§ 3.36 p.m.
§ Mr. John Robertson (Paisley)
I beg to move,
That leave be given to bring in a Bill to raise certain price limits applicable to hire-purchase agreements and similar contracts.
The effect of my proposed Bill would be to amend the Hire Purchase Act, 1954, so that the provisions of the Hire Purchase Act, 1932, relating to Scotland, and of the Hire Purchase Act, 1938, relating to England and Wales shall be extended to hire-purchase transactions on goods up to a price limit of £1,000.
Since the introduction of hire-purchase legislation, the limit of the price of goods to which the Acts relate has been increased on several occasions and in 1954 an Act was passed which increased the limit to goods costing not more than £300. The feature of the 1954 Act was that the first time the Acts relating to Scotland and to England were brought within one Measure.
I understand that the purpose of the previous Hire Purchase Acts was to protect the hirer from the activities of certain unscrupulous firms, but only to the extent of the price limit stated in the various Acts. The same arguments as were used in 1932 and 1938, and again in 1954, to increase the limit are equally valid today.
There has been a considerable fall in the value of money between 1954 and 1962 and the goods to which the £300 limit applied in 1954 would cost very much more today. More important still from my point of view, however, is the change that has taken place in social habits. In discussion in Committee in 1954, it was suggested that motor cars should be expressly excluded from coverage by the Act. Today, however, a motor car is considered to be socially necessary because of the long distances which people have to travel in going to work; and because of the change also in social habits people nowadays use cars for going on holiday.
Young married couples setting up house are usually able to obtain the protection which they require by making a number of agreements with a number of firms, or even with an individual firm, covering different articles of 1164 furnishing for their house. In a few cases which have been brought to my attention, however, the whole of the purchase of furnishings has been covered by one agreement, amounting usually to more than £300, so that the protection of the Act does not extend to such a case.
In those circumstances, there is nothing to prevent the snatchback. That was the term that was used to describe a favourite manoeuvre of unscrupulous hire-purchase firms. Perhaps I may best describe the snatch-back by telling the House what happened recently to a constituent of mine. He wanted a car so that he could sometimes take out his invalid wife to make life a little more pleasant for her. He approached a firm of car dealers who put through the whole transaction. It involved a deposit of £55 and an agreement with a finance company. The total cost of the car was £515. The agreement was with the Union Transport Finance Company, at its Glasgow office, and provided for a hire-purchase price of £635 and a monthly rental of 16s. 2d. for thirty-six months, with an option of purchase on payment of £1 at the end of that period.
My constituent made regular payments from September, 1959, to October, 1961. No payment was made in November, 1961, but two payments were made in December. The constituent omitted to make a payment in January; and he says that there were good reasons for this. He made payments in February and March of this year. On 27th March, he received notice from the company that it was terminating the agreement. The letter said that it was left with no alternative. As a matter of fact, an alternative was provided for in the agreement, for it said that if there were arrears, they would be charged at the rate of 10 per cent. per annum. But the hiring was terminated on 30th March.
My constituent paid a further instalment on 2nd April, which the finance company did not refuse. At that date there were no arrears, or, at any rate, only a very small amount of arrears which the finance company made no effort to claim. The car was re-possessed on 30th March. By this time the amount paid to the finance company was £499 2s.
1165 My constituent contacted the finance company through his lawyer and was told that it was no longer interested in his money. That was so, because in a fortnight it had disposed of the car to another hirer. It was seen in Largs being driven by another person. There was not even a refund of the road fund tax or the insurance which my constituent had paid for the whole of 1962. This is the snatch-back. To rub it in, my constituent recently received a letter asking him, as it had disposed of the car, to return the logbook because it was needed
From advice which I have received, it appears that even if all the conditions of the hiring had been observed there was not necessarily any protection for the hirer under Scottish law where the owner was determined to repossess the goods. I believe that every hire-purchase transaction or similar contract should be covered by legislation. What I propose would be the easiest way to provide protection. Only a few unscrupulous firms would do what I have spoken about. The big majority of honest traders would have no objection to such a Bill, and certainly would not do the kind of thing I have spoken about.
It seems clear that there is need to amend existing legislation, and I hope the House will grant leave for me to introduce the Bill for that purpose.
§ Question put and agreed to.
§ Bill ordered to be brought in by Mr. J. Robertson, Mr. Willis, Mr. Lawson, Mr. Steele, Mr. Gourlay, Mr. Small, and Mr. J. Bennett.