Friday, 3 February 2006

The small print

Last week we went back to one of our favourite subjects: store credit. We extended an invitation to all the stores that offer credit schemes to help us develop a Voluntary Store Credit Charter. This would contain pledges that the stores would make and we suggested a few to begin with.

Firstly stores should be totally open about their credit schemes. They should outline in clear, simple terms exactly how their credit scheme works, what the charges will be and must give an accurate and complete explanation of what the finance charges are.

We also want them to restrain their finance charges. Some of the interest rates we’ve seen are staggering. They’re almost as high as the rates you’d get from a loan shark on a street corner.

Everything must be in writing. Every condition, every charge, every penalty must be in the written proposal that the customer can take away to think about.

Lastly, we think that there should be a compulsory cooling-off period where the customer who has signed a contract has a short period to sober up, speak to his wife and then change his mind when she threatens to divorce him.

These are only a beginning. Come on stores, are you up to the challenge? Give us a call and let’s talk about it!

Reading the small print

We had a call recently from a reader who was in trouble with a certain furniture store regarding a credit scheme. When she visited the store she was offered a 3-month interest free scheme. Now we think that short-period interest-free interest schemes are fantastic. They give us credit but aren’t exploitative and help us all get over those bad cash flow times like Christmas and birthdays.

However it turns out that the paperwork she was given to sign wasn’t anything to do with a 3-month interest-free scheme. Instead it was a full-interest, 12-month scheme. She was told that they didn’t have the necessary paperwork for the 3-month interest-free scheme, just for the 12-month scheme. When she queried this she was told that it didn’t matter, so long as she paid up within 3 months they would waive the interest and other charges.

Now before we go any further, yes, she really should not have signed the 12-month contract. She ended up committed to a contractual arrangement that was nothing like what she wanted. However, we’ve probably all done things like this ourselves so we’re in no position to preach. However, we must, must, MUST remember NEVER to sign anything without reading it. NEVER!

She called us when things had, almost inevitably, gone wrong. We’re doing our best to help her and the store to sort this out and with a little luck everything will turn out OK in the end.

However we were in for a shock when she sent us a copy of the contract she had signed. Now we in the Watchdog team are very strange creatures because we really enjoy reading the small print in contracts and finding loopholes, mistakes and exploitation.

It wasn’t difficult with this contract!

One clause states that “The Goods have been sold to me as seen, inspected and approved by me”. Now how can this be right? You’re expected to sign this in the store, having never actually seen the item you’re buying. All you’ve seen so far is an example in the showroom. The real thing you’ll own won’t be delivered until perhaps several days later! But when that turns up broken, the wrong colour or maybe even the wrong product entirely you’ve already signed to say that it’s exactly right and that you love it.

The next clause states that in the event that you default on your repayments, the store can charge you penalty interest at a rate determined by them. No clues what rate they’ll use, they can, in principle charge whatever they like. Anything.

The last one that we enjoyed says “I have fully understood the terms and conditions of this sale which have been fully explained to me, and I undertake not to contend the contrary”.


You sign the contract having no idea what you’re signing and you then are in breach of the contract if you even suggest that you didn’t understand it or that the store staff didn’t explain it to you. In effect you are bound by the contract to lie in court if you are asked if you understood the contract when you signed it. Amazing!

So what’s our advice?

Don’t sign anything you haven’t read. If you don’t understand it take it to someone who might. Exploit your relatives, friends and neighbours. Almost everyone knows someone who’s good at reading through these things and who will check it for you in return for a drink.

Do NOT allow yourself to be pressurised to sign anything in the store. EVER. No matter how tempting the offer is, take a little while to think it over. Sleep on it. If it’s still a good idea the next day after your cousin the accountant has read it over then go for it.

Remember that contracts are between two equal, voluntary parties. If there’s a term in a contact you don’t like, draw a line through it, write “I do not agree to this clause”, sign it and hand it back to them. See what they do. There’s a chance they’ll throw you out of the store but maybe they’ll get the message! Remind them that it’s YOUR money and YOU choose what to do with it.

This week’s stars!

  • Montle at BTC International Directory Enquiries for being amazing. Montle couldn’t find the number but took the customers phone number, did a web search and found the company she was looking for, and phoned the customer back!
  • Thebiso, the Supervisor at BTC International Directory Enquiries for inspiring his team to give great service!
  • Margaret at Makoga Investments for being a star!
  • Matt at Pick N Pay Molapo Crossing for being willing to listen to a customer and put things right!
  • Gaborone City Council traffic department for putting up warning signs about the road closure at Old Naledi!

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