REMEMBER one of those flashy advertisements enticing you to take items on credit without worrying much about finance because it is arranged?
While credit providers are fond of such luring advertisements to hook consumers, there are certain rules they have to abide by.
A credit provider cannot publish any advertisements that state or imply that credit is available unless the advertisement complies with several conditions provided by the law. Some of these conditions are:
1. The advertisement must show the annual percentage rate (APR) if it states the amount of any repayment. APR is the interest rate charged on a loan on a yearly basis and it is calculated on the amount of loan outstanding.
2. If the advertisement contains an APR and credit fees and charges are payable, the advertisement must:
(a)specify the amount of some of the fees and charges payable and state that other fees and charges are payable.
3. If a consumer suffers any loss, then he/she can make a claim to recover the loss for example: loss from misleading information in an advertisement.
4. The advertisement may contain the comparison rate calculated by the credit provider and if it does, then it must follow the procedure as laid in the regulation. Comparison Rate is a rate which includes both the interest rate and other fees and charges relating to a loan, reduced to a single percentage figure. Hence, it is always higher than the interest rate.
5. A person must not make a false or misleading representation to tempt another person to enter into a credit contract or related transaction.
6. A credit provider or supplier must not harass a consumer to apply for credit or to enter into a credit contract or a related transaction.
7. A credit provider must not personally visit a consumer's place of residence for the purpose of encouraging a consumer who resides there to apply for or obtain credit, except by prior arrangement by the credit provider with the consumer.
A credit provider commits an offence if he/she breaches these conditions.
While credit advertisements appear to be very tempting, you must not forget that credit providers are not always right.
As a responsible consumer, you must check that the credit provider is providing you the correct information.
More importantly, you must be aware of your own rights under credit contracts and not allow credit providers to force you into signing any credit documents.
* This is a regular contribution from the Consumer Council of Fiji. Email: email@example.com for more information.