Consumer victory in laptop battle

Stubborness won the day in a 16-year David and Goliath legal battle over credit for a laptop that will hearten any disgruntled consumer.

In Durkin v DSG Retail [2014] UKSC 21, the Supreme Court held that a lender who wants to blacklist a consumer’s credit rating owes that consumer a duty of care. The court awarded him £8,000 damages—a bittersweet victory for Richard Durkin, who was originally awarded £116,000 damages by Aberdeen Sheriff Court. Lord Hodge said the justices did not have the power to reinstate that award.

Durkin bought a laptop from the Aberdeen branch of PC World on the understanding that if it transpired that it did not have an inbuilt modem then he could return it. As it did not have this modem, he returned the laptop the next day and sought repayment of his £50 deposit and cancellation of the credit agreement. The store refused to refund and cancel.

Subsequently, he “defaulted” on the loan and incurred a bad credit rating.

The justices considered whether a valid loan agreement had ever existed, and if it did, whether the right to rescind was a “like” claim under s 75(1) of the Consumer Credit Act 1974.

Delivering judgment, Lord Hodge said: “HFC, knowing of Mr Durkin's assertion that the credit agreement had been rescinded, was under a duty to investigate that assertion in order reasonably to satisfy itself that the credit agreement remained enforceable before reporting to the credit reference agencies that he was in default. HFC could readily foresee that registration of a default could damage Mr Durkin's credit… it should not have intimated the default without a reasonable basis for the belief that it had occurred. In so doing it acted in breach of its duty of care to Mr Durkin.”

Durkin said: “Sometimes you have to do what is right, and not what is easy.”