Do Shopkeeper Negotiations Qualify as Antecedent Negotiations Under the Consumer Credit Act?

Question from Titim, Do Shopkeeper Negotiations Qualify as Antecedent Negotiations Under the Consumer Credit Act?

Answer from AI:

When a customer uses a credit card to purchase goods, the legal relationships and responsibilities can become complex, especially if there’s a problem like misrepresentation of the goods sold. In the UK, the Consumer Credit Act 1974 provides certain protections which might be relevant in such scenarios. Understanding whether a shopkeeper can be considered as an agent of the credit card company during these transactions is crucial for determining the rights of the consumer.

Understanding Antecedent Negotiations

Under Section 56 of the Consumer Credit Act 1974, antecedent negotiations are discussions or arrangements that occur before a credit agreement is executed and can impact the debtor’s understanding or decision regarding the agreement. If a shopkeeper, during the course of selling goods, makes representations about these goods to a customer who intends to buy them on credit, these discussions might be considered antecedent negotiations.

Is the Shopkeeper an Agent of the Credit Card Company?

The key issue here is whether the shopkeeper acts as an agent for the credit card company during these negotiations. Generally, for the shopkeeper to be considered an agent, the credit card company must have authorized the shopkeeper to negotiate or conclude the sale of goods on its behalf. This is not commonly the case as most shopkeepers are independent entities merely accepting various forms of payment, including credit cards issued by banks or credit companies.

However, if it can be established that the shopkeeper was acting as an agent of the credit card company (which is rare and would require specific evidence of such an agency relationship), then the misrepresentations made by the shopkeeper could potentially bind the credit card company under the terms of the Consumer Credit Act.

Consumer Rights Under Section 75 of the Consumer Credit Act

It’s also important to consider Section 75 of the Consumer Credit Act. This section might provide a more straightforward route for consumer protection:

• Section 75 holds the credit card company jointly and severally liable with the supplier (in this case, the shopkeeper) for any breach of contract or misrepresentation, provided the cash price of a single item is between £100 and £30,000.
• This means if the shopkeeper has misrepresented the goods, and they have gone out of business, the customer might still seek redress from the credit card issuer.

Steps to Take

If you find yourself in a situation where you’ve been misled about a purchase made with a credit card, consider the following steps:

1. Gather all relevant documentation, such as receipts, credit card statements, and any correspondence with the shopkeeper.
2. Contact the credit card issuer to dispute the transaction, citing Section 75 of the Consumer Credit Act.
3. If the response from the credit card company is not satisfactory, you may consider raising a complaint with the Financial Ombudsman Service.

Conclusion

While the shopkeeper is generally not considered an agent of the credit card company merely by accepting its cards for payment, protections under Section 75 of the Consumer Credit Act provide a potential avenue for recourse. It is advisable to consult with a legal professional who can provide personalized advice based on the specifics of your situation.