Friday 10 August 2012

The small print

We all know that there are organisations that want to keep us in the dark. It’s in their interests for us to know as little as possible. The best example I know is the furniture stores that sell on credit. I know this is true because we’ve tested it. In the last few weeks we sent volunteer mystery shoppers to a variety of furniture stores to investigate. Luckily most stores these days abide by the terms of the Control of Goods (Marking of Goods) Regulations 1974. Yes, a set of regulations published 38 years ago included a requirement that when goods are “offered for sale” on credit or any other type of “deferred payment” the store MUST disclose the deposit and the number, frequency and amount of any installments. We’ve all seen them do this. What they used to neglect, and occasionally still do, is the other item they are required to make clear. The “total amount to be paid by way of deposit and instalments.”

The good news is that most stores do this. They might not give the total credit price “in characters of similar size” as the regulations require but it’s a start. At least you’ll have some idea of the total amount you’ll pay. You can see that it’ll often be twice, perhaps even three or four times as much as the cash price. You can then take a sensible decision (to go without and save up instead).

The problem is that many of them commit other sins instead. The worst is keeping their contracts secret. The same mystery shoppers who checked up on the stores’ adherence on credit prices also asked the stores if they could take a copy of the contract away with them to read before they signed it. On several occasions they were told that this wasn’t possible. Some stores said it was against their policy, others said the contract would be explained to the customer WHEN they signed it, one was even told that they’ll get a copy of the contract in the post AFTER they’ve signed it.

This is all grossly abusive. These stores refuse to let the customer see the terms and conditions of the sale they want to make. Frankly they’re crooks if they do this regularly. They deserve to be put out of business. They deserve to have no customers.

The problem is that they DO have secrets to keep. I’ve seen some of these contracts and they are deeply and profoundly sneaky. One said that the customer agreed that the terms of the contract had been clearly explained to “him” and that “he” understood them completely. Remember that this is the contract he wasn’t allowed to see until after the goods had been delivered. Another contract included a clause that stated that customer had inspected the goods and that they were in perfect condition. This was the contract he or she was expected to sign in the store, days or even weeks before the goods were delivered. How could the customer have inspected the goods when they hadn’t even been shipped yet?

That’s the sort of thing the stores don’t want you to know until it’s too late.

Unfortunately it’s not just furniture stores that do this. We’ve heard recently from a couple of people who’ve had severe problems with a particular cellphone network provider. The problems emerge when they go roaming in another country. I think we all know that roaming is an expensive business. It’s always going to be more expensive to make a call from another country. You’re connecting to a foreign network, they want to make money from you as well as your home country network provider. But there are limits.

One reader switched on her GPS-enabled smartphone in South Africa for approximately 5 minutes to get some directions and ended up paying over P300 for that brief connection. Another got home from a day-long business trip to Jo’burg to find that making calls and picking up his email had cost him P3,300. In a single day.

When she queried this with her home network provider they told her that she’d incurred those costs by roaming with the wrong South African network. They had a deal with one provider, but she had connected to the wrong one. She didn’t do this deliberately, it was just the one that offered her a signal. When she asked how this enormous cost had been calculated they couldn’t tell her. Nor could they tell her the rates they charge when one of their customers connects to this alien network. I’ve checked, their web site mentions that it’s technically possible to connect to this other network but gives precisely NO information about the rates they’ll apply if you do so. None whatsoever.

I’m not a lawyer but I have to wonder whether this is actually enforceable? How can they charge a rate for a service that they have NEVER disclosed to the customer and that is, in this particular case, nearly 20 times more expensive than the normal roaming rate? Don’t they have an obligation to tell the customer about this before charging it? Please, esteemed members of the legal community, tell me?

Meanwhile I can only advise you to ask any company you deal with for details of charges you don’t know about. Before you go roaming ask you network provider what they’ll charge you when you’re abroad. Ask them what will happen if you connect to a network provider that isn’t their preferred one. Demand numbers from them. The same with any company that offers good on credit. Demand a copy of the contract to read at your leisure BEFORE you sign it. If you have any doubts about it, ask a friend, a colleague or us. It might save you a fortune.

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