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| Some Help For Someone; CAB advice for cancelling credit agreeme | |
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| Topic Started: Jul 14 2006, 05:42 PM (292 Views) | |
| eddcole | Jul 14 2006, 05:42 PM Post #1 |
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Cancelling a credit agreement Cancelling before payments are made Regulated credit agreements (see under heading Regulated credit agreements) may allow you to cancel the agreement if you want to change your mind. You have a ‘cooling off period’ in which you can change your mind. You can cancel the agreement if:- you signed it anywhere other than on the premises of the trader or creditor; and you discussed the credit face-to-face with the trader or creditor before you signed the agreement. If you are entitled to cancel the agreement, you must be sent a cancellation notice within seven days of signing the agreement explaining that you have the right to cancel the agreement. A cancellation form will be enclosed with the notice and you can use this (or write a letter) to cancel the agreement. If you do want to cancel, the cancellation must be sent to the lender within five days of receiving the notice, preferably by recorded delivery. If the goods are bought from a mail order catalogue agent, the agreement may say that it can be cancelled within 14 days of the agreement being signed and no cancellation notice will be sent. If you cancel an agreement during the cooling off period, you must:- take reasonable care of the goods. This duty lasts for 21 days after cancellation hand the goods back to the supplier if they ask you in writing, either in advance or when they come to collect them. If you do not hand the goods over when requested in writing, and the request was made within 21 days of cancellation, you must take care of the goods until you hand deliver them or post them back at your own expense return any money advanced under the agreement pay for goods installed, for example, a conservatory, or a fitted kitchen or if they were supplied before the cancellation form was sent to meet an emergency. The supplier:- if they want to collect the goods, must request this within 21 days of cancellation must return any goods given in part exchange (or give a cash equivalent) within ten days of serving the notice of cancellation must return any payments you have made, for example, deposits and instalments cannot ask for payment for perishable goods or goods ‘consumed by use’, for example, fuel or spare parts. If you have made a pre-payment for goods or services which you are buying on credit (as a deposit or part-payment), you should get all of your money back when you cancel unless you arranged your own credit. Cancelling while payments are still being made If you have bought goods under a hire purchase or a conditional sale agreement (see under heading Types of credit) and have already made some payments, you can end the agreement by returning the goods. However, you may still have to pay any arrears and an amount of money which, when added to the amount of money paid already, comes to half the total price of the goods, if the agreement is regulated under the Consumer Credit Act (see under heading Regulated credit agreements). In England and Wales, for more information about cancelling a credit agreement, see Credit fact sheet in Credit and debt fact sheets. Buying goods at home or at work If you have bought goods or services costing more than £35, from someone who called at your home or work, you may have a seven day cooling off period. This is the case even if you did not pay for them on credit. (If you are outside the cooling off period, the right to cancel will depend on the agreement with the trader). You may also have a seven day cooling off period when you buy goods or services through what is known as a distance sale. A distance sale is a sale by telephone, mail order or the internet. Again you do not have to pay by credit to have this seven day cooling off period. In England and Wales, for more information about your rights when you buy goods at home, see Home shopping and Buying over the internet in Consumer fact sheets. Credit agreements which cannot be cancelled The following credit agreements cannot be cancelled:- bank overdrafts loans secured on land, for example, mortgages small loans of £50 or less unless they are hire purchase or conditional sales (see under heading Types of credit) small loans of £35 or less where the agreement was made away from trade premises in the presence of the trader (see above). loans to pay death duties. Back to top Arrears If you fall into arrears, how this is dealt with will depend on the type of agreement. Hire purchase and conditional sale agreements If the goods were bought on hire purchase or conditional sale (see under heading Types of credit), the credit company can repossess the goods as they remain its property until all the payments have been made. In England and Wales if you have paid over one third of the purchase price, the company will have to get a court order before it can take the goods back. In Scotland, a court order may be required at any time, though the law is unclear. Other types of credit If you bought goods with other types of credit, they belong to you, and the credit company cannot repossess them. If the company agrees, you can return the goods voluntarily. However, if you fall into debt, you may be taken to court to force you to pay the money you owe. Extra interest may also have to be paid on arrears. If you have problems with repayments you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.In England and Wales, for more information about your rights when a credit company wants to cancel your agreement, see Credit fact sheet in Credit and debt fact sheets. Back to top Varying the agreement A lender may try to vary the agreement. The change must not be unreasonable. It can only be done if there is a term in the agreement allowing for variation, for example, because of a change in the interest rate, or if both sides to the agreement do not object. If the lender wants to vary the agreement they must give you, the borrower, seven days’ notice before doing so. However, if the right to vary is part of the original agreement, the lender may simply announce the changes in the national press. Back to top Paying the loan off early You can repay the total outstanding amount of a loan by giving written notice that you want to end the agreement. If you have a regulated agreement (see under heading Regulated credit agreements) you will normally be entitled to a rebate of interest and other charges. The formula for calculating the amount of rebate is complicated and if you are considering doing this, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB. Back to top Extortionate credit If you have entered into a credit agreement at interest rates far above the usual hire purchase or bank loan rates, you may be able to go to the county court (sheriff court in Scotland) to change the agreement. The agreement need not be a regulated one for the rules about extortionate credit to apply. If you want to do this you should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB. Back to top Faulty goods and services on credit You have the same rights when buying goods or services on credit as you have when paying cash. Goods must match their description, be fit for their purpose and of satisfactory quality. Services must be performed with reasonable care and skill, within a reasonable time and at reasonable cost. For more information about your rights when you buy goods, see Buying goods – your rights. For more information about your rights when you buy services, see Buying services – your rights. If you have a complaint about goods or services you should first go to the supplier. However, if the supplier refuses to help, has gone out of business, or has disappeared, the credit company may be legally responsible, depending on the credit agreement. If the goods were bought under a hire purchase, conditional sale or credit sale agreement, the company that gave the credit (either a shop or a finance company) is responsible for any faults. If the goods or services were bought by credit card, credit card cheque, trading check or with credit arranged by the supplier and the value was below £100, the supplier is responsible. If the goods or services are valued between £100 and £30,000 both creditor and supplier are responsible (except in the case of a credit card cheque where only the supplier is responsible) if:- the credit was arranged by the shop or business when the goods or services were bought; and the credit agreement is regulated by the Consumer Credit Act 1974 (see under heading Being refused credit). If the purchase was made using someone else’s credit card you cannot claim against the credit card company, even if the card holder said you could use the card. If you are an additional card holder, but are not the person who signed the agreement to have the credit card, you may also not be able to claim against the credit card company. If you want to make a claim, you should make a joint claim with the person who signed the agreement for the credit card. The credit company should be kept informed if you are having difficulties with the supplier over faulty goods or services. If you have arranged your own credit, for example, through a bank loan, you must take up any complaint with the supplier. You must not stop making payments as the creditor has no responsibility for faulty goods or services. If you are having problems over faulty goods or services bought on credit you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB. Back to top |
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5:51 PM Nov 8
