Dear Editor,
Sometime ago an announcement was made that there will be legislation in place to address and regulate hire purchase (H.P) agreements. This being that some of the business places that offer hire purchase are taking advantage of persons who purchased items via the hire purchase system. Some of these hire purchase providers would seize the items bought after the purchase would have missed two or three monthly payments even though more than half the agreed cost of the item has already been paid. This has been done even though the period for full payment to be made as stipulated in the contract has not expired. I will agree if that period had expired and there was still outstanding balances to be paid, the company/store should institute legal proceedings against the defaulting customer to seize those balances. Costs and even additional interests can even be added. To threaten with legal action or seize items even before the stipulated and agreed time for full payment to be made has not expired is unreasonable and against the principle of natural justice.
This is one very important area that the framers of the H.P legislation would need to address. There is a clause in the H.P agreement which states that a fee for late payment will be charged. I personally agree with that, however the percentage of that fee to be charged has not been stated in the contract and as a result a 20% charge on late payments is being charged. For example a 20% interest will be charged on the sum that is being paid. If one pays $40,000 then 20% of that amount goes as fees for late payment and only $32,000 will go towards the total amount owed. This is too high, unreasonable and barbaric bearing in mind that as much as 70% interest on the regular price of the item has been added to arrive at the H.P price.
The Covid-19 pandemic that hit the country severely last year, has caused some persons to experience loss of income and was therefore unable to make their monthly installment payments, but this doesn’t mean that they will not honour the obligations but it might not be on time. It is my sincere hope that the team responsible for putting together the legislation base on the above will do so urgently in order to protect the hire-purchasers from exploitation.
Sincerely,
Colin Gill
