The Voice - Consumer's Voice

How does it work?

Good day sir I want clarity on something. I took a bed and TV from a furniture store then I had challenges to pay so last year around May then they came and repossessed their belongings. Then I was told I was blacklisted. Ok it's then then I went to the shop to ask for my credit scores and they told me to pay them P8,000 to settle the credit. So sir I want to understand how it works?

I also want to know what are the procedures to be removed from ITC. Does it mean banks won't help me with a credit record still in the system?

Unfortunately, as we've explained here many times before, this is how hire purchase works. If you don't pay your monthly instalments the store can do several things. Firstly they can ignore any obligations they have to fix any faults the item develops because the item doesn't belong to you, it still belongs to them. That's why it's called 'hire' purchase. Until you've made the final payment, the goods aren't yours. That leads to the second problem if you're behind with your payments. They can repossess their goods immediately and without going to court. That's because when you signed the hire purchase agreement you gave them permission to recover their goods from you.

Then you encounter another problem. Even though you no longer have the goods, you still owe them the money. They might sell the repossessed goods for a small sum and they might deduct that amount from your debt but it's not guaranteed. This debt will never easily go away.

Finally, the company is likely to increase your debt with penalties, interest payments, and charges for every letter they send and phone call they make. They will then register that debt with a credit reference bureau and that record will remain there until you repay the debt completely. Even after that, it will still be there for a couple of years so other lenders can then decide whether or not to lend to you based on your recent history.

I contacted the store and asked them to check how much you owe them and explain it to you. Then you'll need to negotiate a repayment plan that you can afford.

Can they repair it?

Hi Richard. I recently purchased a washing machine from a certain store in Gabs brand new but it was faulty on the first attempt to use it the same month I bought it in. I only used it once and its been 3 weeks. I requested for a refund or them to fix the machine they are telling me they don't offer refunds but rather fix the machine. How do I deal with the store or where do I report them? Sometimes I think these people sell faulty things and that there is like a loophole for consumers and I think it should also have a duration as to how long they should take action more especially with electrical gadgets.

Readers of The Voice will probably know by now that Section 15 (1) of the Consumer Protection Act says that a consumer "has the right to receive goods which are of good quality, in good working order and free of defects". That's simple. The next section of the Act, Section 16, says that if goods are faulty the consumer can return them within 6 months of purchase for a repair, a replacement or a refund. Those are the three Rs. That's regardless of the warranty that the store offers.

However, the store can choose which of these options they prefer and in many cases a store will try to repair a faulty device first before offering us a replacement or a refund. That makes sense for them because it's probably the cheapest option. But what these stores often forget is that they only get one chance to repair it. Section 16 also says that if "within three months the same problem recurs" they can no longer try to repair it and they only have two Rs left, a replacement and a refund.

Finally, it's important to know about Section 14 of the Act which says that we are entitled to "timely performance and completion" of any services a supplier offers us. So let them try to repair it but make sure they don't take too long about it.