Hire purchase: nothing happens Consumer Concerns
By Eileen Cox
Stabroek News
March 17, 2002

Related Links: Articles on stuff
Letters Menu Archival Menu

Hire purchase is again on the front burner. In April 1992 a proposal for a Hire Purchase Act was presented to the Deputy Prime Minister for approval. The proposal addressed eight issues:

1. the requirements relating to the contents of the hire-purchase agreement.

2. the right of the hirer to terminate the agreement at any time before the final payment under the Agreement falls due;

3. avoidance of certain provisions in hire-purchase agreement

4. the conditions and warranties to be implied in hire-purchase agreements;

5. the duty of owners to supply documents and information;

6. the requirements relating to contracts or gurantees;

7. installation charges and insurance of goods;

8. recovery of possession of goods.

The Bill contained 28 clauses. Meetings were held with three stores that offered hire purchase terms and with interested parties. Nothing further happened.

On September 27, 1996, the Senior Minister of Trade, Tourism and Industry, speaking at a National Open Forum on Consumer Concerns organised by the Consumers Advisory Bureau said:

"Cde, Pollydore earlier indicated an interest in wanting to know what has happened to the draft Hire Purchase legislation. I wish to indicate that that legislation is presently with the law officers who are putting on the final touches."

Writing in the Sunday Stabroek on October 27, 1996 under the caption "Needed: Hire Purchase legislation," Ronald Waddell remarked -

"Hire purchase sales have mushroomed over the past three years with the advent of Courts Department Stores and moves by competitors to get on in the booming consumer durables market."

On February 25, 1998, The Ministry of Trade, Tourism and Industry held a Consultation on the Consumer Protection Bill (1998) at the City Hall, Georgetown.

In his report on the Constitution, Joseph Cumberbatch, writing for the Permanent Secretary of the Ministry said that the stakeholders felt that the Bill did not adequately deal with the hire purchase issue.

For many reasons the draft Bill was rejected by those who attended the consultation.

In June of the same year Consumers International, at a Consumer Conference in Jamaica, presented a model for a Consumer Protection Bill. In some quarters it is felt that with such a Bill no separate Hire Purchase legislation is needed. At the same time two distinguished legal practitioners have stated that hire purchase legislation is no longer in vogue. They have not said what takes its place. Maybe a Credit Act.

A few years ago, a Legal Research Assistant was contracted by the Ministry of Trade, Tourism and Industry to draft a Consumer Protection Bill. The Bill has not yet reached the discussion table. Nothing happens.

In the meantime many consumers are willingly paying three times the cash price for goods taken on a hire-purchase agreement. It is not that they are not aware of the astronomical interest rate charged by the supplier and the additional costs when they run into difficulties and the seizeman visits their homes. One wise consumer recently, on reaching her homne, carefully read the document given to her when she purchased a stove on terms. She compared the vast difference between the cash price and the price paid under the hire purchase agreement. Straightaway she resolved to return the stove to the supplier.

The big grouse is that suppliers can seize goods supplied even when a major portion of the price has been paid. To avoid this I am told that some changes can be made even now in the terms of the Agreement between the supplier and the buyer.

Joseph Pollydore, at the same conference noted above remarked:

"I know for a fact, of course, that notwithstanding what the Government will put in legislation, people are attracted by commodities they want to acquire. In many cases they do not need some of these items but the pattern is "others have. I must have also." That is the kind of education they have."

Re-education is not enough. Consumers need not only to learn the virtue of saving but must have the means to borrow at low rates of interest. The credit union is the answer and those who have the ability to organise and run credit unions would be serving fellow consumers, the economy and the country by using their knowledge and expertise in organising credit unions for the benefits of middle and low income consumers.