Understand what you sign – Hire Purchase Agreements

November 29, 2017

Purchasing household items is no longer a far-fetched dream for consumers as Hire Purchase (HP) companies tend to offer lucrative deals with affordable interest rates.

Consumers have the simple task of getting their documents in place and securing the deal.But how often do consumers read and understand the terms and conditions of their HP account?

This is definitely not the first time the Consumer Council of Fiji has picked up this issue. As a matter of fact with each passing year, the issues pertaining to hire purchase transactions seem to be escalating.

Whilst the Council unfailingly calls on consumers to read and understand the terms and conditions in their HP Agreements prior to committing to such agreements, some consumers only tend to read the facts when trouble hits them.

In a handful of cases, consumers have ended up contravening their HP agreements by: keeping the items at premises other than the that specified during the time of purchase, leaving the item in someone else’s custody and having more than one hirer for the item whereas the agreement has the signature of only one hirer. Such acts are strictly prohibited under the HP agreements.

When consumers end up doing the odds, the matter can become nightmares for the consumers. A similar situation was encountered by Felisha.Felisha had purchased a four banner gas stove from a HP company earlier this year.

However, the account it was purchased under did not belong to her but her partner. They had mutually agreed to purchase the item under the partner’s account solely, while Felisha agreed to make the repayments.

The HP Company had no knowledge of this arrangement between the two. For some time everything seemed fine, however, after some time Felisha and her partner started facing some personal problems.

Due to this, the partner moved into a separate flat and seemed to have taken the gas stove with him without discussing with Felisha. However, the HP Company started calling Felisha to make payments as the account was in default.

This is because she had given her contact to the credit provider. Hence, she visited the HP Company to ascertain the status of the account and whether the company had repossessed the item.

The Company failed to facilitate her request as she was not the account holder.

Concerned with the turn of events, she lodged her complaint with the Council.The Council’s liaison with the HP Company established that the item was not repossessed by them.

Also, the HP Company made it clear to Felisha that in future they would not accept any queries from her regarding the item unless she got a written consent from the account holder.

The Council explained the same to the complainant, as the HP policy was clear in indicating that the item was purchased by her partner and as per the agreement, he was liable to keep the product under the address specified in the contract.

Based on such cases, the Council calls on consumers to act responsibly when it comes to purchasing items on credit by couples.

Consumers should not let their personal differences come in the way of keeping up with the payments.

Moreover in cases where consumers wish to make a purchase under someone else’s name, it is advisable to decide whether the item would be kept at the account holder’s address or at the premises of the person making payments, if the addresses are different.

The hire purchase company needs to be informed of any arrangements made between the parties.It is worth noting that the HP agreements entail that in cases where there is more than one customer, the following may apply:- their obligations under the agreement shall be joint and several;- the exercise of their rights by one of them shall bind the others.

As such, consumers who purchase items in partnership under a HP account need to be mindful of the fact that they need to understand the consequences of their actions, as this will affect the status of the account.

In the present case, Felisha was making payments for the 4 banner gas stove but she was unaware of what happened with the item once it was taken away from her premises.

Further, she was unable to find out where the item was from the HP Company for the simple reason that her partner was the owner of the account and had not given Felisha the consent to seek information regarding the item.

Consumers are urged to tread carefully in such matters in order to ensure that they are able to utilize the item for which payments are done in a timely manner and also to be mindful of HP contracts especially during personal disputes.