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Press releases 2002 -

More retailers stop misleading interest free credit ads

PN 57/02     12 September 2002

Five more retailers have agreed to stop advertising interest-bearing credit deals as 'interest free' following intervention from the OFT.

Courts, Comet, Powerhouse, Time Computers and were all advertising 'interest free' credit or '0 % APR' or 'interest free option/choice' deals for their products. In fact, interest was payable from the date of the agreement if a lump sum was not paid off in full by the end of the interest free period.

The OFT takes the view that such adverts break the law and could mislead the public.

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 they are getting just that.'

The OFT has already secured similar agreements from seven other major retailers in the past year and will continue to press companies to comply with the law.


1. The OFT took the view that the use of 'interest free credit' options or '0 per cent finance' breached Regulation 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 consumer charges.

2. Under the Stop Now Regulations the OFT is required to consult with companies or traders it believes to be in breach or threatening to breach a number of laws harming the collective interests of consumers covered by those laws before taking court action. It can seek written assurances in lieu of court action.

3. 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.

4. The OFT secured similar agreements from Dixons Group, Harvey Furnishings and Magnum in April 2002 (see PN 20/02 ) and from Allied Carpets, Furnitureland, Fairway Furniture and Gregory and Porritts in November 2001.

5. In this press release the functions of the Director General of Fair Trading (DGFT) under the Regulations are for simplicity described as the functions of 'the OFT'. The Enterprise Bill proposes to replace the office of the DGFT with the OFT, to which would be transferred the DGFT's functions.

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