Credit

Credit cards

Goods and services purchased using a credit card and totalling in excess of £100, results in you having an equal claim against the finance company even if only the deposit has been paid using credit as provided by section 75 of the Consumer Credit Act 1974 - (equal liability). Similarly if the goods or services as purchased above are found to be defective, this means you may have an equal claim for compensation against both retailer and finance company.  Section 75 does not apply to charge cards such as American Express as these are debit cards.

Items purchased at home or abroad using a credit card and totalling over £100 allow for you to have an equal claim against the finance company for the total value of the contract in the event the goods are faulty and the trader has since ceased trading.

Interest free credit

Interest free credit is a method of purchasing on credit, but allowing for a delay period in repayments and is financed by a separate finance company.  It is the responsibility of the consumer to ensure payments are cleared within the agreed time period or interest will be added to the total sum from the date of entering into the agreement.

Hire purchase

Hire purchase is more commonly used to purchase vehicles, and involves the purchase being sold to a finance company who then hire the vehicle to you.  The purchase remains the property of the finance company and cannot be sold without permission until the last payment is made.

Pawnbroking

Pawnbrokers will loan monies in exchange for an item of security (the pawn). A pawn receipt is issued from the broker and is required to redeem the pawn. Redemption is normally within six months after which time the broker can sell or keep the item.  Interest charges tend to be above normal bank/building society rates.

Credit and Debt

Spreading the cost of purchasing goods and services involves entering into a credit agreement.  Credit agreements contain "small print" that explain your rights and obligations and should always be read before signing.  Beware of loan sharks or unlicensed traders as they often charge exorbitant interest rates and are trading illegally

If you sign a credit agreement at a traders premises you cannot cancel, if you take away the documents to sign you have a short time to cancel without financial penalty.

If you do not keep up payments, you may be sued for the outstanding balance or if under hire purchase, have the item repossessed and be liable for expenses and/or repairs carried out by the finance company

Debt

If you fall into debt never ignore the problem as it will not go away.  Agencies such as your local Citizens Advice Bureau, will provide guidance and help on how you should approach your creditors.

For further information on basic debt advice contact Citizens advice bureau (external)

For further information regarding money lending and obtaining credit visit Trading Standards Central or visit Consumer Direct.

Contact

Consumer Protection Services
Environment and Regeneration
Waltham Forest Council
Sycamore House
Forest Road
Walthamstow  E17 4JF

email wfdirect@walthamforest.gov.uk
tel 020 8496 3000