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Press releases 2002 -

Companies amend misleading interest free credit ads

PN 20/02     24 April 2002

Three companies have agreed to amend the advertising of their in-store credit as 'interest free' following negotiations with the OFT.

Dixons Group, Harvey Furnishings and Magnum were all advertising 'interest free credit' options or '0% finance' deals. However if a lump sum was not paid off in full at the end of the interest free period, interest was charged for the whole period of the loan.

The OFT takes the view that such adverts break the law and can mislead consumers.

John Vickers, Director General of Fair Trading, said:

'I welcome the decision taken by these companies and urge other companies to follow without delay. When a consumer signs an interest free deal they need to know that they are getting just that.'

Under the Stop Now Regulations, the OFT is required to consult with companies or traders whom it believes are in breach of consumer laws before taking court action. The OFT is approaching a number of other companies about this type of advertising.

Four other companies – Allied Carpets, Furnitureland, Fairway Furniture, and Gregory and Porritts – agreed to change their advertising in November 2001 after the OFT wrote to them.


1. Dixons Group comprises Dixons, Currys, Link Stores, Mastercare and PC World.

2. The OFT took the view that the use of 'interest free credit' options or '0% finance' breached section 7(c) of the Consumer Credit (Advertisements) Regulations 1989. Effectively, Regulation 7(c) bans any advert that states or implies the consumer can get interest free credit where in fact he would be liable for contractual charges.

3. Under the Stop Now Regulations, the OFT can apply for a Court order against traders who breach or are threatening to breach a number of laws harming the collective interests of consumers covered by those laws. It can seek written assurances in lieu of court action.

4. The Stop Now Regulations cover the following areas: doorstep selling, timeshare, unfair contract terms, consumer credit, distance selling, package travel, package holidays and package tours, misleading and comparative advertising, sale of goods rights, TV broadcasting activities and advertising of medicinal products for human use.

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