recorded Delivery (you must go to the post office for this). Keep a copy of your letter.
• If you get no reply to your letter, send the credit company a reminder. Send a copy of your last letter as well. Remember to keep a copy of both letters. Send your reminder letter by Recorded Delivery.
• If the credit company asks for more information be as helpful as you can. This may help them solve the problem. If they ask for receipts or other documents, send them copies, not the originals. Keep a copy of your reply.
• If the credit card company offers to do something, but not what you have asked for, you can either accept the offer or negotiate with them for a better offer. Keep a copy of any letter/s you write.
• Be reasonable in what you are prepared to accept. Sometimes it can be better to compromise. Only you can decide.
• If the credit company doesn't reply to your letter, refuses to do anything or makes an offer you are not prepared to accept, you can consider taking the credit company to court. You can pick up further leaflets from the court.

Remember

You can claim against the trader, the credit company or both if the goods or work done have been paid by the trader or by credit arranged by the trader and the cost of the goods or work was more than £100. If you stop your credit payments, you break your side of the agreement and you could be sued and/or find difficulty getting credit in the future.

Contact Details

Consumer Advice and Information in Solihull, is now provided by our partners at Consumer Direct West Midlands. Consumer Direct is a telephone and online consumer advice service, which is supported by local authorities (Trading Standards) and Central Government. If you do need support or assistance from Trading Standards, you will of course be referred to them by Consumer Direct.