DFS Sofa - Declined credit question

bjcusick

I know this has been asked for before but I didn't want to tag onto the end of a dead thread so thought it would be best to start a new one.

My daughter visited her local DFS store and ordered a sofa. She applied for credit to fund the sofa on interest free credit, signed the paperwork and accepted the recorded message they play explaining how the order works as well as cancellation.

The agreement was that she would pay £100 on delivery with the remaining balance over 12 months. She left the shop without paying anything...

A few days later she was called by the shop saying she had been declined credit and asking her if she could get someone else to apply instead. She couldn't so said she couldn't go ahead with the deal. The shop said she was still liable and had to go ahead with the deal.

Having read through the contract, it does indeed state that you still have to pay even if you are declined credit but she has no means.

I called into the shop and had a discussion with them prior to revealing my interest in her contract, pretending to be a potential customer. I asked the question, 'what if I'm declined' and got the same answer - apply in someone elses name, use a credit card, they aren't bothered but you must go through with the deal and there is no option to cancel.

On further questioning and after I'd refered to my daughters contract, they stated that she could pay a minimum of 10% as a deposit and then continue to make payments to them until the entire value had been covered, at which point they would deliver the sofa in the time it took to manufacture it in their factory (@ 3 weeks).

When asked if there was any time limits on this they said no including when I suggested it could be in excess of 1 year.

Somehow, I think they are just making things up. There is no way that they could guarantee that the sofa was still available to order at some undefrined point in the future so I think they are basically looking to take the deposit hoping she will never come back - quids in so to speak.

In my oppinion, since they knew she had been declined finance and they offered to deliver the following year, I'm assuming no order has been placed to actually manufacture the sofa.

So my question is this - what is she able to do legally.

My thoughts are that she should simply tell them she cannot go ahead without the finance (something she says she mentioned anyway) and not pay any money to them.

Any advice greatfully received...

arcon5

Legally she would be responsible for covering their provable losses, which could include an admin fee. If she rescinds from the contract that is.

However, it's likely they will send a few threatening letters then give up.

Personally i'd just tell them I will no longer be continuing with the order and ignore them. This practice is clearly designed to keep the customer at any and all costs.

Zandoni

arcon5 wrote: »

Legally she would be responsible for covering their provable losses, which could include an admin fee. If she rescinds from the contract that is.

However, it's likely they will send a few threatening letters then give up.

Personally i'd just tell them I will no longer be continuing with the order and ignore them. This practice is clearly designed to keep the customer at any and all costs.

I agree, I'd go in the store and tell the manager face to face that there's no way that your daughter will be able to afford it now and they should cancel the order. I'd also back this up with a registered letter to the manager and their Head Office.

They will probably ignore them but at least you tried and you have some proof you ensured the order was cancelled.

somethingcorporate

From a contract point of view they are in the right and have the signed proof to back it up. Finance is just the method of payment so if she has agreed to buy something just because she cannot do it through finance does not mean she can now just back out.

My personal opinion is I think this situation is wrong for consumers, if you are declined for finance you should have the opportunity to withdraw from the contract. Unfortunately lots of companies do not allow you to do this.

Back in the real world I think the above advice from Arcon and Zandoni is spot on. They may bark at you but it is unlikely they are going to take it any further. Withdrawing only allows them to pursue you for provable losses which I think would amount to less than the deposit which means it would not be worth their while to chase it.

Good luck and pop back if you need any further support.

bjcusick

I thought it might help if I let people know that it's all sorted out now...

I called into the store last weekend to have a chat wth the manager and ask some questions directly of him, specifically about whether there was a cancellation policy, what the minimum deposit was, how safe this deposit would be and how long before the balance had to be paid to guarantee the sofa to be available as originally specified amd at the initial price.

I got the standard 'Legally binding contract' comment but pushed for the other questions. The deposit one was an interesting one because my daughter had originally been told she 'could pay as much or as little as she wanted'. This turned out to be untrue and the actual minimum was 10% of the order although we could drop the delivery price from the deal since it was no longer required if finance was not being provided.

To cut a long story short, I advised the store manager that I needed some clarification in writing from head office on the points raised and I wasn't prepared to accept his statement saying this was his assumption. I also stated that I would be making a complaint about his sarcastic behaviour towards my daughter and myself.

Surprise surprise - my daughter got a call the next day from the store saying they had found another buyer for the sofa so we didn't need to continue with the contract. They also asked if we would still be making the complaint...

In the interest of good will, we decided to not pursue this any further and the contract has now been cancelled.

Thanks for the guidance on what was and was not legal in this intance. A lesson learned by me at least and one I'll remember next time I'm thinking of taking up an offer of interest free credit...

ALTEA

I wonder why DFS can't tell you there and then weather you've been accepted or not for credit. The store that I bought a kitchen from could do so there and then over the internet. It obviously suits them to delay the process until after you have signed. There is no excuse with the internet and all the other technology they have access to. Its seems DFS are right but maybe a bit under hand in the way they do business. Lesson learned stay clear of DFS and others who operate in this way.

DVardysShadow

somethingcorporate wrote: »

From a contract point of view they are in the right and have the signed proof to back it up. Finance is just the method of payment so if she has agreed to buy something just because she cannot do it through finance does not mean she can now just back out.

My personal opinion is I think this situation is wrong for consumers, if you are declined for finance you should have the opportunity to withdraw from the contract. Unfortunately lots of companies do not allow you to do this.

Back in the real world I think the above advice from Arcon and Zandoni is spot on. They may bark at you but it is unlikely they are going to take it any further. Withdrawing only allows them to pursue you for provable losses which I think would amount to less than the deposit which means it would not be worth their while to chase it.

Good luck and pop back if you need any further support.

I don't think that it is so clear cut at all. The primary question is

• was it 2 contracts, 1 for a sofa at £<x> and another for finance of £<x>?
• or was it 1 contract to buy a sofa and pay by finance?

This is so dependant upon the actual detail of what was said and what is written that we probably could not give a clear cut answer here.

The overall advice is if you are buying something on finance, you need to make clear before agreeing to buy that if finance is declined, the deal is off.