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Ford
Credit plc v Procurator Fiscal, Glasgow The expression "0% finance" is equivalent to
"interest free" and cannot be used in an advertisement, unless the
total amount payable by a credit purchaser in respect of the transaction
advertised is no more than that which would be payable by a cash purchaser, even
though the advertisement as a whole is not misleading. The High Court of Justiciary so held in refusing an
appeal by Ford Credit plc against the Sheriff's decision that its advertisement
offering "0% finance or 10% discount" was in breach of Regulation 7(c)
of the Consumer Credit (Advertisements) Regulations 1989. Lord Justice Clerk Ross said that the gravamen of the
charge was that the appellant had devised an advertisement which included the
expression "0% finance or 10% discount" indicating that a customer was
liable to pay no greater amount in respect of a transaction financed by credit
than he would be liable to pay as a cash purchaser in relation to the like
transaction when in fact the total amount payable by a credit customer exceeded
the cash price. Regulation 7 of the 1989 Regulations provided: "A
credit advertisement shall not include.... (c) the expression 'interest free' or
any expression to the like effect indicating that a customer is liable to pay no
greater amount in respect of a transaction financed by credit than he would be
liable to pay as a cash purchaser in relation to the like transaction, except
where the total amount payable by the debtor does not exceed the cash
price". Counsel for the appellant maintained that, in the present
case, the expression used in the advertisement was not merely "0%
finance" which it was accepted was equivalent to "interest free";
the expression here was "0% finance or 10%discount". He further
contended that the Sheriff had taken too narrow a view in holding that the
expression used was "0% finance", and that what had then been done was
to add an alternative to it, namely, "or 10% discount". He pointed out
that, in the earlier part of his note, the Sheriff had expressed the opinion
that the advertisement made it clear that what was being offered was a choice -
either the customer bought a car at the stated price on interest-free credit, or
he paid cash and received a discount of ten per cent. That being so, there was nothing misleading in the
advertisement, since it could not be said that the advertisement was false in
respect that it indicated that a credit customer would pay no charge for credit
when in fact he would pay ten per cent more than a customer paying by cash. That
was precisely what the advertisement itself explicitly stated and there was
nothing false or misleading in an advertisement of that nature. Counsel
accordingly maintained that, having regard of the expression used in the
advertisement, no relevant breach of Regulation 7(c) had been libelled. The advocate depute, on the other hand, while accepting
that the expression used in the advertisement was not misleading, maintained
that the Crown had relevantly libelled a case of breach of Regulation 7(c). He
submitted that the effect of the regulation was that the expression
"interest free" (or its equivalent, 0% finance) could not be used in
an advertisement unless the amount payable under credit arrangements did not
exceed the cash price. He pointed out under reference to Regulation 1 that
"cash price" in relation to any goods meant the price at which the
goods might be purchased by persons for cash, account being taken of any
discount generally available. The court reached the conclusion that the argument of the
advocate depute was to be preferred. The advertisement did include the words
"0% finance" which were equivalent to "interest free". The
fact that an alternative was added, namely "or 10% discount" did not
alter the fact that the offending expression equivalent to "interest
free" had been used. The Sheriff had thus been well-founded in concluding
that the advertisement was in breach of Regulation 7(c) since the credit
customer had to pay more than he would as a cash customer. |