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Dealing with disputes

Consumer Council Of Fiji
Saturday, November 24, 2012

Consumer Grievances in Hire-Purchase

Credit Liability grievance and consumer dispute are areas of concern in the hire-purchase (HP) market.

How effectively these issues are addressed by HP companies is the question!

According to the 'Hire Purchase Industry in Fiji' report, 8 per cent of HP consumers disputed their liabilities with the seller of which 29 per cent of the disputes resulted in positive outcomes. Some of the outcomes were as follows:

* money was refunded

* agreement to vary payments made

* goods were returned

* seller corrected the mistake

But a resolution in favour of consumers at large was not the dominant outcome.

In 21 per cent of the cases, the consumers lost out leading either to them paying off for the items early in frustration, or increase in the grievances to the Consumer Council of Fiji, or losing the items through repossession.

For 43 per cent of the disputes, the sellers held their grounds claiming contractual provisions, while in 7 per cent of the cases, the consumers were given the run around within the seller's premises (these consumers were advised to see someone else, come later, or that manager is not in, etc).

An interesting finding in the report is that in none of the grievances in which the consumers had liabilities, did consumers seek judicial intervention.

The likely reason could be that seeking judicial intervention would be a more expensive exercise than the total value of liabilities in most cases or they are not aware that they could take their cases to Small Claims Tribunal (SCT).

Typical legal commencement charges in Fiji for documentation and filing of civil cases involving contracts are around $500.

Legal professional charges are additional to the documentation and filing of cases.

These sums are disproportionate to the gains that an average HP consumer may get from litigation (legal action), since on average, the HP loan is $1,224.

This explains why 95 per cent of the consumers had not even considered taking legal action against the sellers for their grievances.

In Fiji, the SCT is one cheaper avenue through which aggrieved parties could seek remedies on claims or disputes.

However, data shows that of all claims filed in the SCT between 1997 and 2008, only 0.135 per cent of the claims were by consumers against HP dealers. In contrast, 23 per cent of all claims filed were by HP dealers against their clients for nonpayment.

Approximately a half of all claims lodged in the SCT are claims by commercial entities. Of this, 46 per cent are claims by HP dealers.

The fact that a very small proportion of HP consumers filed claims in the SCT raises the issue of whether the SCT operations are known to consumers. What is known is that a large majority of the HP consumers are those with established incomes. They are either in employment or self employed.

Both these categories, but more so those who are employees would hardly get time off from their work to file claims in the SCT; the SCT operating hours are quite restrictive. The report states that the lack of flexibility, particularly of sitting during times when workers would be able to access the SCT facilities, is prohibitive of HP consumers accessing SCT with their claims grievances.

Additionally, about 30 per cent of all consumers apply for variations in payment agreements. Of this, about 70 per cent receive the variations.

However, this comes at a cost, which the consumers bear. Financial hardship is the only reason for application for variation that involves extension of repayment period.

The outcome is that those who are in difficult financial situations are required to pay more for variation documentation.

For those who did not get any variation approved, borrowed from others, including money lenders, to pay the installments.

This created further debt and interest burdens for consumers.

Council Advice

If you are not satisfied with your credit purchase, you must seek all avenues to get justice rather than suffering in silence. Lodging a complaint with the council or SCT would be more cost effective. Consumers also have a responsibility to take out time for matters that concerns them.

* To learn more on your rights, the council urges you to watch Dollars & Sense at 8pm on Tuesdays on Fiji One.

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