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Consumer Credit
Credit is a system which means that if at a particular time, you do not have
sufficient money to afford a product, you can still have it, provided that you pay for
it in installments.
What Is Credit Sale?
The Consumer Credit act defines credit sale as the transfer of goods from a seller to
a buyer, where a price is paid to the seller in exchange, and it is agreed that this price
shall be paid in five or more installments.
When you buy goods on credit, you will immediately have ownership of these goods, and
so are under a contractual obligation to complete your purchases of the goods by paying off
all of your installments. If the credit sale is for between £30 and £5000, there must be
a written agreement between the seller and the buyer.
What Are My Rights On Credit Goods?
Goods bought on credit, like any other goods, come under the Sale Of Goods Act, 1979
(see Sale of Goods Act) and you are entitled to
a full refund, if they are found to be
- Not of merchantable quality
- Not fit for the purpose they were made for
- Not as described/advertised
Credit Cards
Credit cards are a slightly different type of credit, and are effectively loans. When you
wish to buy something, but do not have the money, the credit card company will pay for
the goods, which then become yours, and when your credit card bill comes through, you must
pay back this money to the credit card company, plus interest.
Goods between £500 and £30,000 bought on credit cards have the added protection that if
they are found to be faulty, you can claim from the credit card company for breach of
contract and misrepresentation. If a company goes bankrupt after you have bought goods, you
cannot claim a refund if they are faulty, but when they are between £500 and £30,000
and bought on credit, you may be able to claim from the credit card company for breach of
contract and misrepresentation. This is because the credit card company has an obligation
to ensure that the financial state of a company is sound, before they give you the credit
to buy from them.
You should always buy goods on a credit card if the company is not well known, or if
its situation is unstable, and the goods are valuable.
© Luke Culverwell 2001, All Rights Reserved |
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