“Read the fine print” – legal advisors to persons conducting hire purchase transactions

With Christmas season approaching, persons are likely to make hire purchase or credit transactions, and legal advisors at the Legal Affairs Ministry and Attorney General Chambers are urging consumers to read the ‘fine print’ before signing any sale agreements.
“When you go to make these transactions, ensure that you read the fine prints; ensure that the price that displayed is what you agreed to and is what would be included in whatever agreement [you’re entering into],” Senior Legal Advisor at the Legal Affairs Ministry, Denise Hodge stated.

Hodge, along with State Counsel attached to Litigation and Advice Department at the Ministry, Mohanie Sudama, appeared on a recent edition of the “Simplifying the Law” programme that focused on the Hire Purchase Act, which was passed in the National Assembly in November 2022.
The legislation offers equal protection of consumers from exploitative practices and sellers from unscrupulous hirers (consumers). Twenty-seven of the 30 clauses in the Bill were amended, ensuring a balanced framework to protect both parties by creating a level playing field as opposed to the previous law, which was skewed heavily in favour of the owner over the buyer.
During the televised programme, the two legal officers urged consumers to always be vigilant when entering into agreements. They also called on persons to get familiarised with the new Hire Purchase laws to know their rights as well as that of the seller.
“…Ensure that you pay your instalments on time. You can even pay [it early and you get back some money after paying it early and in time. But you should also remember that if you’re in default of paying your instalments on time and paying them fully, the person you would have purchased the item from, has a right to be able to repossess the time. But once you would have paid 70 per cent or above for that item, they cannot take it. I know a lot of persons would have had such experiences,” Hodge pointed out.

Under the new law, sellers can no longer turn up at will to repossess an item. They have to file an action in the Magistrate’s Court in order to activate that process.

New law and clauses
On the other hand, Sudama used the opportunity to inform the public of clauses in agreements that are prohibited under the new law and which could make the transaction void.
“One of the provisions that the owner/seller cannot include is to be allowed to forcibly enter someone’s premise and to repossess the goods. If a condition like that exist in a Hire Purchase Agreement or Conditional Sale Agreement or a Credit Sale Agreement then that provision would be void. That provision cannot be legally enforced.”
“Another provision is denying the buyer/hirer from ending the agreement. If there is a provision that restricts the buyer/hirer from ending the agreement then that provision is also not legally enforceable. Another provision which also may not be legally enforceable is imposing additional liability on the buyer/hirer for ending agreement… The Act also prevents and restricts the owner/seller of the goods from relieving themselves of any sort of liability from the time the contract is signed to the end of the agreement,” the State Counsel explained.

Unfair conduct in hire purchase
Only earlier this year, in April, the Attorney General and Legal Affairs Ministry sounded warnings over complaints of alleged unfair and possibly unlawful conduct in hire purchase transactions mere months after the new law was passed.
“It is principally because of these reasons that the Government of Guyana enacted a modern Hire Purchase Act which came into force in 2022…Unfortunately, based upon the complaints received, many of which have been circulating on social media, it appears that provisions of the Hire Purchase Act are not properly implemented or complied with, or are being completely ignored,” the Ministry said in a statement.
Members of the public and specifically, those who intend to enter into hire purchase agreements were asked to get familiarised with provisions of the Act or to secure legal counsel to do so on their behalf in relation thereto.
Among the new provision in the law are: Section 3 (1) of the Act which imposes the obligation on the owner, to disclose in writing, the cash price before the hire purchase agreement is entered into while Section 3 (4) requires all hire purchase agreements to contain clauses that state the hire purchase price and the cash price of the goods; the amount of instalments required to pay the hire purchase price; and the date each instalment is payable.
Section 5 gives the right to the hirer or buyer to terminate the agreement while Section 6 lists the clauses in agreements which, if included, will be void and therefore unenforceable. Section 10 entitles the hirer or buyer to cancel the agreement within seven days of signing.
Section 13 entitles a hirer or buyer who has cancelled under Section 10 to recover monies paid under the agreement, subject to a restocking fee charged by an owner or seller to a maximum of 10 per cent. Section 23 states that where the hirer or buyer has paid seventy per cent or more of the hire-purchase price or total purchase price, the owner is prohibited from enforcing any right to recover possession otherwise than by action in a court of law.
Section 28 provides for rebate on early payment of five per cent per annum or such rate as may be prescribed where the balance of the hire purchase price is paid at least one month before the date it is due, calculated on the amount of such balance for the period in respect of which it was prepaid. This Section also provides that where a balance remains unpaid for more than one month it may attract an interest on such balance at a rate of five per cent per annum or such rate as may be prescribed, calculated on the amount of such balance for the period in respect of which it is due.
Additionally, Section 29 provides that in cases where a hirer or buyer has paid less than seventy per cent of the hire purchase price, the owner or seller must give at least twenty-one days prior notice of his intention to recover possession before he can enforce his right to recover possession of the goods. (G8)