Credit companies owe consumers a duty of care

The Supreme Court ruled this week that credit companies owe consumers a duty of care when blacklisting them.

Richard Durkin of Scotland bought a computer from PC World in 1998. The computer cost £1,499. He paid £50 and then entered into a credit agreement with HFC Bank. When he discovered that the computer did not have an inbuilt modem he returned it to PC World. Eventually, PC World repaid his £50 however the HFC Bank told him he needed to continue making the payments on the credit agreement. When he did not, HFC Bank blacklisted his credit.

In 2008 the Aberdeen Sheriff Court ruled that Mr Durkin was entitled to reject the computer and end the credit agreement. Mr Durkin was awarded damages of £116,000. That sum was dramatically reduced on appeal to the Court of Session in Edinburgh. The decision was appealled to the Supreme Court.

This case establishes that if you buy goods using a credit agreement, and if you validly reject the goods and terminate the contract of sale you may also validly end the credit agreement. It is also establishes that credit companies owe consumers a duty of care. So that if a credit company wants to blacklist a consumer’s credit rating, if the consumer is asserting that they have validly ended the credit agreement, the credit company has a duty to make sure that they are genuinely in default of the credit agreement.

Hastings & Co solicitors specialise in civil litigation. For advice or assistance telephone 01245 835 305.

Disclaimer: this blog is only intended to give a brief overview of the law and is not intended as a substitute for independent legal advice.

 

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