The Consumer Credit Act is the main piece of legislation that governs how credit providers must treat consumers.

It contains important provisions, including your rights in relation to your credit files, and the extra protection you get when you pay for something with a credit card.
Extra shopping rights when you pay with a credit card

If you buy something that’s faulty, doesn’t do what it is supposed to, or is not what you ordered, you have rights to a refund, repair or replacement.

You have similar kinds of rights if a service (such as work on your home) is not carried out properly. In these cases, your legal rights are against the retailer you bought the item from, or the trader you contracted to do the work.
‘Jointly and severally liable’

However, if you paid on credit card, the card company is ‘jointly and severally liable’ under Section 75 of the Consumer Credit Act, which means it is equally responsible, along with the retailer or trader, for the quality of the goods or service. This can be particularly useful if the company you bought from has gone bust or you can’t contact them for another reason.

A credit provider is only liable for goods or services costing between £100 and £30,000, and if the amount of credit is no more than £25,000.

However, a credit provider is still liable even if you made only part of the payment (a deposit, say) on your card.

But the law applies only to credit cards and not to debit cards (such as Visa Delta) or charge cards (where all charges must be settled at the end of the month).
Goods purchased overseas

In a landmark ruling, the House of Lords has confirmed that Section 75 does apply to foreign transactions. In 2004 the High Court said the act didn’t apply when people made purchases abroad. But that has since been overturned by the Court of Appeal.

The House of Lords has confirmed the protection also applies if you buy goods for delivery to the UK from overseas by telephone, mail order or over the internet.

Which? has always believed section 75 applied whether a card is being used in the UK or overseas.
Your right to cancel a loan

When you sign up for credit or take out a loan, you may be entitled to a ‘cooling-off’ period during which you can cancel the agreement without penalty.

If you sign the agreement in your home or anywhere else that is away from the credit company’s office, you get a five-day cooling-off period.

When you sign up for credit, you must be given a written credit agreement, including information about your rights to cancel, and your cooling-off period starts when you receive these.
Be careful where you sign

However, if you sign the credit agreement at the company’s offices, you do not get this cooling-off period, so you should be certain you want the credit, and be sure of its terms, before you sign.
Your rights to your credit files

When you apply for a loan or a credit card, the card company or credit provider may apply to a credit reference agency to check your credit history, and other details, for example, where you have lived in recent years. It will use this information when it decides whether to give you a card or a loan.
Checking you file

If you believe that you have been unfairly denied credit, you can ask the credit provider which credit reference agency or agencies they used.

You can then contact the agency or agencies to get a copy of your credit file, which they must provide for £2. There are three credit reference agencies: Equifax, Experian and CallCredit.

If you believe your file contains inaccurate or out-of-date information, you can ask for it to be amended, under the Consumer Credit (Credit Reference Agency) Regulations 2000.
Your right to pay less interest if you pay off a loan early

If you decide to pay off a loan or other credit agreement earlier than the full term, you should not have to pay the full amount of interest in the agreement, under the Consumer Credit Act.

If you want to pay off a loan early, you should write asking the credit provider how much you must pay to clear the debt.

How much interest you have to pay depends on when you took the loan out and how much of it you have already paid off.

If the credit provider hasn’t answered your letter asking how much your should pay, or if you believe they may be trying to charge you too much, you contact the Office of Fair Trading to see if will take the matter up with the creditor.

ShareThis

Contracts can be written or verbal, but it’s always best to get a written contract if you can. And read the small print carefully before signing a contract – it could save you a lot of money and hassle later.

In most cases, once you’ve signed a contract, you’re bound by it, and you can’t change your mind. But, in some circumstances, the law gives you the right to cancel a contract.
If you change your mind about the order

Some types of contract are covered by cooling-off periods. This is a period during which you can cancel a contract without having to pay anything if you change your mind. The exact details vary depending on the type of contract.
If the contract was made at home

If you enter into a contract away from the trader’s premises, for example during a visit to your home, the ‘Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008′ give you a seven-day cooling-off period during which you can cancel.

There are some contracts these regulations don’t apply to:

* things worth less than £35
* perishable goods, such as food and drink
* land, insurance and investment agreements.

Where to go next

The Department for Business, Enterprise and Regulatory Reform has more information about the Doorstep Selling Regulations. If you think a salesperson has breached the regulations, contact your local Trading Standards Department (in England, Wales or Scotland) or the Department of Enterprise, Trade & Investment (in Northern Ireland).

If you have a problem with a contract for gas or electricity supply, contact your energy supplier in the first instance. Consumer Direct can also offer advice on problems relating to energy companies.See our Dealing with energy suppliers advice guide for more help.
If the contract wasn’t made in person

If you buy something over the phone or the internet, or by mail or fax order, the Distance Selling Regulations give you a cooling-off period of seven working days during which you can cancel the contract.

If you’re buying goods, the seven-day cooling-off period starts the day after receipt of the goods.

If you’re buying services, the cooling-off period starts the day after you agree to go ahead with the service. If you agree with the service provider that the service will start straight away, you waive these cooling-off rights.

The regulations don’t cover:

* financial services,
* holiday or travel arrangements,
* tailor-made items or perishable goods, such as groceries, or
* CDs, DVDs or software if you’ve broken the seal on the wrapping.

Where to go next

For more information about the Distance Selling Regulations read our online shopping report. If you think the Regulations have been breached, contact your local Trading Standards Department (in England, Wales or Scotland) or the Department of Enterprise, Trade & Investment (in Northern Ireland).
If the contract is for credit or hire purchase (HP)

Under the Consumer Credit Act 1974, contracts for loans, credit or HP must be signed by both you and the credit provider to be valid.

If the contract was signed away from the supplier’s business premises (at your home, for example), you have a five-day cooling-off period to cancel it. By law, the credit provider must tell you about your right to cancel. The five days start when you receive your notice of cancellation and a copy of the contract. If you sign a credit contract at the provider’s business premises, you don’t have this cooling-off period.

If you take out a credit agreement ‘at a distance’ (by phone or over the internet, for example), under the Financial Services (Distance Marketing) Regulations 2004 you have 14 days to cancel.
If there is a problem with the order

The law also protects you against poor service and shoddy goods by allowing you to cancel a contract.

Under the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, a seller must provide goods that are ‘fit for the purpose’, ‘as described’, and of ’satisfactory quality’.

If a supplier fails to fulfil its side of the contract, for example by not delivering goods that are of a satisfactory quality, you might be entitled to end the contract.

If you bought online, you can cancel at any time up to seven working days after goods are received and without having to give a reason.
Making time of the essence

However, if you didn’t buy online, or your cooling off period is over, you can only cancel a contract if you made ‘time of the essence’ (specified that you wanted the goods by a particular date, for example for someone’s birthday or Christmas).

You can also cancel if the seller doesn’t provide the goods or service within a ‘reasonable’ time. But sellers often don’t specify a time limit for delivery and defining what is ‘reasonable’ can be tricky.
If the terms of the contract are unfair

Under the Unfair Terms in Consumer Contracts Regulations companies must not include unfair terms in their contracts. Unfair terms are ones that are biased in favour of the supplier and cause detriment to the consumer, or try to take away some of your legal rights. If terms in a contract you’ve signed are deemed unfair by a judge, you may not be bound by those terms. But the rest of the contract will still stand.

ShareThis

* ‘as described’,
* ‘of satisfactory quality’, and
* ‘fit for purpose’ – this means both their everyday purpose, and also any specific purpose that you agreed with the seller (for example, if you specifically asked for a printer that would be compatible with your computer).

Goods sold must also match any sample you were shown in-store, or any description in a brochure.
Retailer or manufacturer

In most cases, your rights are against the retailer – the company that sold you the product – not the manufacturer, and so you must take any claim against the retailer. However, if you have bought something on hire purchase (HP), it is the HP company that is responsible.

If you think you have a claim under the Sale of Goods Act for one of the reasons above, you have several possible remedies, depending on the circumstances and on what you want done.
If you want to get your money back

If you buy a product that turns out to be faulty, you can choose to ‘reject’ it: give it back and get your money back. However, the law gives you only a ‘reasonable’ time to do this – what is reasonable depends on the product and how obvious the fault is. However, even with something like a car, you usually have no more than three to four weeks from when you receive it to reject it.
If you want to get a faulty item replaced or repaired

You have the right to get a faulty item replaced or repaired, if you’re happy with this (or if it’s too late to reject it). You can ask the retailer to do either, but they can normally choose to do whatever would be cheapest.

Under the Sale of Goods Act, the retailer must either repair or replace the goods ‘within a reasonable time but without causing significant inconvenience’. If the seller doesn’t do this, you are entitled to claim either:

* reduction on the purchase price, or
* your money back, minus an amount for the usage you’ve had of the goods (called ‘recision’).

If the retailer refuses to repair the goods, you may have the right to arrange for someone else to repair it, and then claim compensation from the retailer for the cost of doing this.

You have six years to make a claim for faulty goods in England, Wales and Northern Ireland; in Scotland you have five years.
What you need to do to prove your claim

If your claim under the Sale of Goods Act ends up in court, you may have to prove that the fault was present when you bought the item and not, for example, something that was the result of normal wear and tear.
Six months…and counting

If your claim is about a problem that arises within six months of buying the product, it’s up to the retailer to prove that the goods were fit for purpose – or ‘as described’ – when it sold them. It is also responsible for proving that the problem was caused by you (for example, because you had an accident with the item that damaged it). Beyond six months, it’s up to you to prove that the problem was the retailer’s.

So you may need to prove that the fault was not down to wear and tear or damage you caused, and that the product (or a component) should have lasted longer than it did. To do this you may need an expert’s report, for example from an engineer or mechanic.

ShareThis

Retailers must display total prices clearly and accurately. Prices must include VAT (except in advertising aimed primarily at business customers) and any additional costs, such as delivery, must be clearly displayed.

The same principle applies to holidays: any extra charges that you can’t avoid, such as airport taxes or transfer fees, should be included in the total price.

The law applies to prices shown on products, on shelves, or in catalogues or advertisements, and online. It also applies to prices given over the phone.
If prices are advertised incorrectly

It is against the law for a trader to deliberately give misleading or wrong prices, and they can be prosecuted for doing this.

However, if the price of a product is just simply wrongly labelled you don’t automatically get to buy it for that price. For example, if a TV worth £599 has accidentally been labelled as £5.99 you don’t, unfortunately, have a right to buy it for £5.99.
A retailer’s right to refuse to sell

When a retailer displays a product for sale, legally it is giving you ‘an invitation to treat’, which means it is inviting you to make an offer to buy. The retailer can refuse that offer if it decides that it doesn’t want to sell you the goods. To have a legally-binding contract the retailer must have accepted your offer to buy. So your rights depend on where in the sale process you are.
Before you pay

If you take a wrongly-priced item to the till and the assistant spots it, they can refuse to sell it to you for that price. If you order an item on the internet, you don’t have a legally-binding contract until the retailer has contacted you to confirm the order. If the wrong price is spotted before the retailer confirms the order, they do not have to sell to you at that price.
After your order has been accepted

If your offer has been accepted (for example, you pay a deposit, or receive a confirmation email), generally you can insist that the retailer sells you the goods for the price they were advertised at.

If the retailer wants to charge you more, you may be able to buy the same item elsewhere and claim against the original trader for the difference in price. To do this you should write to the retailer in the first instance, explaining what you are doing. If it doesn’t agree to refund you the money, you will normally then have to take a claim to the small claims court.

The trader could try to argue that it made a mistake with the pricing which could make the contract void. But it would have to show that the price was so low that you must have known it was not genuine: for example, a new leather jacket with a price tag of £2 on it.
After the transaction is completed

If a retailer sells you something at the wrong price, the transaction is completed and you have your goods, it can’t insist that you pay the extra at a later date.
Price comparisons with other stores

Many stores give price comparisons so show how much the same goods would cost if you bought them elsewhere. Traders must make sure that comparisons are accurate, current and for exactly the same products.

ShareThis

Buying on credit gives you extra rights if, for example, goods are faulty. If a trader has a deal with a finance or credit card company to allow you to pay by credit, you have extra protection. This applies if the goods cost more than £100, even if you only pay a deposit. The credit company is equally liable for any claim you have against the trader. For example, if goods are not delivered or are not what you ordered, or are faulty, you may be able to claim from the credit card or finance company. It is best to approach the trader first, but you do not have to.
Auctions

You may have fewer rights than when you buy from a shop and you cannot back out of a deal once the hammer has fallen. Auctioneers can refuse to be responsible for faulty goods. Read any notices and catalogues carefully and look out for any exclusion clauses. Check any conditions of sale such as terms and methods of payment, deposits and time limits for removal of goods.
Secondhand goods

When you buy secondhand from a trader you have the same rights as when you buy new goods, but you must bear in mind that secondhand quality is unlikely to be the same as new. You can, however, still claim you money back or the cost of repair if the goods are faulty (unless the fault is a matter of the wear and tear to be expected with secondhand goods, or it was obvious or pointed out to you before you paid).
Buying privately

You have fewer rights when buying from a private seller, for example, through an advert in the local paper. Goods only have to be ‘as described.’ Your rights will depend on what you are told by the seller about the value and condition of the goods. If the seller says anything misleading about the condition of the goods and you buy on a basis of what is said, then you will be able to take action. Take someone with you as a witness and get answers to the vital questions. You could also ask for a written description.
Watch out for traders who pretend to be private sellers. This is illegal. If you have bought faulty goods from someone you suspect may not be a private seller (for example, you see lots of adverts with the same telephone number, or the seller insists on meeting you at your home) contact your local trading standards service which should be able to tell you whether the seller is a trader. If this is the case, your statutory rights apply. The trading standards service can also take action against the trader.

Safety

It is an offence for a supplier to sell goods unless they are safe. This applies to both net and secondhand goods, but not to antiques or goods needing repair or reconditioning, provided you were clearly informed of this fact. If you believe you have bought unsafe goods, contact your trading standards service.
If new goods turn out to be unsafe and cause death, personal injury or damage to other property intended for personal use, you may have a claim against the manufacturer.

Unfair contract terms

If you have entered into a contract on the trader’s standard terms of business, the law says that certain types of terms which act against the consumer’s interest may be unfair and unenforceable. For example, a shop may display a sign saying No refunds given. Making a statement like this about goods is also an offence (unless there is also a statement that your statutory rights are not affected). The same applies to clauses which seek to exclude liability for death or injury resulting from negligence in making goods.
If you think you have entered into an unfair standard contract you may wish to seek advice from your local trading standards service or Citizens Advice Bureau. You can also write to the Director General of Fair Trading. When he receives a complaint about a term which he considers to be unfair, he can take action in court to stop its use in future contracts. He cannot, however, get directly involved with individual cases.

Goods on order

If you order something not in stock or which requires delivery, you can arrange a date by which you must have it. If it does not arrive by then, you can cancel your order. If you do not arrange a fixed date, the seller must still deliver in a reasonable time. If you think enough time has passed, tell the seller that if the goods have not arrived by a certain date (perhaps within 14 days), you want your money back. But if you agree at that point to wait longer – say an extra month … you cannot cancel in that time.
When you order goods, you should arrange a fixed price with the seller. You may agree to pay the extra if the price goes up before delivery. Make sure you know where you stand, preferably in writing.

Deposits

Do not pay anything in advance unless you really have to. If the company goes out of business you will probably lose all the money you have paid.
Sometimes you will have to pay some or all of the money in advance, for example, for made-to-measure goods. Avoid paying up front to a firm you know little or nothing about, particularly if the address is just a box number and postcode. Try to find out something about the firm. For example, does it belong to a trade association with a scheme to protect prepayments? If the firm is local, is it in the telephone book? If you do pay in advance, get a receipt.

If you pay a deposit and then cancel your order, the seller may be able to keep your deposit and claim damages. Check whether a deposit is returnable and, if so, in what circumstances.

Guarantees

A guarantee can be a useful back up if you have to complain. This is in addition to, not instead of, your legal rights. With some goods, you get a manufacturer’s guarantee but it is still up to the seller to deal with your complaint.
You may be offered an extended guarantee or warranty when you buy expensive goods, such as a washing machine or television. You may have to pay for this and, in general, it will be expensive compared to the amount you would be likely to pay out in repair costs. Check exactly what the warranty does and does not cover, and consider whether the peace of mind it gives is really likely to be good value for money.

Manufacturers cannot use guarantees to limit their liability for damage or loss where this results from a defect in their products, caused by their negligence.

Misleading Prices

It is a criminal offence for traders to make misleading price claims. For example, ‘Was £120. Now £99.99′ is misleading if the goods were never on sale at the higher price. If you feel you have been seriously misled about a price, tell your local trading standards service which may be able to investigate.
Traders should not mislead you with false descriptions about goods. If you buy a used car which shows 10,000 miles on the clock, this should be correct, unless you have been warned by the dealer that the reading may be wrong. If you have been seriously misled, tell your local trading standards service.

ShareThis