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Using The Consumer Credit Act To Protect Your Car Purchase


Have you ever bought a new or used car and found the dealers aftersales service… well, less than satisfactory? Or, indeed, bought anything worth more than 100 and been unhappy with its quality or longevity? Well, we might just have the answer.

Cars, like most consumer goods, are covered by the Sale of Goods Act. This means that anything you buy from a dealer (rather than privately) must be:

This is all pretty straightforward: if you tell them you need an economical car for commuting and the salesman dupes you into buying a gas-guzzling V8 monster, you have a claim. Similarly, if you are told that the car you buy has a full service history and it doesnt, you can ask for your money back.

In this case though, the devil is sometimes in the implementation rather than the details. Raising a complaint with the person that sold you the car is the easy part, but what can you do if you arent satisfied with the answer you are given or are, as is often the case, ignored completely?

I was in this position recently. Essentially I was sold a quad bike that wasnt fit for purpose – I needed something that could be used on the road, and the quad I was sold wasnt (and couldnt be) road registered.

I raised my concerns with the company that sold me the quad bike, but was ignored. The sales manager I’d dealt with wouldnt answer my emails, letters, or phone calls. My frustration grew until I had my light bulb moment: Section 75 of the Consumer Credit Act. This little-known act gives protection to anyone who buys consumer goods using their credit card.

Essentially, it makes the creditor (in this case, the credit card company) just as liable as the supplier, if there happens to be a problem.

This in mind, I raised the matter with the bank that issued my credit card. I outlined the problem and asked for a refund under Section 75. The bank stalled for a while before refusing my claim, saying that I must take it up with the supplier.

The bank was, and knew it was, completely wrong; there is no obligation on the consumer to even raise it with the supplier, much less treat the supplier as the only resort. Of course, common decency means that the supplier should be given a chance to rectify the problem first but there is no obligation to do so.

Dealing with large organizations – like big financial institutions – is often frustrating. They are used to dealing with customers who know little, if anything, about their rights – and even less about the obligations the company has, both legal and otherwise. Faced with stubborn people trying to cloud your judgement, many complainants give up entirely. Which is why they do it.

I didnt give up. I raised a complaint with the Financial Ombudsman Service, an independent body that investigates consumer complaints and gives an impartial, third party view as to their merits and most financial organizations will abide by the FOSs findings.

The FOS investigated my complaint and found in my favour, something it does in about half of all the cases it investigates. It told me that the bank had agreed to collect the quad bike, refund the purchase price plus interest, and make a goodwill payment in recognition of the way it had mishandled my complaint. And it would do so within 28-days of the date of the letter.

The bank did indeed pay my initial claim, but only 27-days later – a delay that you, like me, might view as petty minded game-playing. But I did get my money back, something that wouldnt have happened if Id paid by cash, cheque, bank transfer, in-house finance, or debit card.

So next time you buy something that costs between 100 and 30,000, make sure you pay for it using your credit card, even if you clear the whole amount off at the end of the month. Interestingly, you dont even need to pay the full amount to be covered because a deposit is enough. So paying a small deposit on your credit card for your new or secondhand car (as long as it doesnt cost anymore than 30,000 of course) covers you for the full purchase price.

Thats all you need to do to protect yourself from faulty goods and shoddy salesmen plus have a lot of patience and more-than-normal levels of stubbornness, obviously…

(Main image: Money by Flickr user Images Money)

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