HIRE PURCHASE, LAY away and lease sale agreements - Such sale agreements become increasingly popular around the Christmas season.
A number of consumers want new beds, living room or bedroom suites. Many of the larger furniture and appliance dealers offer "no deposit" deals, where you only pay the first month's instalment to get possession of the item as well as differed payment deals, which allow the consumer to take possession of the item, paying the first instalments months later. It is very important that consumers seek to understand their rights & responsibilities under these sale agreements in order that they will know what to expect and so avoid being swindled or taken advantage of. Make note of the following advice:
Hire purchase & conditional sale agreements:
Hire purchase and conditional sale agreements (e.g. lease financing) are arrangements between the buyer and seller, which allow the buyer to gain possession of the item (s) purchased by making an initial payment. Ownership is however not transferred until all subsequent monthly instalments are made over the set period of time agreed in the contract.
The Hire Purchase Act of 1974 regulates the hire purchase agreement. Some features of a hire purchase agreement of which consumers should be aware are:
1. The hire purchase price is usually higher than the cash pPrice (even excluding potential late charges or other penalties).
2. The agreement requires that you pay a stated number of monthly instalments on a set date of the month for a specified period. These payments dates may be based on the date of delivery or when the down payment was made. Payment after this date will result in additional interest or late payment charges being applied to the account.
3. If the payment date falls on a Sunday or public holiday, the monthly instalment must be paid prior to or on the last working day before.
4. The bailiff cost is always the cost to the consumer.
5. Under a hire purchase agreement ownership is not transferred until all payments including any late charges have been made and all other conditions specified in the agreement are fulfilled.
6. 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 your ability to make payments.
7. Under the Hire Purchase Act, if the purchaser has paid over 2/3 or more of the cost under a hire purchase agreement, the vendor is authorised to repossess goods without going to court after the consumer has been in arrears for three months or more and notice has been served stating that the account is in default, as well as, a notice stating the vendor's intent to repossess the item.
8. According to the Hire Purchase Regulations 1974, the Notice of Default must be for a period no less than seven (7) days. If the purchaser has paid more than 50% of the arrears within the notice period, the vendor must extend the period. If the account remains in arrears for the full amount then the second notice, that is, the Notice of Repossession must be served before the act of repossession can legally take place.
9. Repossession should be done between 6:00 am and 6:00 pm Monday to Saturday. Public holidays are not included.
10. Where the act of repossession contravenes the law, the act provides that the contract shall be terminated and the purchaser and guarantor will be able to recover all moneys paid to the vendor under the agreement.
The CAC also wishes to remind consumers to read all contracts before signing, and where portions are unclear to ask for an explanation from someone trustworthy.
To be continued next week.
Do
you have a problem? Is something bothering
you? Write to