He entered PC World
A dad whose credit rating was "annihilated" over a laptop he bought in 1998 has today won an epic legal fight to clear his name. Richard Durkin's 15-year nightmare began when he walked into a PC World store in Aberdeen, Scotland, to buy a £1,449 notebook. He specifically asked for a computer with a modem. A sales assistant …
He entered PC World
Entering is one thing , its leaving with something outside of your disposable income that's the worry.
He spoke to a member of staff
He believed him
He actually bought something
Second mistake: taking out a loan.
More and more I am convinced that taking out loans for anything other than a house (which is bad enough) is asking for trouble.
Not just PC World. I don't remember the details but there was a similar case with a BMW
Car was a lemon and the buyer took it back to the dealer who claimed they didn't sell the car to him, BMW Finance ltd (in the Cayman islands or wherever) sold the car - and the dealer had nothing to do with it.
So a long and expensive legal argument between the BMW dealer, BMW UK who imported it, BMW Germany who built it, BMW finance etc etc about whose car it was.
"More and more I am convinced that taking out loans for anything other than a house (which is bad enough) is asking for trouble."
Well said, sir.
A house, most people don't have a choice but to take a loan out for. A car I can kind of understand, but considering the depreciation of mine the last time I did it and the resulting negative equity, I certainly won't be doing it again. But a laptop on credit? I wouldn't even consider that, even if we were still in a time where lower spec models cost £1500.
This is how countries get into financial trouble. You have companies such as Wonga advertising on TV, encouraging people to take out short loans at 1600% APR for trivial things like a new bed or paint for the living room.
Not to buy anything mind you, normally for a laugh on my way back from shopping. The amount of BS I've heard in there before. I remember once I ended up advising customers where to go. The conversation went something like this.
Woman was looking for a laptop for her son who was off to uni for a graphics related course, she wasn't sure what to get, but she wanted it to be a surprise, she had a budget etc but knew nothing about computers. Apparently neither did the guy advising her.
"What's the difference between the i3, i5 and i7 processors?"
"Well it's all down to the number of cores in them, the i3 had 3 cores, the i5 has 5 cores, and the i7 has 7 cores."
It was at that point I interrupted with *Cough*BOLLUCK*Cough* I continued this for most of the advice he gave incorrectly until he gave up and walked off to get his manager.
In the minutes he was hunting for his manager I explained it all correctly to her, pointed out a few laptops which matched what she was looking for, then told her a few websites where she could get a much better laptop for an even lower price than PC world were asking.
I've also been kicked out of a different one of their stores while hovering around the helpdesk. Somebody came in with a broken laptop, wouldn't start up unless it was plugged in. The guy said it was going to be £50 just to look at it, and then another £X to fix it if they found the problem. I asked if I could have a quick look, took the battery out, gave it a blow (cartridge style) and popped it back in and it worked. A manager asked me to leave the premises shortly after :P
I know it's sad, but it's an endless source of fun for me. And on occasion (rarely) you can find a good deal. I've gotten a £700 camera for £300 in a sale, (RRP was £500 at the time) chea pheadphones. So it's worth a look every now and then.
You get an upvote, though I disagree. I got a laptop from PC world because I knew exactly what I wanted, and they were the only ones with it in stock at a reasonable price (not cheapest, but all in all after a few "free" extras, worked out about an average price).
Difference was, I would not budge an inch on anything, and knew the exact spec of the model, model number and specific parts it had weeks before I got it. :P
I did it for a Macbook Pro and the loan is interest free, which is the only time I'll ever take out a loan now.
He would have been better drawing an analogy with the BMW 3, 5 and 7 series :)
I have no interest in a Macbook too......that's what you meant, right?
From Googling 'Wonga dot com apr'
"Our flexible, short-term service comes with a representative APR of 5853%"
Always take an interest-free loan when offered. It's effectively a discount.
"Always take an interest-free loan when offered. It's effectively a discount".
Aren't you making an assumption there? Indeed, several assumptions. As far as I can make out, it's only a discount if you can get some interest on the money you delay paying. Today, however, interest is practically unavailable. If available, it's usually enough to keep the average person in coffee and Danish for a couple of days.
On the other hand, people being what they are - and not the perfectly logical Spock-like imaginary constructs of economic theory - if you don't pay that £1000 or whatever today, you will probably have spent at least some of it on other things by the time you are due to pay it in six months, or a year, or whatever.
The safest rule, as previous comments imply, is always to pay cash on the nail. "Neither a borrower or a lender be". Old Will was half right, at least. Being a lender is the best way to riches beyond the dreams of avarice nowadays, especially since it was established that if you lose any money through carelessness the government will pay you back out of taxes. But being a borrower (if you're an ordinary person) is an express route to the modern equivalent of slavery.
"But a laptop on credit?"
Yes, a laptop on credit, consider you have two options take £500-1000 out of your account in one go or take £41-90 a month out.
Personally Id notice a £1000 dip in my account, but £80 a month over a year - thats not going to make a dent.
The problem isn't taking out a loan, there are may reasons for taking a loan rather than buying outright, myself I bought a new laptop on credit because I needed one for some freelance work that I was schedued to start, my old one had died and it happened right after moving house and before xmas so funds were at an all time low!
The problem is taking out a loan without having means to repay it.
Regardless, the issue here wasn't that he had a loan, it was that they refused to cancel the credit agreement when he returned the item.
> Aren't you making an assumption there?
Yes, that money decreases in value over time. Which is a correct assumption.
If a loan is interest free, it generally means, you can get the same thing much cheaper elsewhere. There is no such thing as interest free - rather, invisible interest ;)
I wouldn't even say it was outside his disposable income. My guess is if he had wanted it, paying for it either under the credit terms or possibly all in cash would have been no trouble at all. But whereas the merchandise was not as advertised and therefore not fit for purpose, he returned it.
Virtual beer to toast to a rare man of principle, courage, and fortitude. Fifteen years is a long time to be fighting a nest of vipers.
No it isn't. They lie when they tell you that. The cost of the loan is moved to the price of the laptop. That's how all "interest free" deals are priced before the merchandise hits the floor.
And factored into the interest rate of the loan. And they lie when they say "interest free". That just means they've calculated the cost of the loan, including the interest and profit on the loan and moved it to the retail price of the good.
And while it is true almost no banks are paying interest on deposit accounts these days, nobody's offering loans at anywhere near those rates.
Alternatively you could plan ahead, save the £80 a month for a year and then buy the laptop without a loan.
It's like the mobile phone on contract or up front. You buy it up front and it's yours. You buy it on contract, you belong to them for 18 months. Break the phone? Don't care, pay up. Lose the phone? Don't care, pay up.
There are good debts and bad debts. A loan to buy a home to live in is a good debt, property in the UK over a decent period always increases in value, you fix your repayments at the value of the property when you purchase, and the money you use to repay the loan would otherwise be used to fund an alternate place to live.
A loan to buy a laptop is a bad debt. A laptop depreciates in value the moment you buy it, in 12 months it is worth almost nothing. If you can afford to pay a loan to buy a laptop, you can afford to save up and buy it outright.
However, as you said, there are times when you need to take on a bad debt, for the exact kind of reasons you elaborated on.
One of the big problems I have with wonga is that the target users of wonga already have credit available, and have used it all already, in which case taking a wonga loan is daft, or that the person is disenfranchised from credit, in which case it is just cruel. I did some daft things when I was 18 and awash with credit, it took me 15 years before I could get a credit card, overdraft or mortgage, despite having a good well paying career with a long service record, large disposable income and no outstanding debts.
> And they lie when they say "interest free". That just means they've calculated the cost of the loan, including the interest and profit on the loan and moved it to the retail price of the good.
This is a very simplistic and inaccurate view of pricing. There are lots of ways to make money out of interest-free loans, of which that is just one. The more common direct one is to insist that people set up a direct debit at the time of taking out the loan and rely on their not paying off the full amount at the end of the interest-free period. The loan is also a useful method of price segmentation, so doesn't need to make any money directly as it allows for greater sales and thereby makes money indirectly.
The last laptop I bought, I got on an interest-free loan. It was the same price with or without credit and a better price from the place I bought it than anywhere else -- which disproves your idea.
And I can't believe some eejit downvoted me for saying that money decreases in value over time. Honestly, some people.
> A loan to buy a laptop is a bad debt. A laptop depreciates in value the moment you buy it, in 12 months it is worth almost nothing.
This assumes that the laptop's only value is in its resale price. But that's not true: the value of my laptop lies in its ability to do stuff.
I used to need my own laptop for work, if I wanted to work from home (which I did). I was able to use an ancient laptop that would barely have fetched a tenner on Ebay, because all it needed to do was connect to a virtual PC on my work's servers, where all the actual CPU grunt work took place. That laptop was certainly not worthless: it allowed me to spend two years at home with my young daughter and saved me a fortune in petrol and car maintenance and insurance. Eventually, it broke down, so I immediately replaced it. As it happens, I had the cash at the time, but, had a loan been required, that would have been interest well spent.
£1500 in 1998 money is about £2300 in today's money. Around about 1 month's take home pay for a reasonably well paid person, which as an offshore worker, he would be. I'm sure on his income, the repayments on the loan would be extremely manageable, so he wasn't over-stretching himself.
"Alternatively you could plan ahead, save the £80 a month for a year and then buy the laptop without a loan."
Yes, or you could have it now and pay out the £80 a month in loan payments... either way you are still left with £80 less a month, at least with the loan you have the laptop first, as long as you can pay for it there is nothing wrong with taking the loan.
"property in the UK over a decent period always increases in value"
*Cough Norfolk coast*
*Cough flood planes that flooded a few months ago and are still flooded now*
Generally yes, but *ALWAYS* is a bit wide of the mark in this case.
If you buy property on a flood plain and skim over the bit in the solicitors report that says you are buying on a flood plain which may affect future property prices, more fool you.
Besides which, go back over a long enough period, I guarantee that the properties have increased in value. Unless it is worth less now than it was in 1989, taking out a 25 year mortgage in 1989 to purchase it would have been a good investment.
The only problems you ever have with property is if either you cannot afford the repayments or need to move before you have realised the inevitable increase in value.
When I was at University, PC World staff-bating was a favourite sport of Computer Science students... it basically involved testing the knowledge of their sales staff with detailed technical questions about the specifications and inner workings of assorted PC components.
Participants were awarded points based on a variety of criteria including how quickly their target ran off for help, how many staff they ultimately managed to get caught up in the discussion and whether they could get the staff arguing against each other about the relative merits of a product.
The most amusing one was when a friend of mine actually managed to cause a physical altercation between two PC World employees over the question of Nvidia vs ATI graphics cards...
And that is exactly why they set up the businesses this way. The intent is solely to confuse and confound a consumer making a claim. Any company playing this strategy is not worthy of the customer's business.
Ah the swift hand of justice.
Rule of thumb: judgement against you and for big company - days
- judgement FOR you against big company - a decade or more
That said, good for him!
To be fair - he did have judgement for him - and swiftly - his greed buggered it up...I have little sympathy
How the hell did it take fifteen years to settle a principle that is already so clearly set out in law? If a seller misrepresents a product, that is misselling, which is illegal, and they have to accept the product back and provide a full refund. The Consumer Credit Act says you've got 6 days to pull out of any credit agreement. And your contract as a buyer is always with the store who sell you the product.
I'm trying to think of a way to drag those three sentences out over fifteen years.
"How the hell did it take fifteen years to settle a principle that is already so clearly set out in law?"
You're not confusing law with justice or fairness, are you? The answer is perfectly obvious: big corporations can afford more and better lawyers.
"A jury consists of twelve persons chosen to decide who has the better lawyer".
- Robert Frost
"If a seller misrepresents a product, that is misselling, which is illegal, and they have to accept the product back and provide a full refund." -- They took the product back and refunded him his deposit, but, the customer did not cancel the payment plan he had entered into with HFC Bank. The bank ultimately is at fault for trying to uphold a contract for goods that were returned.
"he did have judgement for him - and swiftly - his greed buggered it up."
See this part:
"Although a sheriff in Aberdeen ruled in Durkin's favour in March 2008"
That's TEN YEARS of hassle and legal fees later. I would hardly call that swift. He may have been greedy and held out for more for all the hassle, he may have been advised by his lawyers to hold out for more. Or maybe the initial £116k settlement wasn't enough to cover the legal fees. There's no detail on the specifics here, but the fact he had to go through this at all when he had every right to return the mis-sold laptop gets my sympathy.
> They took the product back and refunded him his deposit
Eventually. They initially refused.
> but, the customer did not cancel the payment plan he had entered into with HFC Bank. The bank ultimately is at fault for trying to uphold a contract for goods that were returned.
Here's how it works. HFC pay PC World immediately for the laptop. HFC then claim that money back from the customer, plus interest. So, at the time Mr Durkin returned the laptop, PC World had been paid in full. What happened to that money? Either PC World kept the full payment (minus deposit) for goods that they had agreed to issue a refund for, which would be fraudulent, or PC World issued a full refund for the returned goods -- the deposit to Mr Durkin and the balance to HFC -- and HFC decided to pursue payment of a loan that had already been paid in full. I don't know which, but I seriously doubt it's the latter. In which case, HFC should sue PC World.
What did boffins have to say about it all? Was it all actually the fault of asylum seekers? Does it tell us anything about Princess Diana?
No - but the fact he couldn't afford a house as a result would have had a slight effect on house prices
Justice long delayed.
Around that time the staff in the Aberdeen store were particularly aggressive and would tell you anything to get a sale, not to mention the 1/2 hour lecture on the benefits of warranty cover.
I bought a £2500 Sony Vaio laptop from them on a similar credit agreement but thankfully I never had to return it .....
From the BBC:
"The decision was overturned later by judges at the Court of Session in Edinburgh after Mr Durkin himself appealed against the size of the damages".
So basically he was awarded £166,000, but wanted more and it back fired. So the long battle could of ended 6 years ago.
Pigs get fatter, hogs get slaughtered.
Not just a bit missing, but a bit of a misrepresentation.
The background to this can be read in the Court of Session report, which is a bit turgid, but quite readable.
[Edit:] the Supreme Court PDF linked to in the article reproduces much of the information in the above Court of Session opinion.
Basically: In December 1998 Richard Durkin tried to buy a laptop from PC World in Aberdeen. The salesman (because o DSG's bizarre rules) was not able to open the box to check the specification, and suggested that once purchased it could be returned if incorrect. Unfortunately, instead of immediately unpacking it in the store, the buyer took it home, discovered that it did not match the item requested, and returned it the following day. After a dickhead PC World "manager" initially refusing to accept the returned item, they eventually accepted the matter as a non-sale and returned his deposit. HFC, the hire-purchase provi ders had claimed that he should still pay them for the returned item, but as their agent (PCWorld) had voided the
sale the matter seemed settled. However when he later tried to obtain a bank loan, and a mortgage, these were blocked due to a bad credit reference from HFC. He did all the right things, appealing to PC World, HFC, Equifax, and Experian, but was unable to get the bad mark removed.
He sued HFC etc. in Aberdeen Sheriff Court and won in 2006. He claimed actual losses of £250,000, but was awarded a total of £116, 674.
However Mr Durkin disagreed with the method used to calculate the damages, and appealed to the Court of Session in Edinburgh in 2010. HFC took this opportunity to counter-appeal, trying to argue that his hire-purchase contract with them was separate from the rescinded sale contract with PC World, and that the Sheriff had been wrong in law. Alas Mr Durkin's side made a few mistakes when responding to HFC's counter-claim, e.g. omitting evidential documents from the appendices. As a result of that legal cock-up HFC prevailed, Mr Durkin was liable for the escalating costs, and lost his £116, 674 award from the Sheriff Court.
The Court of Session findings have now been appealed in the Supreme Court in London. The original Sheriff's opinion that the loan agreement was dependent on the sale, and should have been rescinded along with the sale contract,
has now become a precedent with standing throughout the UK. For legal-technical reasons Mr Durkin's damages have been set at £8000. Some lawyers have no doubt stuffed their pockets with considerably more.
"So basically he was awarded £166,000, but wanted more and it back fired. So the long battle could of ended 6 years ago."
The worst of malware can be measured in dollars, or pounds or whatever your currency of choice. Destruction of credit cannot be directly converted to an equivalent compensation in currency. Over 15 years, he's been repeatedly screwed a number of ways over a purchase he didn't want or ask for in the first place.
"Unfortunately, instead of immediately unpacking it in the store..."
If you've ever tried this in Real Life, you'll find the most common response is "get nicked".
If you've ever tried to buy an open box, you'll need to demand a discount, because open boxes always, always, always have something missing.
> If you've ever tried this in Real Life, you'll find the most common response is "get nicked".
He didn't mean mean open -> check -> buy, he meant buy -> open -> check -> refund, all within the store. Had he done that the credit agreement would never have been submitted, it would have simply been torn up.
I'm not so sure about Mr Durkin's "greed". Consider the possibility that the way he was treated made him so angry that he wanted to punish the culprits as heavily as possible. Fining a large corporations a few thousand pounds is no punishment at all - that's what the executives spend on wine at lunch. A few million might get their attention for a day or two, at least.
"He didn't mean mean open -> check -> buy, he meant buy -> open -> check -> refund, all within the store. Had he done that the credit agreement would never have been submitted, it would have simply been torn up".
Ah, I see. So why the hell didn't the salesman suggest that at the time? He was in a position to know what the store's rules were, and the customer wasn't.