Scarborough Building Society v Humberside Trading Standards Department
(QBD 14 November 1996, unreported)

Pocklington Magistrates Court had convicted the Society of a breach of Section 46 in publishing an advertisement with a misleading APR of 1.1%. The Society had relied on the National Westminster Bank plc v Devon County Council decision in calculating the APR, and based it on

·       their initial flat rate of 1% for 6 months, followed by

·       6 months' discount of 2% on the Society's normal charge rate (then 8.45%),

·       12 months' discount of 0.5% on the normal charge rate, and then

·       the balance of the agreement at the Society's normal charge rate.

The stipendiary magistrate rejected expert evidence from an Economics professor to the effect that a 1% interest rate was feasible, and convicted on the basis that it was beyond probability.

The Society appealed on the basis that the rate was possible, and that the stipendiary had erred in ignoring the expert evidence.

The judgement supported the stipendiary magistrate, saying that it was his right to decide on the facts as he saw them, and there was no reason not to uphold his view that the 1% rate was totally improbable.