A loophole in statutory protection for customers entering into hire purchase agreements has been exposed, says Eleanor Furniss
The recent case of Black Horse Ltd v Langford [2007] EWHC 907 (QB), [2007] All ER (D) 214 (Apr) has exposed a loophole in the protection offered to consumers entering into hire purchase or other agreements falling within the Consumer Credit Act 1974 (CCA 1974), s 12(a). While it is clear that Black Horse itself was not acting in a manner designed to circumvent CCA 1974, the case has highlighted a means by which other finance companies could do so.
STATUTORY PROTECTION FOR THE CONSUMER
All hire purchase agreements are regulated consumer credit agreements to finance a transaction between the debtor and the creditor, falling within s 12(a).
The person with whom the debtor ordinarily negotiates to enter into a hire purchase agreement is the car dealer. At common law the dealer will not normally be the agent of the creditor (see Branwhite v Worcester Works Finance Ltd [1968] 3 All ER 104), and the creditor will therefore not be liable in respect of representations
