Credit - Credit Card - Your Rights When Buying On
Credit
Your Rights When Buying
On Credit
When you purchase goods using
either a credit card or with 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 have an equal claim against
the finance company. This applies even though you
may only have paid the deposit by credit. These rights
provided by Section 75 of the Consumer Credit Act
1974.
Beware - if you do not keep
up payments, you will be in breach of contract and
may be sued for the outstanding balance. Also if you
are buying a car on hire purchase, it is likely that
the finance company (the owners) will repossess the
vehicle. You could also be liable to pay any expenses
that the finance company incurs in carrying out any
necessary repairs to the vehicle.
Credit agreements signed at
the traders premises are not cancellable. However,
if you sign the agreement in your home, you have a
short period before the agreement becomes binding
and you can cancel without any financial penalties.
Benefits of Using Your
Credit Card
Under the provisions of Section
75 of the Consumer Credit Act 1974, if you buy goods
or services costing in excess of £100 using
a credit card, should the goods or services prove
to be defective, you will have an equal claim for
compensation against both the seller of the goods
or service and the finance company.
Section 75 (equal liability)
only applies to credit transactions, therefore, the
finance company does not have any liability for purchases
that have been paid for by chargecards as these are
debit cards not credit cards. Some American Express
and Diners Cards are examples of debit cards.
This benefit will also apply
if you have purchased goods abroad, which cost over
£100, which then prove to be faulty. It will
be far easier to pursue a claim against the finance
provider than to try to pursue a claim through a foreign
court. If you buy goods, which cost over £100,
using your credit card, you have an equal claim against
the finance company. This is very useful if you have
faulty goods and the seller has ceased trading as
you can hold the finance company liable for the total
value of the contract.
These companies keep records
of the credit worthiness of the majority of UK residents
and obtain the information from a variety of sources
such as courts and companies who are owed money. They
sell the information to finance companies who, before
they authorise a loan, need to check to see whether
you have defaulted on any loans or have any outstanding
County Court Judgements (CCJ).
The finance company will base
its decision to loan on the information supplied by
the agency.
As the agencies use a point
scoring system, you could be refused credit purely
because, without any records, the finance company
may not be willing to take a risk by authorising a
loan.
