back to article Returning a laptop to PC World ruined this bloke's credit score. Today the Supreme Court ended his 15-year nightmare

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 …

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Re: A bit missing from this article that sheds a different light..

That still leaves 9 years from the initial injury, with a black mark against his credit score the entire time. Sounds like a good bit more than £166,000 in damages to me.

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Re: all within the store.

If that's what the clerk meant, then he should have walked him through that exact process.

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Anonymous Coward

Re: A bit missing from this article that sheds a different light..

> That still leaves 9 years from the initial injury, with a black mark against his credit score the entire time.

The black mark expires after 5 years.

Curiously enough, the credit agreement was taken out in December 1998 and 4 years 10 months later he was unable to put down a 30% deposit on a Spanish property. His line of reasoning for this was as follows:

1. He was unable to borrow at 0% interest on his credit cards.

2. This led to him borrowing more from Northern Rock.

3. That borrowing used up funds that could have been used for the deposit on the Spanish property.

He did not claim that he was refused other loans or that he had to pay extra on his mortgage and loans due to the black mark. He claimed he was unable to take advantage of the credit card merry-go-round.

The court decided that there was no causal link between his inability to buy a Spanish property and his bad credit reference. It was more to do with his general level of expenditure.

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zb

Re: A bit missing from this article that sheds a different light..

Here in Brazil it is standard practice when buying anything electrical to test it in the store. The salesman takes you to the cashier and you pay. He then takes you to the tester who opens the box, checks all the contents, plugs in the device and allows you to have a little play to make sure that it all works. You then have a 3 working day guarantee :((

I have never bought a Windows computer but guess there must be a different procedure when the licence agreement comes up.

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Re: A bit missing from this article that sheds a different light..

"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."

I work in in-store customer services for DSG and I would have to say that taking that attitude is one of the reasons companies like DSG have to refuse to refund opened items and have a very hard time selling them. I know from experience that consumers are just not interested in buying an opened item because they assume there is something wrong with it. I have had to explain many times that this is not necessarily so. The customer may be a buying a laptop where the customer has been given the wrong colour for example, opened it, taken one look and brought it back untouched. No fault, no missing bits, but the next customer offered the item will demand discount and be much more likely to not buy it at all. I once had a colleague in another store try to disuade me from buying a router than had been opened in favour of a sealed one because of this perception - I pointed out that I knew what it likely meant and took the opened one anyway, it is still working perfectly, if it hadn't I would have had 28 days to get a refund or exchange or the facility to make a warranty claim after then the same as on an unopened item. On the flip side I once had a customer open a brand new, sealed laptop only to find a laptop with no charger and half a bag of Malteasers in the box: a seal isn't everything.

As to opening the box in the store, certainly all the managers and customer service people I have worked with have no problem with a customer opening a purchased item in the store. For myself, I have been asked by customers if they can open an item they have just bought in store, my answer is always 'You paid for it, it's yours, open away'. I would also be interested to know if there was a display machine available this guy could have checked over in the store. I have only worked for the company a few years so this is before my time, but these days it is very very rare we won't have a computer we sell out on display for customers to inspect.

As to the credit agreement itself that is actually at the heart of this story, credit law can be a complicated thing but I don't personally see how it could have reasonably taken this long to resolve, the latter part of the case seems to revolved around the outcome of the case in terms of damages, costs and the like rather than the actual credit agreement and sale itself. I have had to refund credit agreements from time to time and it is now a simple task of refunding the deposit and letting the credit provider know the details of the cancelled agreement and it is done. I can only imagine something went wrong in that process and once the initial cooling off period has expired the courts would be the only way to resolve the dispute. Again, I am too new to the company to know what processes would have been in place back then but I don't see it being something likely to happen now, and hopefully it was the exception rather the rule back when he bought his laptop too.

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Greedy

Can't see any reasonable argument that one mark on a credit report could have cost him £250,000. Maybe next time I'm short-changed I'll sue them because I needed that to buy a lottery ticket, and I probably would have won!

So certainly give him his money back, with interest, and maybe even double it for the inconvenience. But he deserves everything he gets (or doesn't get) after appealing his £160,000ish first offer.

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Re: Greedy

A lump sum isn't everything. He also needed the black mark to be removed and the credit agreement to be cancelled. Was this included in the first offer?

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Re: Greedy

Can't see any reasonable argument that one mark on a credit report could have cost him £250,000.

The fine article stated that it affected his ability to secure financing for a house. Even if it only affected a few percentage points, I can see that adding up over the period of the loan.

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Re: Greedy

Quote: "The fine article stated that it affected his ability to secure financing for a house. Even if it only affected a few percentage points, I can see that adding up over the period of the loan."

If memory serves me right, 3 bedroom semi in a prime area in the south of the UK cost ~ 125K around that time. You could buy a house in the better areas of Finchley for that amount of money in 1998. Around Edinburgh? That would have fetched you a mansion. As far as Spanish properties circa 2003 (as referred by the article as as the official reason for the damages claim) - 250K would have bought a villa with a swiming pool in a prime location in the Canaries or Balearics. I do not remember the exact numbers, but I do not recall a single property on the market around Es Cana/Cala Llonga in July 1999 to be above 200. Most were under 110K with some as low as 65-70. 166K is 2007 prices (right before the crash).

IMHO the court was actually on the generous side awarding the initial 166k. There is no way someone who needs a loan to buy a laptop would have been able "consume" more over the course of the 10 years while this case has dragged on. In fact I fail to see how this could have costed him 166k. A default on an unsecured consumer credit agreement raises the cost of your credit by ~ 2 points (if you never default on credit cards and other ongoing payments) 2% extra cost means that he has to have 800000 worth of credit outstanding for it to cost him 166K. Yeah, right, a person who will be given 800K worth of credit agreement in need to take a credit to buy a laptop.

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Except...

Defaulted credit agreements only stay on file for 6 years from the date of default. It would have dropped off by 2004.

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Anonymous Coward

Re: Greedy

It's not purely (or even mainly) a question of money or reputation. Mr Durkin deserved substantial compensation for the contemptuous and unfair way he was treated by PC World, HSBC, and HFC. The court should have assessed damages based on the need to teach those arrogant corporations a sharp and memorable lesson.

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Re: Greedy

What has captured my attention is that the judges reduced the amount of the pay out to nothing when he asked for more. That is perplexing. Was it vindictiveness or a technicality?

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HFC

The worrying thing ( to me at least) is that they could feel able do this and then feel able to defend it.

It just highlights the total lack of what we used to call "probity".

A word that seems to be destined for the dustbin of history.

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Mushroom

Re: HFC

"It just highlights the total lack of what we used to call "probity". A word that seems to be destined for the dustbin of history."

Probity and such concepts were always a myth in any area of financial services. I'm no spring chicken, but I can't remember a time when the financial services industry weren't mis-selling something or behaving in an immoral manner.

It's taken me a whole two minutes to think of the following list that covers the past thirty years or so of financial services industry crookedness: Personal pensions, endowment mortgages, split capital trusts, precipice bonds, "tied" investment advice, OEIC investment funds, Collateralised debt obligations, "tied " annuities, PPI, interest rate swaps, credit and identity protection insurance, payday loans, SIPP pension plans. And that ignores wanton lending, that is perhaps the all time and ongoing mis-sale of the financial services industry, and the one that ultimately caused the current global financial mess. Arguably the invariably high rates on point of sale finance make that a product that was always mis-sold, but that's an area which the regulators have happily turned a blind eye to since time began.

Every time it takes about a decade from the practice becoming mainstream to the industry being forced to pay compensation, and by that time there's already one further mis-selling scandal maturing, and a new scheme being hatched that will go on to be mis-sold.

The FSA was useless, it's predecessors were useless, and I'll wager that the FCA will be useless. When it comes to financial services, consumers should (sadly) expect that anything they want to sell you is not in your best interests. In fact they should add that simple lesson to the national curriculum.

Meanwhile, rather than bend the financial services industry over and put a rough stick wrapped in barbed wire up its back passage, the government have decided that the energy market needs a thorough competition and markets authority investigation. I wonder what the banks are mis-selling today, and I wonder what new products they are developing to mis-sell tomorrow?

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Re: HFC

Upvoted, but...

> the FCA

The Free Clothing Association?

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Re: HFC

Hmmm, I learnt a new word today. Thanks...

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Thumb Up

Re: HFC

This: "they should add that simple lesson to the national curriculum".

If the national curriculum replaced one of the many useless courses foisted on kids with a financial education programme, in a few years you'd have much less people in abject poverty and on the dole, more people creating and holding down jobs, a lot less people deep in unsustainable consumer debt.

Of course no government would ever introduce such courses because it would also destroy the lottery/gambling business, decimate financial services income and depress tax revenue

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Re: HFC@ dogged

"The Free Clothing Association?"

Might as well be.

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Re: HFC

"I wonder what the banks are mis-selling today, and I wonder what new products they are developing to mis-sell tomorrow?"

Everything?

Was this a trick question?

BTW, you got an upvote from me.

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At least the plaintiff is relatively young.

How many similarly situated elders have jumped the mortal coil before justice was rendered?

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Re: At least the plaintiff is relatively young.

"How many similarly situated elders have jumped the mortal coil before justice was rendered?"

The financial services industry can even craft a product for that situation: HSBC group was fined about £40m for flogging unsuitable products to older investors. This included advising elderly customers (average age of 83), to buy investment bonds to pay for their long-term care, even though the five-year investment period for the bonds was often longer than the customer's life expectancy.

And this shows why the solution of "fining" the banks doesn't work. It's only investors money, there's no pain. The proper remedy should have been for those who did the mis-selling, those who devised the product, and their managers (up to and including the board) to have had each of their fingers bent back until the fingernail touched the wrist.

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Greed.

Sorry, he turned down £166,000 ??? I think the "financial nightmare" is as much of his own making as anything else.

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Re: Greed.

It seems to me that the courts have punished both sides equally for dragging this on so long. The credit agency have a Supreme Court decision that makes their business model definitively illegal (and I bet they'll be really popular at the next financial gougers' picnic!). The claimant has been punished for inefficiently pursuing the claim for so long. The pain is equally shared - something the courts are quite good at doing. So many legal principles are laid out in cases in which the claimant/plaintiff actually lost - see Donoghue v Stephenson for a classic example of a case that changed the law in a way that affects the whole country, but which the plaintiff ultimately lost.

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Black Marks and Credit Ratings

Honest question: In the US, if you keep your credit record clean for 7 years after you've had a credit issue, that bad mark ages off making your record clean again. Does it work the same way in the UK, or are there different aspects that come into play?

I ask because his fight has gone on for 15 years, more than double what would be necessary in the US to right his credit rating by just letting the black mark age off.

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Anonymous Coward

Re: Black Marks and Credit Ratings

A default or judgement on a loan will remain on your credit record for 5 years.

A clearout (you literally clearout from your address, don't tell the the lender and then default) will be on your record for 7 years.

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Re: Black Marks and Credit Ratings

The problem is once you get the bad mark against you it is more likely you get more bad marks against you for a cumulative effect because that one bad mark costs you on more than just the house mortgage. It also affects consumer credit rates and possibly even job eligibility.

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Avoiding the debt trap, eh.

So at least one Canadian avoided the debt trap for 15 years. He should thank them.

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Anonymous Coward

Well

At 16 years, at least he avoided Vista!

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Re: Well

I think I'd rather have Vista than Windows 8.

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Happy

..

What's s modem ?

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I find it completely extraordinary that HFC thought it prudent to let this matter go all the way to the supreme court for such a simple mistake. They will now have to pay their own and possibly the plaintiff's very high legal costs. I assume they were very badly advised by their lawyers and should not only fire them but sue them. If they didn't and this was due to their greed it serves them right.

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Anonymous Coward

"I find it completely extraordinary that HFC thought it prudent to let this matter go all the way to the supreme court for such a simple mistake".

It was a perfectly understandable mistake. They were simply acting on the principles that "the customer is always wrong" and "never give a sucker an even break". In other words, the fundamental principles of business.

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This could so easily have been me. I bought from a retailer (Red Submarine IRC) in a music mag a high spec machine for around £2000 on a credit agreement. The company promptly went bust prior to delivery.

Weeks later I received phone calls from a debt collection agency telling me I was liable for the cost of the machine or I had to prove non-delivery!

I told them where to go and thankfully that was the last of it, but initially at least the credit company regarded me as having defaulted on the agreement.

I've never regarded PC World very highly, but I certainly won't be visiting them again after this nightmare story, jeez, way to honour consumer rights.

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Anonymous Coward

Default

A Default stays on your Credit File for six years. After that it's gone.

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Mixed blessing. Putting a deposit on a house in Spain at the peak of the housing boom right before the crash. He should be thanking HFC, they saved him from a negative equity nightmare :)

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Never take a loan to buy a computer, ever. Computers are the things that lose value the quickest, especially Windows boxen ...

I remember buying a MacBook in early 2008 (shop display model - had just been replaced by a new model - 700 euro iso ~900) and selling it 1.5 years later (end of 2009) for the exact same price ... the mate got a superfast WindowsVista laptop he paid ~50% more for (~1000euro) and sold early 2010 for ~1/4 of the price. He gets MacBook pro's since ... ;-)

No, seriously, never take out a loan for a computer, unless it is less than 6 months - it is not worth it ... by the time you have paid your computer the thing is worthless ... especially windows boxen.

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What's your take on "buy now pay later no fee (possibly hidden)"? Did that with the money in savings to pay of as soon as 8 months was up for no additional fees. :P

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Anonymous Coward

Interest free options

Did that once on some white goods from Argos: put it on their credit card thing, left it for the 12-18 months of the interest-free period, made sure there was enough kept on one side and cleared it just before the 0% expired.

In general I avoid loans and credit agreements unless they're short-term. I use several credit cards, each with a different cash-back scheme, but clear them all in full each month, so I never pay any interest on them, and make a little bit back with the cash-back.

I'd never buy a new car on a credit agreement. Because of that I'll never drive the latest, shiniest, coolest, most gadget-toting, fuel efficient vehicle, but I also won't pour thousands of pounds down the drain over the course of the agreement due to the horrendous depreciation of new cars! Drive a 3-5 year old car, and put the money saved in to paying off your mortgage, or saving for retirement.

Honestly I really really recommend the MoneySavingExpert website: it's transformed my financial health, and savvy, since I started reading it in the late 2000s!

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Anonymous Coward

Re: Interest free options

"...put it on their credit card thing, left it for the 12-18 months of the interest-free period, made sure there was enough kept on one side and cleared it just before the 0% expired".

Good man. But do you know what credit card company managers call people like you (and me), who religiously pay off the full amount every month and never pay interest?

"Deadbeats". Honest to God. Funny the way a word's meaning can change 180 degrees like that... 8-)

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Anonymous Coward

Re: Interest free options

"do you know what credit card company managers call people like you (and me), who religiously pay off the full amount every month and never pay interest? "Deadbeats"

That's fine with me. They offer the interest-free periods, and the cashback etc. I'm simply (legally) taking advantage of what they're offering. And it's not as if they're not making *any* money out of us: there's still those fat credit card fees they charge the retailers.

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Headmaster

The court say 8000 / 15 years, that means ~6000 (and I am generous) 6 years ago, not 116 000. So, whatever you say is irrelevant, the court has all documents available.

"Greed will be your downfall"

Dungeon & Dragons - Eye of the Beholder

Grammar Nazi because he wears a judge's attire

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In the early 2000s I wandered into PC World in Hull and bought an HP laptop. Being an ethernet dunce at the time, I asked the rep about how to connect it to my modest network (no wifi then) as it had no networking. He sold me what turned out to be a PCMCIA ethernet card, and he suggested that I could snip off the adaptor's RJ connector and solder on a BNC plug instead. Or was it the other way round. He'd also discounted the laptop price heavily by bundling an extended warranty (£200+ worth IIRC). I got my revenge by cancelling the extended warranty within 28 days and I got a cash refund in the post. I found those sweaty purple shirts were hateful to deal with, and they would say anything to make a sale.

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Anonymous Coward

I bet he wishes he had checked the spec himself.

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14 days right to cancel?

Surely the credit agreement gave him the right to cancel it within 14 days?

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Richard Durkin's 15-year nightmare began when he walked into a PC World store

Yup, I know that feeling.

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I know his pain, partly

Here it is in easy slices

Went into PC World, purchased HP notebook attached to 3 contract because I was specifically told it had a SIM slot and 3G hardware built in, by a HP 'specialist' in-store.

Only it didn't; all it had was the slot but not the mini PCI hardware on board.

Took it back 2 days later, was told the 'specialist' had been removed.

Explained my woes and was told it would be too difficult to undo the 3 contract, and I could have virtually any other notebook as I had clearly been mis-sold.

After hours of standing and waiting, whilst their guys went through every other model, it transpired none of the models offered had the 3G hardware.

I walked out with what I hadn't asked for, a Samsung N310 with a compensatory RAM upgrade and some money shaved off. They wore me down, I should have stood my ground, I can see that now, and I am reminded every time I look at the N310.

What a joke they are, and nowadays even worse based on the crap they shift. You can't buy pc upgrade parts or 'bits' any more. I long for stores like Fry's in the US.

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Re: I know his pain, partly

Silly question, but could you not have asked for a refund for the cost of the mini PCI card and fitted it yourself?

Of course, Id have expected some other compensation as well. memory and some cash maybe...

I just had to have a look on-line because I thought that 3 should make the cancellation easy if you were still in the cooling off period and found this:

http://www.bbc.co.uk/blogs/technology/2009/12/cooling_off_mobile_phone_online.html

Another reason to do everything online, already knew about the distance selling act, but didn't realise that there was no cool down for contracts bought in store!

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I'm sorry but the guy is a massive wanker, ruining his own life(in his own words) to prove a point.

He should have just bought a separate modem and got on with it.

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"He should have just bought a separate modem and got on with it."

Hardly the point is it?

If you want a snickers and are sold a mars bar and a bad of peanuts do you have a snickers? No.

The point is that he was mis-sold goods, the store accepted this and accepted his return, the issue was that the credit agreement was not canceled meaning that they expected him to pay for goods that he didn't want and didn't own.

If no one stands up for their rights we will have no rights, do you want to live in a country where a company can cock up the sale of a laptop so immensely that you cant buy a house in x years time? Because I dont.

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So nothing much as changed in just under 2000 years?

If I recall correctly the first person to take action against the practices of the financial sector (ref: Mathew 21:12) eventually got hammered to a cross at the very early age of 33 (or thereabouts). For legal reasons, I should point out that I am not blaming the financial sector for that past act of violence, but I do suggest (only suggest, dear lawyers) that not an awful lot has changed since then, except maybe for the fact that Mr Durkin only got financially torn to shreds and not physically.

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