Litigation Update: Returned goods do not cancel finance agreements

Posted on 2010-06-18 in General

Consumers should beware of the recent inner house appeal judgement in the case of Richard Durkin v DSG Retail Ltd & HFC Bank PLC.

In this case Mr Durkin wished to purchase a laptop with an inbuilt modem, the shop assistant was unable to confirm if the computer had this feature as it was in a sealed package. Mr Durkin paid a deposit and took out a credit agreement. When Mr Durkin discovered the laptop was missing the modem, he returned it to the shop the next day and sought a refund of his deposit.

Mr Durkin was then pursued by the finance comany for payments under the credit agreement despite the goods being returned. The finance company served a default notice which resulted in Mr Durkin's name being placed with the credit agencies and he found himself unable to obtain manageable credit. He raised a court action and sought damages for injury to his credit rating and for being unable to buy a spanish property. He won his sheriff court action and the case was appealed to the Inner House.

The Inner House ruled that s.75(1) of the Consumer Credit Act 1974 allowed him to cancel his contract with the company he bought the goods from but this did not allow him to automatically cancel his credit agreement.

The old adage "Caveat Emptor" seems apt.

To see the judgement in full click here.

For advice regarding this or any other civil litigation matter, please contact Mark Ralston or Marisa Cullen.