Baines & Ernst Ltd
- Investigation:
- Baines & Ernst Ltd
- Contract identifier:
- UTCCRContract-1
- Country of complaint:
- United Kingdom
- Country of origin:
- United Kingdom
- Trading sector group:
- City of Manchester
- Trading Sector:
- Financial//Ancillary Credit Business
- Action taken by:
- OFT
- Local Authority:
- City of Manchester
- Legislation used:
- Community Infringements Specified UK Laws//Unfair Contract Terms 1999
- Regulation breached:
- Unfair Contract Term
- Notes:
Notes
| Original term | Application of regulations/Enforcer view | How changed | New term |
|---|---|---|---|
| Term 1 - Contract Period | Reg 7 Plain and intelligible language : Regulation 7: the definition failed to inform consumers of the actual period of the contract and did not make sufficiently clear the effect of changes to payment amounts or other factors. |
The definition of 'period' in term 1 has been amended to include reference to term 2e that sets out the effects of any changes to the payments. | 1 |
| Term 3 | Reg 5 Other unfairness : Confirmed that Baines & Ernst would request that creditors either reduce or freeze interest charges. Consumers could potentially assume that a reduced payment reflected the creditors' agreement to the arrangement, when that might not be the case. |
Amended to include a requirement to keep consumers up to date with dealings with the creditors and to issue statements to consumers detailing the fees, payments and repayment period. | 4 |
| Term 4 | Reg 5 Other unfairness : The term could be misleading in that the warning that Baines & Ernst cannot 'guarantee' to stop creditors continuing to charge interest or taking enforcement action suggested that it was likely they would do so. The wording of the term generally underplayed the likelihood that the consumers' debt would increase. |
The term has been amended to read 'will result' in an increase in the total debt consumers have to repay, and to say that the company cannot stop creditors from continuing to charge interest and any other charges if they wish. | 5 |
| Term 6 (a) Price of the Contract | Reg 7 Plain and intelligible language : Regulation 7: did not make clear that the price included the whole of the first monthly payment plus 17.625% of the subsequent monthly payments. |
The front page of the agreement states the percentage monthly management fee, and that Baines & Ernst will keep the initial fee and not forward it to the creditors. It also states that details of all fees payable will be confirmed in writing. | 3, and on front page of agreement under the heading of "How much do your services cost?" |
- Outcome reached:
- Informal Undertaking Obtained
- Date effective:
- 12 August 2002
- Received from:
- Outcome text:
- Informal undertakings Please see attached document for details of terms revised and/or deleted.
- OFT telephone enquiries:08457 22 44 99
- Consumer Direct telephone enquiries:08454 04 05 06