Help! DFS refusing to cancel order after they have denied credit agreement!

BoltonCrisis · 30 September 2012 at 3:26PM

Hey all,

First time posting here, so please be kind!

6 Days ago my girlfriend went to Bolton DFS to look for a sofa for our new flat, and found one to her satisfaction. She spoke to the sales adviser about their advertised payment agreements, and was told she could have the sofa she selected at £34.08 p/m for 12 months, and agreed.

She signed the relevant documents, all of which indicate that this would be Via their nominated finance provider, Santander. The contract even states that the outstanding balance fr the customer is £0, and the outstanding balance for Santander stands at £409.00. She went away happy and all was well!

Yesterday, (29/09), she receives a phone call from the same sales agent to tell her she has not been approved for credit with Santander, and could we arrange a different method of payment. They would not entertain another method of finance, and their only suggestion was paying a deposit now and paying the outstanding balance upon delivery, which is by the end of this month. That simply isn't an option for us at the moment, and we don't have a payday between now and the delivery date so full payment would mean being unable to survive through October!

We told DFS we would have to cancel for the time being, and they quite simply flat out refused, even with a fee.
Whilst this is certainly bad business practice, I'm not entirely sure if its entirely legal, considering all the documentation we possess indicates quite clearly we will only be paying £34.08 a month.

Any help?!?!

somethingcorporate · 30 September 2012 at 3:35PM

The method of payment is simply that, it does not alter the contractual position of you agreeing to purchase a product.

If you agree to buy an item then you are contractually obliged to pay for it and unless the paperwork suggests it is only binding on successful finance application then you are still required to find a method to pay for it.

I think it's quite sharp practice in purchases where finance is pretty much the compelling reason to buy from them but unfortunately that is the way it is and your inability to not get finance does not discharge your contractual liabilities.

BoltonCrisis · 30 September 2012 at 3:42PM

I assumed something similar to be the case, but all the documentation refers to being paid on finance. I'm very disappointed that, considering it is DFS/Santander that have changed the conditions of the agreement, they are unwilling to use their discretion to cancel the order, particularly after only 5 days.

Is this contract still binding though, even if it explicitly states that the payment method is via finance? surely that is a change in circumstances that effects the contract? We're more than happy to stick to the agreement we have made with them and it was signed under these outlined conditions, it just seems that DFS are entirely unwilling to show any consideration to circumstance.

There was also no discussion at point of sale about what happens if credit is denied, and the contract appears to stipulate that the only way we'd have to pursue payment is if we ourselves pull out of the finance agreement, which we haven't.

somethingcorporate · 30 September 2012 at 3:47PM

I don't think it changes anything (this has been posted a number of times before).

Fortunately for a breach of contract from your part (i.e. refusing to buy them) means you can only be pursued for genuine costs incurred by the retailer (which excludes profit!) which at this point would be almost nothing (assuming they do not start building the furniture until payment has been taken / approved).

If you cancel there is almost nothing they can do except huff and puff, it would not be worth their while to seek damages.

Send them a letter recorded delivery (or hand it to the manager) saying you are withdrawing from the contract.

terryw · 30 September 2012 at 3:51PM

I have no specific knowledge of this area but the expression "frustration of contract" has sprung into my mind from eons ago.

If nothing else this post will bump the thread so that some reader might reply with other views to something corporate (who may be correct).

It is certainly interesting as sort of thing must happen very frequently.

Edit: crossed with sc's post above

BoltonCrisis · 30 September 2012 at 3:55PM

Thanks, its really sad that there is no amicable solution to this, as we actually do want the product, are just unable to pay £400 within 3 weeks.

I really didn't expect a retailer like DFS to behave so dishonestly, I understand that these are sales people and are seeking commission, but the entire conversation/negotiation revolved around the finance scheme, it was not simply an ancillary discussion. It seems like they are trying to retain the sale somehow, and we keep saying if they will honor the original agreement (the contract even states that they might seek alternative creditors:they're not enforcing this) we'd be happy to take th product.

It's alarming how quickly they've shifted from a customer friendly, we can accommodate your needs to: we're leaving you without a paddle, not our problem, pay us the money you don't have.

What a shame.

somethingcorporate · 30 September 2012 at 4:00PM

Yep, I totally agree. I think there is a gap in consumer protection in this scenario where a product purchase is dependent upon finance and the application for finance fails.

Optimist · 30 September 2012 at 5:35PM

BoltonCrisis wrote: »

Hey all,

First time posting here, so please be kind!

6 Days ago my girlfriend went to Bolton DFS to look for a sofa for our new flat, and found one to her satisfaction. She spoke to the sales adviser about their advertised payment agreements, and was told she could have the sofa she selected at £34.08 p/m for 12 months, and agreed.

She signed the relevant documents, all of which indicate that this would be Via their nominated finance provider, Santander. The contract even states that the outstanding balance fr the customer is £0, and the outstanding balance for Santander stands at £409.00. She went away happy and all was well!

Yesterday, (29/09), she receives a phone call from the same sales agent to tell her she has not been approved for credit with Santander, and could we arrange a different method of payment. They would not entertain another method of finance, and their only suggestion was paying a deposit now and paying the outstanding balance upon delivery, which is by the end of this month. That simply isn't an option for us at the moment, and we don't have a payday between now and the delivery date so full payment would mean being unable to survive through October!

We told DFS we would have to cancel for the time being, and they quite simply flat out refused, even with a fee.
Whilst this is certainly bad business practice, I'm not entirely sure if its entirely legal, considering all the documentation we possess indicates quite clearly we will only be paying £34.08 a month.

Any help?!?!

Wonder if DFS operate a commission scheme for their sales people...

Get back on to them speak to a manager and tell them that you are going to have to cancel the order.

If they object then point them in the direction of Section 57 of the Consumer Credit Act and your right to cancel owing to the non execution of the credit agreement.

pinkshoes · 30 September 2012 at 5:51PM

I'd write to them saying the purchase was subject to their own finance package, so as they are unable to meet this part of the contract, then you can no longer meet your part of the contract. Tell them that you are happy to cancel, or you will offer them £100 for the sofa, or perhaps they'd like to give it to you for free??