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24 May 2007 / Eleanor Furniss
Issue: 7274 / Categories: Features
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Carte blanche for hire purchase sharks?

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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

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