Cash Converters Buy Back Legal Views

xlnc99

Looking for Legal Views on Long-Term Buy Back Arrangements

I would appreciate some independent legal opinions regarding a long-running dispute involving Buy Back agreements with a UK pawnbroker / second-hand retailer. I have deliberately anonymised the facts because the complaint is ongoing.

Over a period of approximately 2–3 years, I repeatedly entered into Buy Back agreements involving the same mobile phones and laptops. At various times I had up to five Buy Back agreements running simultaneously.

The pattern remained largely the same throughout:

• The same items repeatedly entered Buy Back agreements.
• I regularly paid extension fees to avoid losing the goods.
• I frequently made late payments and repeatedly asked for additional time because I was struggling financially.
• Eventually, despite paying substantial extension fees over several years, I lost most of the items because I could no longer afford to continue.

The retailer therefore had complete visibility of a prolonged pattern of:

• repeated extensions;
• repeated late payments;
• repeated requests for additional time;
• multiple concurrent Buy Back agreements;
• repeated use of the same assets; and
• increasing financial difficulty.

My complaint is not that one individual Buy Back agreement was unfair.

My concern is whether the overall relationship should be assessed as a continuing course of dealing rather than dozens of isolated 28-day contracts. Although each agreement had a separate contract number, the practical reality was a continuous cycle involving the same customer, the same items, repeated extensions and increasing dependence upon the product.

The main issues are:

1. Repeated extension fees

I paid significant extension fees over a prolonged period simply to avoid forfeiting my property. Despite years of obvious financial difficulty, the arrangements continued without any apparent review of whether this long-term pattern remained appropriate.

2. Repeated double extension charges

On numerous occasions I was only around 5–10 days late, yet I was required to pay what amounted to two extension fees before the agreement could continue. This happened repeatedly rather than as an isolated incident.

3. Replacement agreements

Following late payments, I was sometimes issued with agreements carrying new contract numbers. However, as far as I can recall:

• the same item remained in the retailer's possession;
• the same customer remained involved;
• no fresh cash advance was paid; and
• no fresh exchange of goods took place.

This raises the question of whether these were genuinely new Buy Back agreements or simply a mechanism for continuing an existing arrangement.

4. LayBuy

The retailer also offered a product called LayBuy, which, as I understood it, allowed customers to repay the balance over a longer period by instalments instead of repeatedly paying 28-day extension fees to keep their goods.

On one occasion, a member of staff suggested that LayBuy would be a more suitable option for my circumstances. However, when I later tried to use LayBuy for other items, I was told it was not available and that my only option was to continue extending the Buy Back agreements. As a result, I continued paying extension fees instead.

I am interested in whether a business should be expected to apply suitable alternatives consistently where it has already recognised that another product may be more appropriate for a customer's circumstances.

5. Published policies

The retailer's published policy states that customers must provide valid proof of identity and proof of address when entering into Buy Back agreements, and that these documents should be refreshed periodically where appropriate.

However, my relationship with the retailer lasted around 2–3 years and involved numerous Buy Back and replacement agreements. I do not recall being asked to provide updated identification during that time.

I am interested in whether this has any legal significance if the retailer's position is that each replacement agreement was a completely new contract.

My Questions

I would be grateful for views on the following:

1. Should a court assess this as numerous separate contracts, or could it consider the practical reality of a continuous commercial relationship?
2. Could repeated extension fees and repeated double charges over several years potentially be challenged under the Consumer Rights Act 2015 or any other consumer protection legislation?
3. Does the overall pattern of repeated extensions, multiple concurrent agreements and obvious financial difficulty raise any wider legal issues regarding fairness or customer detriment?
4. If a court found aspects of the arrangements unfair, what remedies might realistically be available?

I would appreciate any thoughts, particularly or those with experience of consumer law, pawnbroking or Buy Back arrangements.

Aylesbury_Duck

I suspect there may not be many/any people on here with detailed understanding of the regulations as they pertain to this scenario.

Have you considered Citizens' Advice, or perhaps a local solicitor firm might offer a short free consultation to give an initial view?

Okell

I suggest you also post on legal beagles: General Legal Issues - LegalBeagles Forum

xlnc99

Yes, this is rather complicated but there are many many issues on hand. I have researched this thoughly and their are many loopholes becasuse buy backs are not regulated so dont fall under FOS and FCA however, thats not to say their is protection and legal avenues. I have kept my post short (or as short as i can) but believe me if i went into detail of what has happened, there is about 5 or 6 issues in hand which really are criminal and if regulated there would be heavy heavy consquences.

xlnc99

https://forums.moneysavingexpert.com/discussion/comment/82052414#Comment_82052414

reched out to many solicitors - alot willing to listen and feel i have a case. Others didnt say i dont have a case but said they dont have the capacity to deal with me. Problem is firms who are interested, they all charge just for consultttions etc and i wont get this money back if i take it to court.

Citizens advise is useless, you can never get through to them.

xlnc99

https://forums.moneysavingexpert.com/discussion/comment/82052415#Comment_82052415

Legal Beagles helped me many time many years ago. I forgot about them. A great website, havent used them for many years

A_Geordie

Should a court assess this as numerous separate contracts, or could it consider the practical reality of a continuous commercial relationship?

The court as a starting point will treat each of those contracts you signed as separate and distinct. It really comes down to understanding how those contracts are structured and worded following the end of the original agreement. Those additional contracts would need to be worded in a way to say they are extending the term of the original contract rather than creating a 'new' contract. My immediate question would be, if they are intended to be treated as separate and distinct contracts, why are there extension fees because they would only be relevant to extend the term of the original contract otherwise you can't extend what is essentially a new contract.

Could repeated extension fees and repeated double charges over several years potentially be challenged under the Consumer Rights Act 2015 or any other consumer protection legislation?

Maybe, under section 62 of the CRA, but arguing unfair contract terms is really difficult and the courts are reluctant to accept terms are unfair unless it is clear that there's a significant imbalance. If you argue the contracts are a single, continuous arrangement, then the unfair element will be the unreasonably excessive fee amounts.

On the other hand, if the contracts are treated as separate from each other, you may still be able to argue that the extension fees and related charges are unfair, on the basis that there shouldn't be a charge for extension fees since each contract is treated as a 'day 1' contract when you signed it, and there obviously cannot be an extension of a pre-existing contract if it is to be considered a new contract.

However, I would exercise caution. The Competition and Markets Authority has published guidance on unfair contract terms and what might be considered as such. Link to the guidance below, and pay attention to potentially unfair terms list (known as the grey list) on page 64, particularly guidance paragraph 5.14.1.

https://assets.publishing.service.gov.uk/media/5a7f8b58ed915d74e33f716e/Unfair_Terms_Main_Guidance.pdf

Does the overall pattern of repeated extensions, multiple concurrent agreements and obvious financial difficulty raise any wider legal issues regarding fairness or customer detriment?

Not that I can think of, until 15 July when Buy Now Pay Later becomes regulated and subject to the FCA's regulatory scope. The only other option to consider would be whether Cash Converters had applied aggressive commercial practices under the Digital Markets, Competition and Consumers Act 2024. Schedule 20 sets out a list of banned practices, otherwise you would need to argue that Cash Converters committed a misleading action in entering into each contract.

The Competition and Markets Authority has guidance you read through here:

https://assets.publishing.service.gov.uk/media/691b9bd821ef5aaa6543ee6f/Unfair_commercial_practices_CMA207_18_Nov_2025__2_.pdf

If a court found aspects of the arrangements unfair, what remedies might realistically be available?

If a term is found to be unfair, it would be treated as never existing, so your remedy would be a refund of the amounts paid under that term, with interest.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6674384/cash-converters-buy-back-legal-views

Its not clear, so did they have your 5 items continuously for a period of 2-3 years and you just kept paying to extend the buy back period or was this a cycle of sometimes extending, sometimes buying the items back but then asking for a new sale and buyback on them a few days/weeks/months later?

Pawnbroking is a regulated industry but selling your items with an option to buy back isnt, its not dissimilar to insurance -v- warranties, people use the terms interchangeably but there is significant legal and regulatory differences. As an unregulated industry the requirements to consider customers financial position etc simply isnt a requirement… could you imagine the uproar if shops started refusing to sell TVs to people saying they looked too poor to be able to afford it and should be prioritising essentials over entertainment?

An "extension" could be treated as you buying it back and instantly reselling it to them with the two transactions happening simultaneously and so limited monies actually transferring hands or it could simply be an amendment to the original contract's end date.

As a dealer in second goods they will have stricter AML requirements than a regular shop, however their failure to do AML checks inline with their policy wouldnt have any baring on the outcome of your complaint. Barclays were fined £42m for systemic failures in their AML checks but that didnt result in them having to cancel all loans.

If you are considering paying a solicitor or going to court alone you are going to have to firm up the details of the case… 2-3 years is a rather wide window of uncertainty, not sure if you did AML checks doesnt bode well (noting that AML checks are irrelevant)

xlnc99

Many thanks for your replies. I hae asked for a SAR and waiting for the complete SAR to be sent, no doubt they will use the full 30 days allowed. I have already recieved a response from CC saying they are reviewing it, but funnily enough it came from the compliance manager and not complaints team - which shows me its been esclated for a compiance issue. I did note, he subtly said these buybacks are unregulated and cant go to the FOS etc - i took that as a subtle hint of him telling me they wont bother to do anything and ile have to take it to court. Small claims will be my route as it would be less the £10,000.

So i am already preparing for this route in advance as i tell CC not bother or maybe give some sort of small compensation refund, but not to the extent which i think is fair and deserved. I cant belive its taken me so long to relaise what they have actually did, and more concerning its a wider issue for other customers.

Their contracts are designed in a way, but you can only extend ONCE according to their contract, this is a loophole for not extending borrowing from what i been told. After then, you can extend but they give you a fresh brand new contract, so do they whole process again. But here is the problem - on their policy it says new contracts etc means new ID checks, new cash being exchanged etc. I am not sure whether they gave me new contracts or carried on exteniding previous ones past the 1 or 2 monts - this is what the SAR will tell me.

But that is jsut one issue, like i said mutliple issues. I will give an exampel and lets make it £100 product that a buy back was given for. its around 30% interest, so 28 days its £130 you pay to get the product back or £30 extension. If you 3 days late extending, they wouldnt say ok we are selling the product, they would say if you want to extend it again, you need to be £60 instead of £30, but you wont get 56 days, you will still get on the 28 days even though you paid double. I did this many times. This i know is illegal and unfair, its bascially a scam and it goes against the contract. How they acn get away with this is beyond me?? I also heard instore, they did this to many other people too.

This links in to the other issue in which you are allowed to go instore and buy any item by putting a 20% deposit down and paying three instalements intreet free. So for £100, you pay £20 now then 80 within three months. I found about this later on and did this as it makes more sense finanically then paying the same interest per month but not getting your item back. I was only told about this whne someone loooked at my account and saw how much intresst i was paying for my items - they said do layby.

When i tried it on my other items, the manager refused give all sorts of excuses cause he knew less profit for their store. Doesnt make any sense? They charge me double if your late one or two days and on top of that dont let you do layby on your items to maximise profit. Yet if i saiad to them, sell the item then next day i walk in and do laybuy - surely they can stop you? Its advertised everyhwere for all customrs.

None of this makes any sense

I have spoken to my local MP, who is intrested in the final outcome. Wants me to keep himposted. He also told me so speak to the FCA and trading standards to make a complaint. Furthermore, my local council as they assign licencec to each store. I need to make sure this pracice stops as i know other customers are getting screweed aswell and maybe they dont know their rights.

In answer to some of your quetstions above

At any one time, i had 5 items at once but that was rare. It was mostly between 1-3 over a contious period of time. Sometimes bought back and re sold via buyback - SAR will tell me exact dates

I can onfirm ID was only checked once at the start when i actually registred in store. Since then they never checked ID again (even though their own website has specific rules about this and AML). infact, my ID even expired at one point and they still gave me new contracts based on the same ID. for 3 years they used my same driving lincence that was on the databse

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82053014#Comment_82053014

Part of the problem is you are using the wrong language, the contract will certainly not say "borrowing" because that would make it lending and therefore pawnbroking which is a regulated activity.

You have instead sold them your item for £100 with a guarantee that it will still be available for you to buy from them in 30 days for £130. So legally the title has transferred and they own the item until you come back in to buy it or if you dont come back in time they will simply sell it at a not guaranteed price to someone random.

If after the 30 days you still arent in a position to buy it back but you dont want them to sell it you can pay another £30 for them to hold it for another 30 days without selling it to someone else. Its covering their staffing, taking up stock space, the money thats gone from their till but the stock they cannot liquidate etc.

If you've already extended it once then the next time you come in you have to pay £130 to buy the item back, then sell it to them again for £100 and can come back in 30 days to buy it back for £130 again. But rather than do the cashing for both transactions in full they net them off so you simple pay the net £30 to start a new contract.

Note the £30 is not technically interest, it's the spread between what they buy the item for and what they sell it for. Same as a lease car, you dont pay interest on it but clearly the cost of interest to the leasing company is factored in. Same as Tesco's buys something for £0.50 and sells it for £1.15; the delta covers the operational costs and generates the profit.

As this is not lending there is no licence required and it's not covered by the FCA. The problem is you are talking about lending/borrowing, interest etc which are not relevant terms to what is actually happening. You're talking as if it's pawnbroking but it isnt technically.

I dont fully know the rules for my own industry, of what the exact tipping point is between warranty and insurance, there are firms like D&G who sell both, and firms like Dixons/Currys that for a long time spent a lot of effort to ensure their own offering couldn't be classified as insurance. I'm therefore in no position to argue if their interpretation is acceptable.

Once did a piece of work on buying a forward after the EMIR regs came in but before it took effect on calls etc. Even £1,500/hr lawyers couldn't advise if buying a put and a call with the same financial result as a forward but isnt actually a forward would be in breach of regs or not - these things are complex

xlnc99

I totally agree and i think its very complex. Ignore the teminology i use in the post i.e borrowing etc.- that was just for ease of explaining. I know all the tricks they use and loopholes they do. I also have read aritcles from the FCA regarding how buy backs cant be loopholes for borrowing - its a get out of jail card basically

That being said, i do honestly believe here are many rules and regs (which as you said are complex) or if anytin something the trading standards and local council should look at - even if i dont get my funds back

For me worst case would be smalls claims as there would be a small fee between £100-400 depending on the claim size. Then it comes down to the judge and how he interprets everything - worth the risk for me. Is it worth CC risk going to small claims and if the judge rules in my favour out of just one of the many issues could be a slight problem for CC for anyone in the future wanting to go down the same road