Resources - Rauemi

Ever thought that it’s too good to be true?

Does a few dollars a week seem cheap?

Be careful. You may be a victim of tactics designed to saddle you with long term debt.

Home shopping trucks market themselves as providing convenience for the stay at home mum, but what they may actually offer could be far from helpful. Shopping trucks and mobile stores come to you and sell goods at highly inflated prices on credit. If you do not know the true cost, you can cost yourself much more than what the goods are worth. This becomes a problem when people do not see what they are really spending, or do not actually have the money for the purchases.

Even if goods are paid for with regular instalments this creates a debt, just as a loan does. Before you agree to any debt, however, the lender must by law explain:

• the full name and address of the person or company that you are borrowing from;
• what goods you are buying and/or how much money you are borrowing (this will be called ‘the total of all advances made’);
• how much it will cost to borrow, including interest; each fee and charge must be set out and explained clearly;
• how many payments you have to make;
• how much each payment will be;
• how you must make these payments;
• when and how you can cancel the contract;
• what will happen if you fail to pay, including penalty fees and charges and any goods you list as security (for example, your house or your possessions);
• a statement of your right to cancel the credit contract.

If you are in the back of a truck which is kitted out like a store, with your kids saying they want this and that, it can be hard to hear all this information. It can be especially hard to work out the total cost of the item, and what you may have to give up in the future to fully pay the debt.  It can be very tempting, if there is not much disposable income, to go into debt for goods now, rather than save for things in some unimaginable future. But there will be less disposable income in that future if you are paying off debt.

If you have gotten into legal difficulty because of an unpaid debt, would like your credit contract checked and explained, or feel that you may have unfair terms in your contract, come and see the community law centre at 16 Market Street Blenheim. Even if you just need advice or guidance, we can help show you who to speak too to make sure that you do not end up in a situation you cannot afford.