Protection of the Consumer Rights and Regulation of the Credit Relations - Term Paper Example

The present paper is devoted to the discussion of the situations, connected with the protection of the consumer rights and regulation of the credit relations. The aim of the work is to advise the possible remedies and liabilities with rights in relation to creditor-debtor relations, with the explanation of the seller's obligations connected with the providing the misleading information about the product. The work will be based on the Consumer Credit Act 2006, Unfair Contract Terms Act and Trade Descriptions Act 1968. Consumer protection There are the two basic documents for consumer protection within the UK, which provide the buyer with the right to receive the goods he buys in good condition, without any misleading trade descriptions. These are the Trade Descriptions Act 1968 and Unfair Contract Terms Act. To make the situation clear, here is its short description. Duck visited the showroom of Swan and looked at a television set priced at 500. He asked Swan about the set. Swan replied: "It's a beautiful model, never used, a snip at 500." In fact some of the internal wiring was not properly connected and the set had been switched on and used as a display unit in Swan's showroom for three days prior to Duck's visit. In this situation, and according to the Trade Descriptions Act, Swan is subject to the criminal offence as the one who has provided his consumer with misleading information. According to the Act, the description to the consumer may be given verbally or in the written form, thus there is no possibility for Swan to be justified on the basis of the information having been given in the oral form. The Act makes the verbal statement, including misleading information, an offence and thus it is a criminal action. In case Swan intends to state that his verbal statement has been done unintentionally, the law presupposes that this offence is the strict liability offence, and even in case it is done unintentionally, it still remains an offence and is subject to penalties according to the law. In this way the law protects the consumers and makes the traders think over every word in trying to sell their goods to the consumer. However, there is also a question about what descriptions are to be supposed as trade under the act and is there any possibility for Swan to avoid penalty in this relation. The Act includes the following types of descriptions into the trade descriptions category: quantity, gauge or size of the goods; manufacture method; composition; performance, strength and fitness for purpose, which means that the goods should be mechanically sound and unbreakable, etc. In the situation described, it is clear that the misleading information provided by Swan, is included into the paragraph relating to the performance, strength of the TV set, and the fact that it must be mechanically sound. Thus, knowing the problem of the TV set and the wrong connections inside it, Swan has intentionally committed an offence and is subject to the penalties according to the Trade Descriptions Act 1968. As far as it is known that the statement made is false, it is also supposed to be a criminal offence under the Act, and as Swan is not a simple employee but is supposed to be a manager, he can be sued and subjected to these penalties, however the Act presupposes that any person guilty of intentional or unintentional mislead bears responsibility under the law. The maximum penalty is equal to 5,000 per offence. This penalty is provided by the Magistrates' Court; as for the crown Court, the fine size is unlimited, while the person guilty of misleading the customer may acquire up to two years of imprisonment. It is possible that Swan may lose his consumer credit license, but according to the situation described it is supposed that he does not have this license, having an agreement with Chicken-Credit Ltd, which provides Swan's customers with hire-purchase credits in case they cannot afford buying the goods in cash. Thus, the action, performed by Swan in relation to Duck, is supposed to be criminal offence under the Trade Descriptions Act 1968 and can be subjected to financial penalties or even imprisonment. On the other hand, the Act gives the trader possibility to avoid penalties, making the statement that the misleading has been done due to some mistake or on the basis of the information provided by the supplier, etc. Despite the fact, that the Act provides the trader with certain precautions, the Swan's action is definitely purposeful and there is no way for him to be justified in case he is sued by Duck. This case also comes under the Unfair Contract Terms Act, which protects consumer rights and gives the consumer an opportunity to breach the contract in case he discovers the terms and conditions of the contract, either oral or written, misleading and contradictory. Under this Act the customer has the right to demand the trader for the goods to correspond with the descriptions he gives, and that the goods fits their purpose, that is, is able to perform the functions it is meant to. It is meant, that if the liability of the supplier is not limited by the reasonable exclusion clauses, and the goods which are bought by the consumer, don't fit to their purpose and display dysfunctions, the consumer has the right to return the goods to the supplier within the reasonable period of time, suing his in addition for giving misleading product information. As Duck has acquired credit and has made the agreement not with the seller, but with the third party, represented by Chicken Credit Ltd. Thus, in resolving the dispute as for the credit acquired for the purchase of the TC set in Swan's shop, the Chicken Credit Ltd and Duck are to follow the Consumer Credit Act 2006, which is similar to the Consumer Credit Act of 1974, but is amended and added with new statements. The Consumer Credit Act is designed to regulate the consumer credit and hire relations, unfair relationships and the provision of information to debtors after the credit or hire agreement is made. However, there are several moments, which are to be explained to Duck in relation to the present situation, as there are certain statements in the Act, which have been breached by the Chicken Credit Ltd and thus provide an opportunity to Duck to avoid penalties and keep the TV set. First of all, according to the Consumer Credit Act, the notice which has been sent to Duck by Chicken Credit Ltd had to be sent in 14 days after the point when the two payments in a row have not been performed (section 86B of the 2006 Act). This statement has been breached by Chicken Credit Ltd twice in the following moments: 1. The notice (usually called the Default Notice) was sent earlier, than in 14 days after the two payments in a row were not fulfilled (moreover, there are no unperformed payments, as only one payment has been delayed and still performed later) 2. The default notice is usually send 14 days before the credit company's representative comes to take the goods back, while in this case the representative came in only two days, thus giving Duck no time for seeking legal advice and any form of agreement with the credit company itself. Taking into account these facts, Duck has the full right to keep the goods and sue the credit company. On the other hand, there is another fact, which gives Duck an opportunity to protect his rights. According to the Act, the Default Notice should be written in a strictly required form, without any amendments - in case the Default Notice is written in the wrong form, it is not supposed to be valid. The 14 days term is given to the consumer to consult a professional lawyer on this subject, which has not been followed by Chicken Credit Ltd in their wish to take the goods back. The Default Notice should include the following elements: the sum to be paid to bring the payments according to the schedule; the terms to make the payments; the consequences in case payments are not made; the terms which allow to bring the credit agreement to the end; the statement that in case the payment is made the agreement won't be breached. The present situation appears to be absolutely different and in fact there is no need and basis for sending such notice to Duck as he has in reality performed the payment, which has been rejected without any evident reason. Thus, the fact that the Chicken Credit representative has come to Duck's houseboat in only two days after the notice have been received, and moreover, Duck himself has not seen this notice, which can be used in the court as one more proof of illegal credit company's actions. All the arguments described in the work can and should be used by Duck in his conversation with the Chicken Credit Ltd representative. Of course, all arguments and disputes are preferred to be resolved through mutual peaceful agreement, though having these facts and acts in store, Duck has the full right to go to the court and to win the case. The present work displays the necessity for the consumer (in our case, Duck) to know the laws and acts, under which he has his rights, liabilities and remedies as for the resolving the dispute between him and Chicken Credit Ltd. The situation is rather argumentative in case Duck does not know the laws, and from the legal point of view, there is nothing contradictory. On the one hand, Duck is wrong in his being delayed with the payment; on the other hand, he has still performed it, with Chicken Credit Ltd rejecting the cheque without any legal basis for this action. Conclusion Credit relations between creditors and debtors are regulated by a number of laws and acts. The lack of knowledge in this legal area can cause major problems in resolving the disputes connected with the consumer protection. In Duck's case, the lack of this knowledge could cause the lose of the TV set, which he possesses on the basis of the agreement with Chicken Credit Ltd. The reasons of such credit company's behavior are unknown, though the central issue here is that Chicken Credit Ltd actions are not legal under the law and may be denied through the court, if the company does not agree to make up peaceful agreement and accept the Duck's payment. As the company has not notified him of the delay in payment immediately after the payment has not been performed, it now has no right to reject it or to sue the consumer for his refusal or inability to pay for the goods he has bought in credit. It is obvious, that the UK laws in the field of consumer protection are regularly amended with the account of current trends, giving both the trader and the consumer opportunities to protect their rights and provide the customers with due service and correct information as for the goods they buy. References Consumer Credit Act 2006. Retrieved on 2006, September 13 at www.opsi.gov.uk/acts/acts2006/ukpga_20060014_en.pdf Read More