New Hire Purchase Bill protects customers from wanton repossession

Dec 02, 2022 News

Kaieteur News – The Hire Purchase Bill of 2020 which seeks to provide a statutory framework to govern contracts between buyers and sellers under credit sale and conditional sales agreements was on Wednesday passed in the National Assembly.

Minister of Tourism, Industry and Commerce, Oneidge Walrond presented the Bill for its second reading to the National Assembly. It was subsequently adopted and passed by the House.

Minister Walrond informed the House that the bill benefitted from widespread consultations which were conducted with stakeholders interested in the hire purchase sector. Twenty-seven of the 30 clauses were amended, ensuring a balanced framework to protect consumers as well as vendors. “Mr. Speaker, I’m particularly pleased to have had the opportunity to work on this piece of legislation which we believe will make a positive consequential contribution to the environment for Trade and Commerce in Guyana and most importantly to the lives of everyday people,” the minister stated.

She noted that the Bill applies not only to hire purchase agreements but also to credit sale and conditional sales agreement when enacted it would provide a statutory framework to govern contracts between buyers and seller under such arrangements.

“It is of some importance Mr. Speaker that I say that the Bill seeks to level the playing field and not to distort it. We were mindful of and determined to avoid replacing a regime that substantially disadvantaged the buyer with one that disadvantaged the seller,” Minister Walrond explained.

Recognising that consumers enter hire purchase agreements without informed consideration of their ability to pay; Clause (10) provides for a seven-day “cooling off” period, whereby the consumer, who had the benefit of more informed consideration may cancel the agreement. In Clause 13 of the Bill, provides for a buyer who cancels an agreement to recover any monies paid under that agreement, subject to a restocking fee charged by a seller to a maximum of 10 percent. Clause 14 makes provision for a buyer who has two or more agreements with any seller, to apportion payments between or amongst the agreements.

“This is especially useful where a buyer may experience some temporary difficulty in meeting payments. Conceivably, he or she could avoid default completely on one agreement while making partial payment on the others,” she said.

In addition, Clause 15 makes certain arrangements in respect of agreements concerning vehicles. This Clause requires the Guyana Revenue Authority to make an annotation on the registration of a Vehicle indicating that the said vehicle is the subject of a hire purchase agreement. This annotation would put a potential buyer on notice that there is an encumbrance on the vehicle.

The culture of repossessing items from consumers by sellers will be discontinued as Clause 29 will prohibit the seller from repossessing goods without first approaching the court and obtaining an order if 70 percent or more of the purchase price has been paid. In the instance whereby less than 70 percent of the purchase price has been paid, the seller is obliged to give 21 days’ notice of intent to repossess the items. This will allow the buyer to cure the breach. The Hire Purchase was supported by, Minister within the Ministry of Housing and Water, Susan Rodrigues, Minister of Agriculture, Zulfikar Mustapha, Minister of Labour, Joseph Hamilton and Member of Parliament Sanjeev Datadin. The Bill received support from the members of the A Partnership for National Unity +Alliance For Change party.

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