HIRE PURCHASE PIT FALLS

A complainant from Manchester wrote to our offices asking us to examine an issue related to Hire Purchase. The complainant had purchased an item with the understanding that she would have 24 months for payment. The complainant having missed a payment date found herself with a balance, which far exceeded her expectation.

The Consumer Afairs Commission (CAC) wishes to remind consumers about the following points:

1. Buying cash is always the cheapest option.

2. Late payments under a HPA results in interest being charged to your account.

3. The bailiff cost is always the cost to the consumer.

4. Under a HPA ownership is not transferred until all payments including any late charges have been made.

5. The vendor should be notified about any change of address during the course of the agreement or a change in your financial position, which could impact on your ability to make payments.

6. If 2/3 or more of the cost has been paid under a HPA, repossession can only take place after the consumer has been in arrears for 3 months or more and the vendor has served a notice stating that the account is in default, as well as, a notice stating their intent to repossess the item.

7. Repossession should be done between 6:00 am and 6:00 pm Monday to Saturday.

8. An HPA maybe terminated at any point. To do so, the consumer should write to the vendor and make all outstanding payments.

The CAC also wishes to remind consumers to read all contract before signing and where portions are unclear to ask for an explanation form someone trustworthy.