Consumers who bought goods on credit often do not know what their rights are when the goods are not delivered and the entity who extended the finance say they must pay up. It is the old story of we did not sell you the furniture, but we already paid the supplier and we want our money.
According to an advisory note from the Consumer Goods and Services Ombud, the National Credit Act (NCA) and law of contract as well as the Consumer Protection Act (CPA) apply in this case. However, the CPA offers the most protection.
While the CPA does not apply to a transaction that constitutes a credit agreement under the NCA, but the goods or services that are the subject of the credit agreement are not excluded. According to Section 19 of the CPA, unless otherwise expressly provided or anticipated, it is an implied condition of every transaction for the supply of goods or services that the supplier is responsible to deliver the goods on the agreed date and time or within a reasonable time after concluding the transaction.
If the supplier tenders the delivery at a location, on a date or at a time other than as agreed with the consumer, the consumer can accept the delivery, require the delivery at the agreed location date and time or cancel the agreement without penalty.
If goods are not delivered, you can cancel
Therefore, the consumer can cancel the agreement in terms of the CPA if goods are not delivered at the agreed place, date and time, without penalty. In addition, Section (40)(d) of the CPA also prohibits the use of unconscionable conduct when a supplier demands payment for goods.
According to the Ombud, it would certainly not be reasonable to force a consumer to pay for goods bought under a credit agreement where the supplier failed to deliver the goods.
There are no specific rights afforded in terms of the NCA to consumers who have bought goods on credit and the supplier failed to deliver the goods, the Ombud says. However, if you stop paying your account due to non-delivery, a credit provider must, before listing any adverse information with a credit bureau, give you notice of the listing.
The credit provider is also not allowed to start any legal action until it has given you notice that you are in default and that he may refer a dispute under a credit agreement to a debt counsellor, ADR agent, consumer court or ombud with jurisdiction, so that the parties can resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date.
Your rights in terms of contract law
If a supplier sold goods on credit but failed to deliver the goods he will be in breach of the contract and you will have these remedies in terms of contract law:
- Performance by the supplier may be enforced – your goods must be delivered.
- You can cancel the contract in certain circumstances.
- You can claim damages for any loss suffered.
- You can claim damages together with specific performance or with cancellation.
In term of the Consumer Protection Act the consumer may cancel the agreement, without any penalty and may treat the goods as unsolicited goods if the goods are not delivered on the agreed location date and time.