OFT lambasts Rock Group for making 'interest free' claim

The Office of Fair Trading yesterday censured Rock Group, one of Britain's fastest-growing private companies, for offering a misleading 0 per cent finance deal.

The Office of Fair Trading yesterday censured Rock Group, one of Britain's fastest-growing private companies, for offering a misleading 0 per cent finance deal.

Rock Group, based in Warwickshire, trades as rockdirect and claims to be the UK's No 1 notebook computer manufacturer.

It published advertisements claiming "0 per cent Finance Facilities over 9 months.... No Interest!" But the adverts referred to an interest-bearing credit agreement under which interest charges accrued for the whole term of the agreement at an APR of 29.8 per cent if the consumer failed to repay the full balance within nine months.

The OFT decided that the adverts breached the Consumer Credit Act by advertising two APRs, of which the "0 per cent" rate was most prominently displayed. The regulator said the adverts could mislead consumers to believe they were entering into an interest-free agreement where they would be liable for no more than the total price of the item bought. Rock, whose chairman is Mike Davies, has agreed to stop advertising the credit facility.

The OFT said it had received undertakings from Rock under the Enterprise Act that it will no longer use adverts which promote a credit agreement by describing it as interest- free when it is not genuinely interest free.

Penny Boys, the OFT executive director, said: "Credit agreements described as 'interest free' are rarely what they claim. Consumers need to watch out for the small print. Those who do not meet the conditions for full payment within a stated period are required to pay interest on any outstanding balance, often at a high interest rate."

Luke Ireland, Rock's commercial director, said: "We rely on our credit finance company to provide the wording of our advertisements. As soon as we knew about the problem we changed the wording."