Consumer hire agreements

Rules

A consumer hire agreement is drawn up and signed by the consumer and on behalf of the lending institution. The agreement states:

• What asset or product the agreement refers to (often including a detailed description)
• The cash price of the goods
• The hire purchase price, which is the total sum payable to complete the purchase of the goods, if the agreement allows the consumer to purchase the goods
• The amount of each installment by which the hire purchase price is to be paid
• The date each installment is to be paid
• If the agreement is for a certain period of time, the number of installments
• The total amount payable under the agreement including taxes
• The names and addresses of all parties to the agreement
• The name and address of the supplier of the goods to which the agreement relates
• Any additional costs to be paid
• The cost of early termination of the agreement
• The costs or penalties liable by the consumer if there is a failure on his or her part to comply with the terms of the agreement
• A statement that the consumer has the right to withdraw from the agreement within 10 days of receiving a copy of the agreement
• A statement that the agreement is for the letting of goods and that the goods in question remain the property of the owner (i.e. the leasing company)
• A statement that the consumer must inform the owner (i.e.the leasing company) as to the whereabouts of the goods to which the agreement relates
• The words "Consumer Hire Agreement" must be stated clearly and in a prominent position on the agreement form
• Any clause stating that the consumer has the option of purchasing goods.

Unless the requirements specified here are adhered to, the owner of the goods (i.e. the leasing company) may not be entitled to enforce the agreement.

If the goods you receive are faulty, you are entitled to your money back if you so wish. The supplier is obliged to offer you your money back. Alternatively, you can ask for substitute goods.

If you damage goods when using them under a consumer hire agreement, you will usually have to pay for the repairs yourself, unless it is stated differently in the agreement.

Advertising of consumer hire agreements

The fact that ownership does not pass to the consumer in a leasing agreement must be stated in any advertising. Statements like "Letting, Hiring or Leasing of the Goods only" and "The Goods Remain the Property of the Owner" should be included. These statements should be in at least as prominent a position as any sum payable by the consumer and enclosed in a boundary box in the case of a visual advertisement. The amount that is payable by the consumer must be indicated in the advertisement and be fully inclusive of all amounts including taxes.