MOST consumers do not understand the hire purchase agreements they sign, the Consumer Council of Fiji said.
The council will today release two reports "Hire Purchase Industry in Fiji" and "Review of Consumer Credit Act 1999: from Consumers Perspective, which has confirmed this statement.
"This is the first in-depth investigation into the impact of hire purchase on consumers and two reports on some eye brow raising and interesting revelations into the Hire Purchase Industry," council chief executive, Premila Kumar said.
"They look into the plight of consumers and the rights available under the Consumer Credit Act; the reports also focus on the existing systemic problems and unethical practices faced by consumers."
Mrs Kumar said there was a lack of financial literacy among consumers when accessing credit to buy goods on hire purchase.
"In hire purchase for instance, 70 per cent of the consumers had no post secondary school education to fully comprehend the complex legal documents which they sign," Mrs Kumar said.
"Consumer illiteracy on the function of the hire purchase system is also largely due to a lack of clear information given to consumers by the hire purchase company."
According to the report, the hire purchase industry in Fiji is in dire need of a major overhaul.
The industry, it said, had a substantial influence in the credit market generating about $60million revenue annually.
"The HP industry is an important industry for consumers, however, the absence of a level playing field leaves many consumers out of pocket and in debt," Mrs Kumar claimed.
The reports would be launched by the Trade and Industry Minister, Aiyaz Sayed-Khaiyum.