There are few things in life worth spending 16 years litigating over, particularly a £1,499 laptop.
Unfortunately for one stubborn consumer that is exactly what has happened. Richard Durkin claimed that HFC Bank destroyed his credit rating over a credit agreement dispute which led to long and arduous legal battle. The case provides a cautionary tale for those who choose to litigate on principal.
After 16 years, a multitude of legal proceedings and cost running into six figures Mr Durkin finally reached a victorious conclusion in the Supreme Court, winning damages of £8,000.
Although the outcome is a rather pyrrhic victory for Mr Durkin personally, it is great for other consumers who also benefit from a multitude of protective legislation when it comes to consumer credit.
How Did the Litigation Go On for 16 Years?
This case started when Mr Durkin visited PC World in Aberdeen to buy a laptop in 1998. Upon discovering that it did not have an inbuilt modem, he took it back to the store the next day having been assured by a sales assistant that he could return it if it was not right. The store initially rejected the return of the laptop.
Although PC World finally accepted the return of the computer, there was a catch. Mr Durkin had paid for it by taking out a credit agreement with HFC Bank in-store with a deposit of £50. Eventually PC World refunded the £50 deposit but HFC Bank refused to cancel the credit agreement. After Mr Durkin failed to make payments under the agreement, HFC Bank had his credit rating blacklisted until 2005. He claimed during that period that this prevented him from buying a house.
It was not until 10 years after the laptop purchase, in 2008, that the Aberdeen Sheriff Court ruled that Mr Durkin could cancel the credit agreement when he rejected the laptop. It awarded him £116,000 in damages. However, the ruling was overturned by the Court of Session in Edinburgh when Mr Durkin appealed on the basis of the damages awarded.
The case has finally been settled in favour of Mr Durkin by the Supreme Court in London which awarded him £8,000 in damages.
A Strong Case for Consumer Protection
This case heralds a strong precedent for consumers that take out credit to buy goods. If the goods are validly rejected then the credit agreement must come to an end too. Lenders also owe a duty of care to consumers when it comes to blacklisting their credit rating. There must be a genuine default relating to a credit agreement which will not be the case if the consumer claims that it has been terminated and this is not properly considered by the lender.
Consumers already have a significant amount of protection under the Consumer Credit Act 1974 and 2006. Furthermore, responsibility for regulating consumer credit is shifting from the OFT to the FCA in April 2014 which should provide even greater protection and better outcomes for consumers.