(f )Freda buys and obtains possession of a coat
and dress from Bondsman Mail Order Co Ltd
for £90. She pays this in 20 instalments of
£4.50 each.5 Gerald buys a new DVD player. After two weeks’
use, the player stops working. What are his rights,
and against whom, if the purchase was financed in
the following ways:
(a)cash payment direct to the retailers, Viewscene Ltd;
(b)bank credit card;
(c)HP arranged by Viewscene Ltd with Eazimoney
Finance Co Ltd;
(d)bank overdraft?Part 3Business transactions
400
1 ‘Consumers need clear, consistent information
to be able to make informed comparisons between
the plethora of [credit] products currently available to
them’ DTI (2003), Fair, Clear and Competitive – The
Consumer Credit Market in the 21st Century
p 5.
Evaluate the adequacy of the provisions of the
Consumer Credit Act 1974 which are designed to
address the informational needs of consumers
beforethey enter into a credit agreement.
2 Sections 56 and 75 of the Consumer Credit Act 1974
together provide a powerful remedy for consumers
who have bought defective goods on credit.
Outline the scope of these provisions and assess
their effectiveness in protecting consumers.
3 Wesley agrees to take a car on HP from Tite Finance
Co Ltd for a total HP price of £6,500, made up of a
deposit of £1,700 plus 24 monthly payments of £200.
(a)The company receives a letter from Wesley
terminating the agreement because he has lost
his job. What will Wesley have to pay if he
terminates in the following situations:
(i) after he has paid three instalments but
before the fourth is due;
(ii) after he has paid four instalments and the
fifth and sixth are still owing;
(iii) after he has paid 12 instalments and before
the 13th is due, but the car was badly
damaged in an accident?
(b)Wesley does not terminate the agreement but fails
to pay any instalments after the seventh instalment.
What action can Tite Finance Co Ltd take?Specimen examination questions
http://www.berr.gov.ukThe government’s White Paper –
Fair, Clear and Competitive – The Consumer Credit Market
in the 21st Century(Cm 6040) – can be found on the
Department for Business, Enterprise & Regulatory
Reform’s website.
http://www.oft.gov.ukThe OFT website provides detailed
information for both consumers and credit businesses
about the Consumer Credit Act 1974.
http://www.ccta.co.ukThe website of the Consumer
Credit Trade Association provides information, products
and services for credit-related businesses.Website references
Visit http://www.mylawchamber.co.uk/riches
to access selected answers to self-test questions in the
book to check how much you understand in this chapter.Use Case Navigatorto read in full some of the key cases
referenced in this chapter:
Wilsonv First County Trust[2003] 4 All ER 97.CASE(^)
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