FIVE more retailers have agreed to stop advertising interest-bearing credit deals as `interest free' following intervention from the Office of Fair Trading.
According to the OFT, Courts, Comet, Powerhouse, Time Computers and Dabs.com were all advertising `interest free' credit or `0 % APR' or `interest free option/choice' deals for their products. In fact, the OFF found that interest was payable from the date of the agreement if a lump sum was not paid off in full by the end of the interest free period.
John Vickers, the OFT's director general, said that the OFF takes the view that such adverts break the law and could mislead the public.
The OFF took the view that the use of `interest free credit' options or `0% finance' breached regulation 7(c) of the Consumer Credit (Advertisements) Regulations 1989. Effectively, Regulation 7(c) bans any advert that states or implies the consumer can get interest-free credit where in fact he would be liable for consumer charges.
Under the Stop Now Regulations, the OFT is required to consult with companies or traders it believes to be in breach or threatening to breach a number of laws harming the collective interests of consumers covered by those laws before taking court action. It can seek written assurances in lieu of court action.
The Stop Now Regulations cover the following areas: doorstep selling, timeshare, unfair contract terms, consumer credit, distance selling, package travel, package holidays and package tours, misleading and comparative advertising, sale of goods rights, TV broadcasting activities and advertising of medicinal products for human use.
Mr Vickers said: "I welcome the decision taken by these companies and urge other companies to follow without delay. When a consumer signs an interest free deal, they need to know they are getting just that."
The OFT has already secured similar agreements from seven other major retailers in the past year--Dixons Group, Harvey Furnishings, Magnum, Allied Carpets, Furnitureland, Fairway Furniture and Gregory and Porritts--and has said it will continue to press companies to comply with the law.
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