Consumer hire agreements
A consumer hire agreement in Ireland, is an agreement where an item is leased or rented from a financial institution or finance company. Instead of borrowing money to buy a product, the consumer rents the goods from the leasing company that has bought the product. The leasing company hires the goods out to the consumer in return for rental or hire charge. As a result, the goods remain the property of the leasing company. However, in some lease agreements, there is a clause that allows the consumer to purchase the product, at an agreed sum set down in a lease agreement.
The term of the lease can vary from a few months to a few years. There is usually a distinction made between an operating lease, which generally lasts for a short period of time, and a finance lease, which involves larger items leased over longer periods of time.
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.
Different lending institutions offer different rates for leasing facilities.
How to apply
Contact your local financial institutions or check your local telephone directory for a listing of finance companies. To enter into a consumer hire agreement, you will need at least two forms of identification that must include a photo identification and proof of address. A current driver's licence, passport, student card and a recent household bill such as a gas, electricity or telephone bill are all acceptable forms of identification. There are alternative arrangements in place for establishing the identity of people who do not possess this documentation.
Making a complaint about a consumer hire agreement
When you purchase goods as a consumer, you have a number of rights under the Sale of Goods and Supply of Services Act 1980. If you are dissatisfied with goods received under a consumer hire agreement, you should make your complaint to the retailer who sold you the goods under the agreement. You should complain in writing as soon as possible, as your rights of redress decrease with time.
If you are unhappy with the retailer's response, you should contact the Competition and Consumer Protection Commission (CCPC). The CCPC advises consumers in general terms about consumer law. It cannot give a decision on individual disputes between a consumer and a supplier as only a court can order a trader to give you compensation, but it can investigate various practices relating to the terms on which goods or services are supplied.
If you cannot reach a solution with the retailer in relation to the goods, you can seek legal advice. If the product in question does not exceed €2,000, you can use the Small Claims Court, which does not require a solicitor. Lodging a claim costs €25, which is non-refundable. If, however, the product exceeds €2,000, you can appoint a solicitor who will act on your behalf and the matter must be brought before the District Court. If your complaint refers to a product costing more than €15,000 the case will be heard in the Circuit Court.
If you wish to complain about a consumer hire agreement made with a bank, a building society or a finance house that has been prescribed as a credit institution under the Consumer Credit Act, 1995, you should contact the Financial Services and Pensions Ombudsman. The Ombudsman can investigate complaints such as unfair treatment, uncorrected mistakes, poor service, poor administration, negligence and breach of contract/confidentiality.
Where to apply