Lloyd Green & Co, solicitors in Essex, explain your rights as a consumer when buying on credit.
It’s a little known fact but did you know that you may actually be able to make a claim for compensation from your credit lender when you have purchased goods, either on your credit card or via a loan, which were faulty or damaged?
Most people think that compensation would need to be sought directly from the trader who sold them the faulty goods in the first place and yes, under most circumstances, this would be true but there are a couple of instances in which a consumer may be able to claim compensation for faulty goods from their credit card or loan company.
Read on to find out how……..
Equal Liability
Equal liability means the consumer could make a claim against the credit lender or against both the credit lender and the trader responsible for selling the faulty goods without having to make a claim against the trader in the first instance.
A consumer has a right to make a claim against the credit card or loan company when the goods purchased cost more than £100 but less than the value of £30,000.
The equal liability claim can be made against:
- The credit card company who issued the credit card used to purchase the goods
- Any other credit lender or loan company which the trader has arranged to provide the credit for the purchase of the goods. An individual cannot make a claim against a loan or credit company they themselves have chosen and taken out a loan with to pay for the goods
- An individual will also be unable to make a claim if the goods were purchased on a conditional sale or hire purchase basis
Putting in an Equal Liability Claim for Goods costing over £30,000
New legislation states that, as from 1st February 2011, if an individual purchases faulty goods which total more than £30,000 they may now be able to put in an equal liability claim, although the faulty goods will need to have been purchased on or after this date.
The rules are slightly different when making a claim for goods costing the consumer over £30,000 than they are for goods which cost less than £30,000 and the credit lender can only be approached by the consumer when:
- The consumer has approached the trader responsible for supplying the faulty goods but they have refused to pay compensation
- The consumer has been unable to track down or get a response from the trader
- The trader is no longer in business
The claimant’s case will also need to fit the following criteria:
- That the credit the individual acquired was used to pay for something specific such as a newly fitted kitchen, a new bathroom or a vehicle and the reason for the loan must be stated on the loan
- That the credit acquired was less than £60,260.00
- That the goods purchased were not done so using the individual’s credit card
- That another form of compensation or replacement for the faulty goods hasn’t already been made by the trader and accepted by the claimant
- That the loan was not acquired for business purposes
- That the loan acquired was not a conditional sale or hire purchase agreement
- That the credit was put in place by the trader responsible for selling the faulty goods and not by the claimant
Chargeback
On occasions where an individual may not be entitled to make an equal liability claim they may be able to claim a chargeback to their account.
Chargeback schemes are run by banks and debit card companies and are usually approached by individuals who have purchased faulty goods using their debit card however individuals who have purchased faulty goods using a credit card can also claim chargeback so long as the purchase cost no more than £100.00.
If you think you have a claim then you will need to contact your bank or debit card company who will be able to give you further advice on claiming a chargeback depending on your circumstances.
An individual may be able to request a chargeback if the goods they have ordered either turn up damaged or faulty or if the goods don’t arrive at all.