Investigation uncovers poor credit deals

CUSTOMERS at some of Suffolk's biggest high street stores risk landing themselves in debt with credit deals because of poor staff knowledge, an undercover investigation has found.

CUSTOMERS at some of Suffolk's biggest high street stores risk landing themselves in debt with credit deals because of poor staff knowledge, an undercover investigation has found.

Trading standards officers found that despite the recession, many of Britain's major high street national chain stores are throwing large amounts of credit to customers.

But the investigation found that staff in many of the 39 stores which were visited did not understand the terms and conditions of the large credit deals which were on offer.

This has left trading standards officers concerned that customers struggling with finances may take out large credit offers without knowing the full details of what they are getting themselves into.

Eleanor Lake, fair trading officer, said: “I am disappointed. In this climate it is supposed to be that if people are encouraging finance options you want to make sure that the staff know what they are doing and with the size of some of these companies we would expect them to be getting it right.”

Undercover trading standards officers visited a number of Suffolk towns including Ipswich, Bury St Edmunds, Felixstowe, Sudbury and Stowmarket.

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They spoke to sales staff to discuss the credit available and tried to gauge the sales persons understanding of the credit products being offered.

But when officers asked for pre-contract information on credit deals - which would allow them to look at all the terms and conditions before signing up - just one store out of the 39 was able to offer this.

Ms Lake said: “The concern here is that people are not able to look at the terms and conditions. It should be given to people before they sign the contract. People might want to look at the agreement before they commit to anything so they can have a think about it. It gives people the opportunity to realise that if, say, you have signed up to a 'buy now, pay later' agreement, if you do not pay within a year then you will pay two or three times more.”

The investigation also found that in nine of the visits, the salesperson did not understand the product or gave the wrong interest rate of the credit agreement.

The investigation found:

n.A widespread lack of knowledge among staff which could lead to consumers signing up for agreements or an interest rate which they were unaware of.

n. Staff are incentivised to sell store cards which could lead to customers taking out the agreements and getting into further debt.

n.A failure of staff to explain that a 'buy now, pay later' agreement is a credit agreement at a rate of usually around 29.9% which may lead to consumers being faced with large amounts of interest to pay.

n.Just one of the 39 stores visited allowed the undercover officers to view pre-contract information.

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