Friday, 18 September 2015

Back to basics

Many of the problems reported to us as Consumer Watchdog are complicated, particularly the ones relating to financial services. Others are much, much simpler.

Tale this one that was posted on our Facebook group.
“Can you return furniture if you bought it cash and chose a different product within or less than 6 months after buying and reason for returning maybe that the qualities of that particular product are less than what you expected?”
So let’s imagine how this might work. Let’s say that you run a furniture store and one day I arrive and buy a sofa from you. It’s brand new, and in perfect condition. At no point are you dishonest with me about its condition. In short it’s a perfect sale and there can be no complaints.

But six months later I come back into your store and tell you that the sofa is now a bit out of date and no longer as impressive as I thought when I bought it. In fact the store next door has a much better sofa that I want instead. May I return the sofa I bought from you, which is now second-hand and can no longer be sold as new, and get a complete refund?

I’m sure most of us would forgive you for showing me the way out of your store. They might even overlook you and your staff laughing at me as I left.

Another question went like this.
“Hi I need ur help I took my fridge to [a pawn shop] last month due to some problems I had then this month I went there to pick it back home but my worry is it came back with many scratches when I complained they told me dat they can't take responsibility because they are not sure if it came like dat or not so help here s there any action I can take against them.”
The problem here is proof. How can this customer prove that the damage to the fridge was actually caused while the pawn shop had it in their possession? How can she prove that the damage wasn’t already there when she took it to the pawn shop?

It’s just her word against theirs and that’s not a very good way to prove something. The only thing this situation has to offer is an endless argument with neither side being able to agree to a solution.

This could have been prevented quite simply. Firstly when you hand something over to a pawn shop (or indeed anyone else) get everyone to sign a document describing the condition of the goods, including any scratches and dents, just like you do when you hire a car.

The other, even simpler thing, would have been to take some pictures. Almost everyone these days has a cellphone containing a camera and taking a few photos of the fridge before handing it over would have given her some evidence to back up her claim.

A question we get quite often relates to banks and the authority they have to move money between your accounts. A reader asked us this.
“Hi. I have a question. Does a bank have the right to move funds from your one account (e.g savings) to your other account (cheque, loan) if e.g the account where the funds are being moved to is overdrawn? Surely they should call you if anything and discuss repayment options?”
The answer is actually perfectly simple. Yes, the bank IS entitled to move money from one of your accounts to another if that second one is overdrawn. The reasons are simple. The bank can do this because you said they could. In the original banking agreement you signed with the bank all those years ago there was a clause that said the bank could pay your debts to them with spare money in other accounts. You gave them explicit, written permission to do this. Of course banks should only do this when there’s a problem, if you’re not repaying your loan for instance. The question “Surely they should call you if anything and discuss repayment options?” is a good one, but I bet the bank had already reminded the customer repeatedly that they were behind with a loan or had an outstanding overdraft facility somewhere.

The lesson is to read things before you sign them. More importantly you need to understand every simple part of an agreement before you even pick up the pen. And if you don’t understand something in the agreement they are asking you to sign? Ask. Then ask again. Then keep on asking until you are absolutely convinced that you understand it. And if you still don’t understand it? Walk away. Do not sign it, no matter how much pressure the store, insurance company or bank might try and apply.

But what if you really, really want whatever it is they’re selling you? Then ask someone independent. Take a copy of the agreement away from the store and show it to your cousin the accountant, your kid’s English teacher, your next door neighbor who works for a bank and ask them what they think of it. You can even bring it to us. We’ll be happy to take a look and tell you what we think. For free.

But what about those occasions (and we know they happen) when the store refuses to let you take the contract away with you? Firstly tell them (and you must really mean this) that you refuse to buy the item and that you will never buy anything from them again if they are that secretive. Ask then what they’re trying to hide. Then walk away and I beg you, do what you threatened to do. Never set foot in the store again. It really is a remarkably simple situation. If they won’t trust you with their contract, you cant trust them with your money.

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