A supreme victory for consumers


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The Supreme Court in London has delivered judgment ending a 16-year dispute for Mr Richard Durkin over a laptop bought from the Aberdeen branch of PC World.

In 1998 Mr Durkin bought a laptop for £1,499. He took it home in a sealed box, having been assured that it would contain an internal modem, presumably a rarity at that time. He paid a deposit of £50 to PC World and signed a credit agreement for the balance with HFC Bank (part of the HSBC group) which provided PC World's in-store finance.

When he took it home he found that it did not have the promised internal modem, understandably he returned it and asked for his money back and cancellation of the credit agreement without penalty, as he had been promised when he had taken it away.

The £50 was eventually returned by PC World, but HFC said he was still required to make loan repayments under the terms of the separate credit agreement he had signed. Because of his unwillingness to pay, the Bank marked his credit record as a defaulting customer.

Mr Durkin took his case to court where he claimed that he was wrongly blacklisted for failing to comply with the credit agreement, and as a consequence had been unable to raise a loan to buy a family home.

The Sheriff court in Aberdeen agreed with him, that he was entitled to cancel the sale and the credit agreement, and awarded him substantial damages for the losses flowing from the inability to take out a loan.

The Bank appealed and in 2010 Appeal court judges ruled that “the contract of sale and contract of loan were separate agreements." and that he was not entitled to cancel the sort of in-store credit agreement on which many individuals, and arguable the whole economy, rely.

Mr Durkin then took his case to the Supreme Court seeking a six-figure sum, and has now won a famous victory. Of sorts.

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Though the court agreed that he was entitled to rescind the credit agreement, a major boost for consumer rights, his damages were confined to injury to his credit resulting from HFC’s breach of its duty of care in the sum of £8,000.00. That is way short of the amount claimed and little reward for the substantial time and costs poor Mr Durkin has had to put in.

The decision highlights what happens when customers, through dissatisfaction with the financed product, return it to its place of supply. It also highlights the risks banks face when following procedures in relation to credit reporting.

Although the case is Scottish in its origin, the Supreme Court’s judgment enables the ruling to be applied in an English, as well as Scottish, context.

We at Blacks have a specialist team dealing with all aspects of contractual disputes.

Please contact Luke Patel
on 0113 227 9316
or by email at LPatel@LawBlacks.com

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