Goods and services bought with credit

When a customer buys goods or services from a supplier, things can sometimes go wrong. This could include: 

• the customer not getting what they were expecting
• the item being faulty
• the item never arriving
• they service they bought not being up to the right standard

If the customer paid using a credit facility you provided then in some situations, you might be liable for problems with goods and services. If so, you might have to provide the customer with a repair, replacement or refund. 

Types of complaint we see

The range of goods and services you can pay for using credit is broad. 

Consumers generally come to us when they're unhappy with how a business has handled their situation when they've told you about a problem with goods or services. Consumers have told us: 

• I'm not happy with what I was told about the goods or services before I agreed to buy them
• The goods I bought aren't good enough quality, aren't fit for a particular purpose or they never turned up
• The service I bought was not carried out with reasonable care and skill
• I'm unhappy with how the supplier tried to put things right

What we look at

The Consumer Credit Act

We'll consider your responsibilities under relevant law such as the Consumer Credit Act 1974 and the Consumer Rights Act 2015. 

If you supply goods to customers under a rent-to-own arrangement such as hire-purchase, you're likely to be responsible for (subject to the agreement's type): 

• issues arising from the supply of those goods 
• things said about the goods before the sale by a third party, such as a dealer or broker, that turns out to be incorrect

If you provide the customer with credit card or point of sale loan that they use to buy goods or services from a third party, then the transaction could be covered by Section 75 of the Act. Section 75 allows the customer to raise a claim against you for actions by the third party supplier. This could be relevant if: 

• the cash price of the goods or services is more than £100 but no more than £30,000
• the customer thinks the supplier misrepresented its goods or services, or that it breached its contract with them

It's worth noting that: 

• the customer does not have to pay the full cash price of the goods on credit to have a valid Section 75 claim
• in certain circumstances where the cash price is over £30,000 a credit provider might still be responsible for what has happened - under Section 75A
• independent of a claim under Section 75, a card provider or bank may be able to help in a dispute about goods or services through a chargeback process

Key evidence

We'll look at: 

• the type of credit used
• the cost of the goods or service
• who was involved in the transaction

If we can help, we'll weigh up the available evidence, including: 

• looking at what's been said by all the parties about the goods or services in question and examining the contract with the supplier
• taking into account evidence such as paperwork, photos, videos, correspondence and (if needed) reports or expert opinion
• what relevant law (such as the Consumer Rights Act 2015) and industry guidance says about the supply of goods or services

The Consumer Rights Act 2015

The Consumer Rights Act is relevant to complaints about the quality of goods or services (including digital content) supplied by a business to a consumer. It implies certain contractual rights into consumer contracts - even if the supplier's paperwork doesn't include (or specifically tries to exclude) them.

It came into effect on 1 October 2015, bringing together key consumer rights from various pieces of legislation including: 

• the Sale of Goods Act 1972
• the Unfair Contract Terms Act 1977 
• the Supply of Goods and Services Act 1982

It clarifies the responsibilities placed on a supplier and provides a clearer explanation of the rights a consumer is entitled to. 

The Act isn't retrospective, so if the consumer entered into a contract before 1 October 2015, previous legislation would apply. 

Key points of the Consumer Rights Act are: 

• goods must be of satisfactory quality, fit for their intended purpose and as described
• services should be carried out with reasonable care and skill, and if not specifically agreed, in a reasonable time frame and at a reasonable cost

The Act also sets out the consumer's rights in the event of a breach of contract including: 

• the consumer's right to a repair, replacement, rejection or partial refund for problems with goods
• the consumer's right to have services attempted again or receive a partial refund for those that have already taken place

Other legislation

Not all contracts for goods and services are covered by the Consumer Rights Act, such as business-to-business contracts. Other legislation that might be relevant include: 

• the Sale of Goods Act 1979
• the Supply of Goods and Services Act 1982
• the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013

Putting things right

Depending on what's gone wrong (and what you've done to try and put things right) we may ask you to: 

• give the customer a refund, either in part or in full
• repair or replace the goods
• arrange for the services to be carried out properly
• refund interest, charges or repayments
• collect the goods at no cost to the customer
• In any of these situation, we may also suggest you pay compensation for any distress or inconvenience that might have been caused. If the customer has incurred any costs relating to the problems with goods or services, we'll consider whether it's reasonable for you to reimburse these costs.