Saturday 24 April 2021

The Voice - Consumer's Voice

Do I really owe them?

Hello Mr Richard. I am inboxing this regarding to the issue I have with a furniture store in Masunga. I took a bed from them on instalment when I was still a Special Constable and unfortunately I was admitted at one of the tertiaries where allowance was P150 so I asked them to take the bed since paying it off would be a difficult thing. Yes they did not give me any headache. They took the bed. I only learnt after 10 years I still have my name in their system and I'm still owing a lot of money. Do I clear the debt and get nothing or I clear they give the bed back. Help I am clueless!

Yet again a story that shows how horrible hire purchase can be and how badly people understand how it works. I don't blame consumers for this entirely, I blame the stores that sell things on hire purchase for not explaining it to their victims. Sorry, I mean to say 'customers'.

The first and most important thing to understand about hire purchase is the name. It's called 'hire' purchase because you are hiring the goods, not buying them. You only get to own the items you're hiring when you've paid the final instalment. Only then is that bed your property. Up to that day, the bed still belonged to the store and they're entitled to come and repossess their property if you ever fall behind with your instalments.

The second thing to understand is that even if the bed is repossessed and whether that was their idea or yours, you still owe them money. You agreed to hire the bed over a two-year period and you owe them the full two years of money minus any instalments you've already paid and any money they might get when they auction your bed. Remember that the bed is now second-hand and used and not worth the original purchase price and when they sell it they'll probably only get a small fraction of the outstanding value of the bed. When you add on the various penalties, debt collection charges and interest, you can easily end up owing more than the amount you owed when you still had the bed.

The final lesson today is that debt doesn't go away if you ignore it. The store or their debt collectors really should have kept you updated on the debt you owed and I suspect you'll be shocked when you see the total bill now. However, the sooner you speak to them the better. The debt isn't going to get any smaller the longer you wait.

Where's my insurance?

I have a problem here concerning hire purchase. I bought a TV set and a microwave and defaulted a few months and the TV accidentally broke the screen and I was required to do a police report and bring a police affidavit for processing of insurance claim. I was called and told to clear off the arrears from my defaults before I could be assisted and I complied but now it's becoming a problem for them to assist me though I cleared arrears and on a good standing. Please advise and assist accordingly.

Another, similar story illustrating how hire purchase can go wrong. Another lesson about hire purchase is that while you'll often be offered insurance against the goods being stolen or damaged you really need to read the small print in the agreement you sign. You must check to see what exactly the policy covers and when. For instance, it's normal for the policy not to cover you if you're behind with your instalments, like in your case.

I contacted the Country Manager for the store and he confirmed that if your account is up to date they can process your claim but also mentioned that this needs to be done within 60 days of the damage occurring. If it's after that period then they might only consider the claim, there's no guarantee.

Update: I heard from the customer that the store lost his original police complaint and they need a new one. I hope this means they accept some responsibility for the delay and encourage their insurance people to do the right thing?

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